So what exactly is Microsoft Dynamics CRM 2016? Microsoft Dynamics CRM 2016 is an on-premise release of the product. This means it runs on your hardware and on your infrastructure and not in the Microsoft Cloud.
A secret about Microsoft Dynamics CRM 2016. It is really Dynamics CRM 365.
In fact in the latest releases of the on-premise offering, it has been rebranded to Microsoft Dynamics 365. I think this happened exactly around the 8.2.5.x release. So much of the functionality is rolled down to you on-premise just as in the cloud.
Running Microsoft Dynamics CRM 2016 or Dynamics CRM 365 on-premise may make your stakeholders less concerned about data privacy
If you are in an industry that has sensitive data like biochemical engineering, or you are housing information related to pharmaceutical clinical trials you can understand why upper management may get a little concerned about the idea of the data essentially leaving the building.
You may not have the Infrastructure for Microsoft Dynamics CRM On-Premise
It is very possible that your organization already has IT Infrastructure, fully redundant data centers and solid disaster recovery plans in place for your data and equipment.
That is honestly the absolute best-case scenario for an on-premise deployment but the reality many times that isn’t the case. So running your CRM deployment on-site may not make the most sense especially if you don’t have an IT Operations team thats focus is to make sure that the hardware is always up, running, and monitored.
Running On-Premise with Microsoft Dynamics CRM 2016 may be more cost-effective for your company
Depending on your organization’s size you may even have a lower overall total cost of ownership (by paying annual maintenance) vs. paying the current monthly per user per month fees with the on cloud version of the product which is right at about $200 per user per month for the customer engagement license tier.
This means that although your price per user license is around $1000 per user with an on-premise deployment you will own that license and then only have to pay your annual maintenance fees to Microsoft in order to maintain access to the newer releases each year.
Running Microsoft Dynamics CRM 2016 may make integrations more seamless with legacy systems
Although there are many ways through the CRM API to interact with the product there are many cases when bulk loading and large amounts of data just work better when the database is actually onsite.