As digital transformation reshapes industries and customer expectations, businesses are re-evaluating the limitations of traditional on-premise systems. Many organizations that have long relied on local infrastructure are making the strategic decision to upgrade from on-premise to online (cloud-based) platforms. Whether it’s for customer relationship management (CRM), enterprise resource planning (ERP), data storage, or collaboration tools, moving to the cloud is no longer just a technology upgrade—it’s a critical business enabler.
This article provides a comprehensive guide to transitioning from on-premise systems to online solutions, focusing on key motivations, challenges, migration strategies, and best practices.
What Does “Upgrading from On-Premise to Online” Mean?
“On-premise” refers to software or systems hosted locally on a company’s physical servers. In contrast, “online” or cloud-based solutions are hosted off-site—typically by a third-party provider—accessed via the internet, and maintained through subscription models (SaaS, IaaS, or PaaS).
Upgrading from on-premise to online involves:
- Migrating data, applications, and services to a cloud infrastructure
- Reconfiguring user access, security, and integrations
- Adopting cloud-native tools and services to enhance agility and scalability
Popular platforms like Microsoft Dynamics 365, Office 365, Salesforce, Azure, AWS, and Google Cloud offer comprehensive cloud alternatives to legacy on-premise software.
Why Organizations Are Moving to the Cloud
1. Scalability
Cloud solutions scale effortlessly as your organization grows—no need to buy new servers or configure complex infrastructure.
2. Lower Maintenance Costs
Cloud providers manage system updates, patches, and backups, reducing the burden on internal IT teams.
3. Remote Accessibility
Teams can access systems from anywhere, supporting hybrid and remote workforces.
4. Enhanced Security
Modern cloud platforms offer built-in compliance, threat detection, encryption, and 24/7 monitoring.
5. Faster Innovation
Cloud platforms are constantly evolving with AI, analytics, automation, and new integrations—keeping you competitive.
6. Disaster Recovery and Business Continuity
Data stored in the cloud can be restored quickly in case of hardware failure or cyberattacks.
Common Systems Migrated from On-Premise to Online
- CRM systems (e.g., Dynamics 365 CRM, Salesforce)
- ERP platforms (e.g., Dynamics GP/NAV to Dynamics 365 Business Central)
- Email servers (e.g., Exchange Server to Microsoft 365)
- File storage (e.g., local file shares to SharePoint Online or OneDrive)
- Databases (e.g., SQL Server to Azure SQL Database)
- Collaboration tools (e.g., legacy intranets to Microsoft Teams or Slack)
Key Considerations Before Migration
1. Assess Your Current Environment
- What applications are currently hosted on-premise?
- How critical are these systems to day-to-day operations?
- What customizations and integrations exist?
2. Define Business Objectives
Understand what you want to achieve:
- Cost reduction?
- Greater agility?
- Better user experience?
This shapes the scope and goals of the migration project.
3. Select the Right Cloud Model
There are several models to choose from:
- SaaS (Software as a Service) – Best for CRM, collaboration, and productivity tools
- PaaS (Platform as a Service) – Useful for app development and hosting
- IaaS (Infrastructure as a Service) – Offers flexibility to move VMs and servers as-is to the cloud
4. Budget and Timeline
Evaluate licensing costs, migration tool expenses, training needs, and potential downtime. Set a realistic timeline with phases.
Migration Approaches
There are three main strategies when upgrading to the cloud:
1. Rehosting (Lift-and-Shift)
Move applications as-is from on-premise to cloud infrastructure.
Pros: Fast, minimal code changes
Cons: Doesn’t leverage full cloud capabilities
2. Replatforming
Move applications to the cloud with slight modifications to optimize performance.
Pros: Balance of speed and performance
Cons: Some refactoring required
3. Refactoring (Rearchitecting)
Rebuild applications to fully utilize cloud-native services like AI, APIs, and containers.
