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Should you Upgrade to Business Central Cloud or On-premise from NAV?

Updated: Oct 25, 2022

The recent release of Microsoft Dynamics 365 Business Central has a lot of existing Dynamics NAV users questioning whether or not to upgrade and if so, should they choose Business Central Cloud or On-premise? Each offers tenant specific qualities that may or may not be beneficial to upgrade to we’ve put together a little list that showcases the main differences between the two.


Woman questioning cloud or on-premise Business Central software

Dynamics 365 Business Central Cloud


Business Central Cloud is a solution that is delivered as a “software as a service” (SaaS) running on Microsoft’s Cloud (Azure).


  • User licenses are “named” and are licensed per month using a subscription pricing model.

  • No hardware or servers are required and Microsoft is responsible for setting up and maintaining the infrastructure used to run the software.

  • Software updates are automatically applied on a periodic basis.

  • All software add-on solutions and customizations must be provided via “Extensions” which are developed using Microsoft Visual Studio Code. The Business Central source code cannot be modified, but rather “extended” by adding functionality around the existing solution.

  • Apps are able to be downloaded directly from Microsoft AppSource into your Business Central environment.

  • Multiple backups to multiple data centers are done for you by Microsoft.

  • 99.9% uptime guarantee.

  • Business Central cloud supports seamless integrations with other Microsoft software such as Power BI, Teams, Excel, Word, Dynamics 365 Sales, and the Power Platform.


Does it cost more to upgrade to Business Central Cloud or Business Central On-premise? Historically it costs less to upgrade to Business Central Cloud because of the significantly less upfront hardware costs typically associated with on-premise software installations.

Dynamics 365 Business Central On-Premise


Business Central On-Premise is a solution that is delivered as a traditional “on-premise” solution, similar to how previous versions of Dynamics NAV (formerly Navision) have been delivered.


  • User licenses are “concurrent” and are typically purchased up-front as a perpetual use license with an annual “Enhancement Plan” fee to provide access to new releases of the software.

  • The server must be installed on an environment specific to each client. This may be an on-premise server physically at the client site, or hosted on a private cloud server (such as Microsoft Azure).

  • Software updates are available but are not automatically applied. A Microsoft Partner typically assists with applying updates or upgrading to new releases.

  • Software add-on solutions and customizations may be provided via “Extensions” but the traditional method of deploying these solutions using “Objects” may continue to be used. Modifications via “Object” changes allows changes to the standard solution, providing more flexibility in how customizations can be developed.

  • You are responsible for backing up your data and having a disaster recovery plan in place.

  • A Data Gateway is required for certain Microsoft software integrations such as Power Platform, while other software such as Microsoft Teams is unable to integrate with BC on premise.


If after reading this you are still on the fence about which version is correct for you here’s a few more resources that may help:


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