The Practical Guide to Moving from On-Prem Dynamics to Dynamics 365 Online

I want you to picture your current On-Premise Dynamics setup like an old, beloved family house. It’s got character, you know exactly which floorboards creak, and you have the keys to every single room (including the basement where the boiler, your SQL server, lives).

But let’s be real. The roof is leaking (security patches are lagging), the plumbing is ancient (no modern integrations), and the electric bill is astronomical (server maintenance costs).

Moving to Dynamics 365 Online is like moving into a smart penthouse. The view is better, the maintenance is handled by someone else, and the lights turn on with voice commands. But moving day? That’s the stressful part. That’s where things get broken, lost, or stuck in the hallway.

I’m going to walk you through exactly how to move without losing your mind, or your data.

Why Move? (Is the move actually worth the cost?)

You aren't doing this just to be trendy. You’re doing it for the bottom line.

When we analyze the Dynamics CRM to Dynamics 365 migration ROI, the numbers don't lie. A Forrester study commissioned by Microsoft found that organizations can see an ROI of anywhere between 215% to 265% over three years.

Why? Because you stop paying people to "keep the lights on" and start paying them to improve the business.

• Productivity Gains: ~20% increase in operational efficiency because your sales team isn't waiting for a VPN to connect.
• Payback Period: Often less than 6 months.
• The "Opportunity Cost" Secret: The biggest cost isn't the server; it's the fact that your competitors are using AI-driven sales insights (Copilot) and you are still manually running SQL reports.

But I know what you're asking: "What is the actual cost of upgrading Dynamics CRM on-premise to online?"

Yes, the monthly subscription cost of Online looks higher on paper than your existing license maintenance. But once you factor in the hardware refresh you’re avoiding, the expensive Tier 2 support, the security patching labor, and the downtime you currently suffer, the "Total Cost of Ownership" usually flips in favor of the cloud within 18 months.

Here is a hidden cost secret: On-prem storage is cheap. Cloud storage is premium. If you migrate 500GB of "junk" data, your monthly bill will explode. The secret to ROI is cleaning before you move.

Technical challenges to be aware of

This is the part most blogs gloss over. I won't. If you just "lift and shift," your system will crash. Here is why.

1. The Javascript Trap

You might be wondering, "Can I migrate custom JavaScript from Dynamics CRM 2011 to Dynamics 365 Online?"

Short answer: Probably not directly.

If you have code written back in 2011 or 2013, it’s likely using the old Xrm.Page object (now deprecated) or, worse, direct DOM manipulation (like document.getElementById). The new Unified Interface in Dynamics 365 Online doesn't play nice with that. It’s faster and responsive, but it’s strict.

• The "Async" Secret: Old code was often "synchronous" (it froze the screen while it thought). The new Unified Interface demands "asynchronous" code. If you don't rewrite this, your users will experience what looks like a browser crash.
• The Fix: You have to rewrite those scripts using the formContext model. It’s not just a copy-paste job; it’s a refactor.

2. The SQL View Problem

In the on-prem world, we loved writing direct SQL queries against the database views. It was fast and easy. But now you need to know: How do I handle SQL views when moving from on-prem to Dataverse?

You don't. Dataverse (the backend of D365 Online) blocks direct SQL access for security. This is often the biggest shock for IT teams.

• The Insight: Many companies built entire reporting empires on top of these views.
• The Fix: You have to migrate these logic layers to Virtual Tables, Power BI, or export the data to Azure Synapse Link if you need heavy analytics. If you relied on SQL views for complex filtering in the UI, you might need to rewrite that logic using Power Automate or standard FetchXML.

3. Plugin Paralysis

What happens to my On-Premise plugins when I move to Dynamics 365 Online?

On-prem, your plugins often ran in "Full Trust." They could read local files, check the registry, or call a local IP address.

In the cloud, plugins run in "Sandbox Mode" (Partial Trust).

• The "2-Minute" Secret: In the cloud, if your plugin takes longer than 2 minutes to run, Microsoft kills it. Hard stop. On-prem, you could get away with sloppy, slow code. Online, efficiency is mandatory.
• The Reality: If your plugin tries to write a file to the C: drive or hit a local SQL server, it will fail. You need to re-architect these integrations to use Azure Service Bus or Webhooks.

4. The Deprecation List

You need to know what’s gone before you start packing. Here is a list of the deprecated features in Dynamics 365 Online compared to On-Premise:

• Web Client: The classic interface is dead. It’s all Unified Interface now.
• Legacy Process Dialogs: Replaced by Canvas Apps or Business Process Flows.
• 2011 SOAP Endpoint: Gone. You must use the Web API (OData).
• Task Flows: Deprecated.
• Voice of the Customer: Replaced by Dynamics 365 Customer Voice.
• Mail Merge: Yes, the old Word Mail Merge is gone. You now use Server-Side Document Generation or Power Automate.

5. Customization vs. Modernization

This brings up a budget question: Is it cheaper to rewrite customizations or migrate them to Power Automate?

Almost always, it is cheaper (and smarter) to migrate to Power Automate. Old workflows are rigid. Power Automate connects to everything. Don't pay a developer 50 hours to fix a C# plugin that sends an email when a 30-minute Power Automate flow can do the same thing.

Handling Data, Documents, and Users

Handling Large Attachments and Notes

Migrate notes and attachments to Dynamics 365 is usually the bottleneck that kills your timeline.

If you have 10 years of history, you likely have terabytes of email attachments (activitymimeattachment) and notes (annotation).

• The Challenge: Pushing this through the standard API is slow and expensive (storage costs in Dataverse are high).
• The Solution: We often recommend SharePoint integration migration to Dynamics 365. We move the bulky files to SharePoint (cheap storage) and just leave a link in Dynamics. This saves you thousands of dollars in storage fees annually.
• Handling large attachments Dynamics 365 migration requires chunking strategies. If you try to push a 50MB PDF in one API call, it will time out. Our scripts break these files down and reassemble them in the cloud automatically.
• The Secret "Mime Type" Trap: Sometimes, old attachments lose their file extension in the database. When you migrate them, they become unrecognizable "blobs." We have a proprietary script that analyzes the file header to restore the correct extension (PDF, JPG, DOCX) so your data remains usable.

The Identity Crisis: Users

Dynamics 365 user mapping active directory is tricky.

On-prem uses Windows Authentication (Active Directory). Online uses Entra ID (Azure AD).

If John Doe in your local AD doesn't match John Doe in your Azure AD exactly (maybe his email is locally but in 365), the migration fails.

The "Stub User" Technique: What do you do with records owned by employees who left 5 years ago? You don't want to pay for a license for them in the Cloud. The secret is creating a "Stub User" or a "System Team" in the new system and mapping all historical data to that entity. This keeps your active user list clean and your license costs low.

What are the risks?

If your boss asks you to write a risk assessment for moving legacy CRM data to the cloud, you can copy-paste this table into your project plan. We cover everything from data loss to Dynamics 365 on-premise to online security risks: