There are other versions that allow you different options. You can host Microsoft Dynamics on your own servers on-site or even use a private data cloud with a hosted version in that cloud.

A common option for small businesses nowadays is to host Dynamics on Microsoft’s online cloud using their Dynamics 365 online service. Being cloud-based means that the program and data are accessible anywhere, anytime, on any device. You don’t have to worry about arduous logins through VPNs or other internal access systems.

Because Microsoft Dynamics is cloud-based, you can access it whenever you need to. It also means that it easily integrates with programs like Excel and Word. As long as you use the cloud-based version, the data will always be available to you. You can enjoy the benefits of a cloud-based system by investing in a Microsoft Dynamics product.

Cloud vs on‑prem vs private cloud: what’s right for you?

Cloud (Dynamics 365 online): Fastest to roll out, automatic updates, anywhere access. Trade‑off: less control over update timing and needs reliable internet.
On‑premises: Full control and data stays on your servers. Trade‑off: higher costs to run and maintain, slower to get new features.
Private cloud/hosted: Middle ground a partner hosts it for you, with more control over change windows. Trade‑off: you still carry some patching/testing responsibility and rely on the host.
Read more: Environments overview and Dynamics 365 on‑premises

Security, compliance and data residency (GDPR)

Data is encrypted at rest and in transit, with role‑based security and audit history to track changes.
Certifications include ISO and SOC; you can choose a geography (UK, EU, etc.) to meet data residency needs.
Start here: Power Platform security and compliance and Regions and data residency. Trust Center: https://www.microsoft.com/trust-center

Uptime and reliability

99.9% financially backed SLA, high availability architecture and multiple layers of redundancy.
Check status and incidents in the Service health dashboard; use Message centre for change notices.
Details: Online Services SLA and service health .