Business Central on premise subscription vs Business Central Cloud

I think the confusion is around what “Dual Use Rights” actually means.

Business Central cloud subscription licenses provide Dual Use Rights that allow the licensed users to deploy and access the equivalent Business Central on-premises software. In other words, the cloud license gives you the right to use the on-premises version as well; it does not mean that an on-premises subscription can simply be used as a cheaper license for Business Central Online.

Microsoft's current Product Terms show the mapping in this direction: a Business Central Essentials/Premium cloud subscription provides access to the corresponding on-premises version.

There are also important differences between Business Central Online and on-premises. For example, Business Central Online is managed by Microsoft, while with on-premises the customer is responsible for the infrastructure and supporting components. Microsoft also notes that additional environment and database-capacity costs can apply to Business Central Online, whereas these don't apply in the same way to the on-premises model.

Most importantly, Dual Use Rights are non-perpetual and expire when the qualifying subscription expires. They are intended to provide flexibility—for example, during migration, hybrid scenarios, or development/testing—not to provide a cheaper alternative licensing route to Business Central Online.

So I would understand it as:

BC Online subscription → can also use equivalent BC On-Premises rights (Dual Use Rights)

rather than:

BC On-Premises subscription → can use BC Online for less

If you are seeing an on-premises SKU that appears cheaper than the corresponding Business Central Online SKU, I would also check the exact licensing program and SKU. The pricing/licensing models are not necessarily directly comparable.

Business Central Dual Use Rights generally allow a properly licensed Dynamics 365 Business Central cloud subscription user to access the equivalent Business Central on-premises deployment without requiring an additional on-premises CAL for that user.

It should not be interpreted in the opposite direction — purchasing a Business Central on-premises subscription does not automatically provide entitlement to use the Business Central SaaS service.

There are also practical differences beyond licensing. With Business Central Online, Microsoft manages the SaaS infrastructure, platform updates, environment administration and service availability. With an on-premises deployment, the customer/partner remains responsible for the underlying infrastructure and associated components.

So I would first confirm which specific licensing SKU/program is being compared, because “dual use rights” does not simply mean that an on-premises subscription can be purchased at a lower cost and then used as a Business Central cloud subscription.

Hi MLollen 

Thank you for posting to the community! 

I'm sure that you have the information on migrating to the cloud as well as other resources on BC OnPrem so I won't flood this post with a lot of links. 

Other Partners may reply to your post and offer their opinion, but I found two articles that you might find interesting, each provide a brief comparison and benefit of moving to BC cloud:

• Business Central Cloud or On-Prem, which is better for your business? - MCS (mentorconsultingservices.com)
• Cloud vs. On-Premises: D365 Business Central Comparison (intwo.cloud)

If this reply answers your question, please Accept as the solution to help the other members find it more quickly. Otherwise, please let me know if you need further assistance on this topic.

Regards,

Microsoft CSP Licensing Concierge