Is Microsoft Dynamics GP Cloud Based?

August 13, 2024

Marko Beric

We are sometimes asked, "Is Microsoft Dynamics GP cloud-based?"

Although Dynamics GP can be hosted and accessed in the cloud through a browser, it is not considered a true cloud-based application.

This is an important distinction for GP users because it limits what GP can do compared to cloud-based ERP.

In this blog, we discuss the differences between cloud-based vs. on-premises products and why a modern cloud-based ERP makes good business sense for growing companies.

What's the difference between on-premises and cloud hosting?

The difference between an on-premises and a cloud-based application is how the application was designed (or architected).

A cloud-based product is designed to serve its applications, data, and services over the Internet. The product can be accessed via a standard web browser.

An on-premises-based (or "on-prem") product serves its applications, data, and services from physical devices within the company's internal network to other devices on the network.

Dynamics GP was designed to operate on premises. GP's hardware configuration can be located anywhere, such as at a hosting provider's location. To make Dynamics GP in the cloud possible, the hosting provider can provide web server capabilities along with Microsoft support modules for GP so users can access GP pages through a web browser.

Pros and cons of hosting your ERP on-premises

There are some advantages to hosting your ERP on premises, such as:

You have complete control over your environment. Hosting your software on premises allows you the freedom to control your system hardware and software, network, and operating systems as you like. You don't have to worry about internet connections or throughput limitations.

You have already invested in the infrastructure to host other applications on premises. There are costs associated with hosting your business-critical applications, like an ERP, on premises. But if you already have the infrastructure in place – hardware, network capacity, administrators – then those costs will remain whether your ERP is in the cloud or on premises.

Your expected traffic will be cost prohibitive online. Many cloud providers charge a fee based on excessive network traffic, and some ERPs have operational limits when implemented in the cloud. Running your ERP on premises avoids those issues.

However, there are significant disadvantages to an on-premises implementation:

High capital expenditure. On-premises installations require a large initial outlay for equipment, office space, and HVAC before you start loading software. These costs can be substantial.

Ongoing maintenance. In addition to the initial investment, there are ongoing maintenance costs in terms of both dollars and personnel to keep equipment, operating systems, and software up to date.

Network security risk. Keeping your company safe from hackers is a full-time job. With an on-premises installation, you shoulder the risk of bad actors gaining access to your network and business systems. Unfortunately, ransomware attacks are becoming more common and they target smaller companies that have more fragile security in place.

Pros of hosting your ERP in the cloud

Similarly, cloud-hosted ERPs offer advantages and disadvantages. Among the advantages:

Anytime, anywhere access. Cloud-enabled ERPs allow users to access their systems anytime, from any device, using a standard web browser.

Enterprise-grade network security. Most network hosting companies provide extensive intrusion detection and network safeguards to prevent unauthorized access. In addition, they provide services such as backup protection and high availability of their servers in multiple geographic areas for 24/7 operation.

Lower up-front costs. Cloud ERPs charge a monthly subscription fee without a large initial capital expense. The hosting company is responsible for all hardware, software, and operating system updates and ongoing maintenance, freeing your IT staff from these activities.

AI capabilities. Leveraging cloud infrastructure enhances AI integration, allowing for advanced data analytics, predictive insights, and automation. This means smarter decision-making and streamlined operations, as AI tools can process vast amounts of data efficiently.

Always receive the latest features and functionality. With cloud-hosted ERPs, you always have access to the latest features and functionality. Updates are automatically rolled out by the hosting provider, ensuring your system is always up to date with the newest capabilities and improvements without the need for manual, time consuming upgrades.

Managed Support Services. With cloud-hosted ERP, Western Computer offers comprehensive Managed Support Services for proactive monitoring, regular updates, and expert troubleshooting. This ensures your system runs smoothly, minimizing downtown, and enhancing performance without burdening your internal team.

Among the disadvantages:

Requires internet access. If your internet access is disconnected, you lose access to your data.

Can be expensive. Depending on your situation, a cloud implementation is not always cheaper than an on-premises one over time. Companies weighing both options should perform due diligence to understand the costs of both implementation scenarios.

Why ERP software is better in the cloud

In most cases, running your ERP solution in the cloud is more advantageous than running it on premises.

Because most current business applications are cloud-enabled, cloud ERPs can connect natively with other major software vendors, giving you access to more features and functions than you have available on premises.

In addition, cloud ERP hosting providers, like Microsoft Azure, provide security measures that most companies cannot afford. Your data is probably safer in the cloud than it is on premises.

Microsoft Dynamics GP alternatives

For Microsoft Dynamics GP users, the limitations imposed by its architecture limit its ability to grow with the technologies that are required in today's business environment. Even though Microsoft has promised bug fixes and regulatory updates, it will not be investing in new features and functions for the product.

Microsoft’s Dynamics 365 product line offers cloud alternatives to Dynamics GP:

Microsoft's Dynamics 365 Business Central is a comprehensive ERP for midsized companies. Business Central offers strong financials, manufacturing, distribution, and retail capabilities.

Microsoft Dynamics 365 Finance and SCM offers deeper finance and operational functionality than Business Central for larger, more complex businesses.

All Dynamics 365 products integrate with Microsoft's Office 365 applications, which includes Excel, Outlook, Teams, and Word, and Microsoft's Power Platform, which includes Power BI and Copilot for AI-enabled business analysis.