Should I run Business Central in the cloud or on-premises?
By Emil Björk · Microsoft business apps consultant, Gothenburg
Cloud (SaaS) unless you have a specific, defensible reason not to — Microsoft only ships new features to SaaS first, upgrades are automatic, and licensing is per-user monthly. On-premises still exists and is the right answer for hard data-residency, air-gapped environments, or deeply customised NAV estates that cannot economically be lifted onto extensions.
The direction of travel is unambiguous. Copilot, embedded Power BI, Shopify connectors, Bank Reconciliation with AI, and every Wave-cadence feature land on SaaS first and often never appear on-prem. Running on-prem means opting into a slower release train and a heavier upgrade burden the team owns.
The genuine on-prem cases are narrow: regulated industries that cannot store financials outside a specific jurisdiction Microsoft doesn't yet cover, factories with no reliable connectivity, and NAV estates whose customisation cost to modernise for extensions exceeds the cloud saving. Everyone else should default to SaaS and treat on-prem as an exception that needs justification.
Go deeper
- What is Business Central?A practical introduction to Microsoft Dynamics 365 Business Central — the SaaS ERP for small and mid-sized businesses.
- Business Central licensing and pricingHow Business Central is licensed — Essentials vs Premium, Team Members, External Accountants, and what really drives total cost.
- Business Central vs Dynamics NAVWhat changed in the move from Dynamics NAV to Business Central, and what that means for organisations still running NAV.