Pros: Long-term efficiency, modern architecture
Cons: Time-consuming and resource-intensive
Step-by-Step Guide to Cloud Migration
Step 1: Planning and Assessment
- Inventory your current systems
- Prioritize applications for migration
- Identify dependencies and customizations
Step 2: Choose the Cloud Provider
Consider:
- Integration with existing tools (e.g., Microsoft 365 + Azure)
- Compliance requirements
- Support and pricing models
Step 3: Prepare Data and Applications
- Cleanse and deduplicate data
- Standardize formats
- Document all integrations and workflows
Step 4: Configure Cloud Environment
Set up:
- Resource groups, security roles, and permissions
- Networking, storage, and backup policies
- User authentication (e.g., Azure AD, SSO)
Step 5: Test and Validate
- Perform test migrations
- Validate data integrity and app performance
- Run user acceptance testing (UAT)
Step 6: Go Live
- Migrate users and cut over to the new system
- Monitor performance
- Provide user support and helpdesk
Step 7: Post-Migration Optimization
- Monitor usage and performance
- Gather feedback
- Enable automation, AI, or advanced analytics
Challenges in Moving from On-Premise to Online
1. Downtime and Business Disruption
Poor planning can result in extended outages or data loss.
Solution: Schedule migrations during off-hours and have a rollback plan.
2. Data Loss or Corruption
During migration, some data may not translate properly.
Solution: Use robust migration tools and perform data validation.
3. Compatibility Issues
Legacy applications may not run well in the cloud.
Solution: Consider virtualization or modern alternatives.
4. Security and Compliance
Transferring data to the cloud can raise compliance concerns.
Solution: Choose providers with certifications (e.g., ISO, GDPR) and set up proper access controls.
5. User Resistance
Employees may be hesitant to adopt new systems.
Solution: Offer training, highlight benefits, and provide strong support during and after the transition.
Tools and Platforms for Cloud Migration
For Microsoft Ecosystems:
- Azure Migrate – for moving servers, databases, and applications
- Dynamics 365 Migration Program – for moving from on-prem CRM/ERP to Dynamics 365
- SharePoint Migration Tool – for file and document migration
- Power Platform – to rebuild forms and workflows in cloud-native tools
Third-Party Tools:
- BitTitan MigrationWiz
- Quest On Demand Migration
- AvePoint Cloud Migration
- Scribe or KingswaySoft (for CRM/ERP data migration)
Benefits After Migrating to the Cloud
1. Increased Efficiency
No need to manage servers, updates, or manual backups.
2. Real-Time Collaboration
Teams can collaborate across time zones with tools like Teams, OneDrive, and SharePoint.
3. Predictable Costs
Subscription pricing allows better budgeting and cost management.
4. Rapid Innovation
Take advantage of AI, automation, chatbots, and analytics to drive smarter business decisions.
5. Improved Disaster Recovery
Built-in redundancy and automated backups reduce downtime risk.
Best Practices for a Successful Upgrade
- Start Small: Begin with low-risk applications to build confidence.
- Involve All Stakeholders: Ensure IT, compliance, and end-users are aligned.
- Monitor and Optimize Continuously: The cloud is dynamic—track KPIs and optimize usage.
- Enable Self-Service Tools: Empower users with cloud-based portals and automation.
- Stay Informed: Cloud providers update platforms frequently—stay on top of release notes.
Real-World Example
Case: A Manufacturing Firm Upgrading CRM to Dynamics 365 Online
The company had an on-premise CRM system that was no longer supported. They:
- Assessed data and eliminated 25% of obsolete records
- Migrated using Microsoft’s Data Export and Azure SQL
- Rebuilt custom reports in Power BI
- Integrated Dynamics 365 with Teams and Outlook
- Trained 50 sales reps using role-based training modules
Results:
- Reduced CRM maintenance costs by 40%
- Improved sales productivity by 25%
- Enabled mobile access for field reps