Microsoft

MB-500 · Question #361

Drag and Drop Question A company plans to deploy Dynamics 365 Finance. You need to recommend deployment options for the company. What should you recommend? To answer, drag the appropriate deployment…

The correct answer is cloud or on-premises; cloud only; cloud or on-premises; cloud only. Dynamics 365 Finance Deployment Options - Exam Question Explained > Note: The question as shared is missing the actual application requirements (the left-side items you drag to). The answer pattern is visible, but the requirement labels are not. The explanation below is based…

Plan the architecture and solution design

Question

Drag and Drop Question A company plans to deploy Dynamics 365 Finance. You need to recommend deployment options for the company. What should you recommend? To answer, drag the appropriate deployment options to the correct application requirement. Each deployment option may be used once, more than once, or not at all. You may need to drag the split bar between panes or scroll to view content. NOTE: Each correct selection is worth one point. Answer:

Exhibit

Answer Area

Drag items

cloud onlyon-premises onlycloud or on-premises

Correct arrangement

cloud or on-premises
cloud only
cloud or on-premises
cloud only

Explanation

Dynamics 365 Finance Deployment Options - Exam Question Explained

Note: The question as shared is missing the actual application requirements (the left-side items you drag to). The answer pattern is visible, but the requirement labels are not. The explanation below is based on the known correct answers and the standard exam version of this question.

Key Concept: D365 Finance Deployment Modes

Option	Meaning
Cloud only	Hosted on Microsoft Azure; managed by Microsoft
On-premises only	Hosted in the customer's own datacenter
Cloud or on-premises	Core feature available in both environments

Why the Answers Follow This Pattern (1=C/OP, 2=Cloud, 3=C/OP, 4=Cloud)

Position 1 - `cloud or on-premises`

Standard core D365 Finance features (e.g., General Ledger, Accounts Payable/Receivable, Fixed Assets, Budgeting) are available in both deployment models. Microsoft maintains feature parity for these on-premises via the Local Business Data (LBD) deployment.

Position 2 - `cloud only`

Microservice-based add-ins such as the Electronic Invoicing service or Tax Calculation service run as Azure-hosted microservices. They depend on Azure infrastructure (Service Bus, Key Vault, etc.) and cannot be installed on-premises.

Position 3 - `cloud or on-premises`

Again a core financial workflow feature - same reasoning as Position 1. These are part of the base application that ships in both deployment packages.

Position 4 - `cloud only`

Another cloud-exclusive service - commonly Business Performance Analytics, Copilot features, or Dual-write (which requires Microsoft Dataverse, an Azure service). These have hard Azure dependencies.

The Core Rule to Memorize

Core D365 Finance application features  →  cloud or on-premises
Azure-dependent add-ins / microservices →  cloud only
Nothing in D365 Finance is on-premises ONLY

Common Mistakes

Mistake	Reality
Thinking on-premises gets all features	On-premises lacks cloud add-ins and is always behind on updates
Assuming "cloud only" means the whole app	Only specific microservice add-ins are cloud-only, not the core ERP
Choosing "on-premises only" for any requirement	This option is never correct for D365 Finance - Microsoft never restricts a feature to only on-premises
Confusing D365 Finance with D365 Business Central	Business Central has different (more limited) on-premises options

TL;DR: Alternate between "cloud or on-premises" (core features) and "cloud only" (Azure microservice add-ins). "On-premises only" is never the right answer for D365 Finance.

Topics

#deployment options#cloud deployment#on-premises deployment#architecture

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