The updates only apply to customers hosted in the Microsoft commercial cloud and not for on premises deployments which are managed by customer organizations. So far, the Microsoft government clouds for the United States and Germany are also operating on their own update schedules in order to maintain compliance with government security and privacy regulations.
I will not restate all the details which you can review at FAQ for Dynamics 365 for Customer Engagement apps Update Policies as well as Previewing April 2019 release functionalities and updates for Dynamics 365 for Customer Engagement.
Here are some highlights and thoughts on the update policies of cloud services.
- Cloud vendors are pushing updates more frequently. They are under competitive pressure to release new features and versions, and this trend is unlikely to end.
- Cloud vendors prefer not to allow customers to choose update dates. This is especially true for bug fixes and security patches, which need to be applied as soon as possible.
- Customers must test new versions. Innovation will lead to new features, and some will replace features which will be eliminated (deprecated) while others will offer new ways of doing the same thing. The Unified Interface, for instance, provides a new menu system to navigate Dynamics, but for now can live side-by-side with the "classic" menus. Before long, the Unified Interface will become "classic" and be replaced as well. Microsoft is not responsible for testing customer solutions and ensuring that they will function after major updates. All they can do is provide notification and access to the new versions
- You need sandboxes more than ever. One of the most important features of a Dynamics sandbox (a non-production instance of Dynamics) is to allow testing before introducing a system to production. You may need more sandbox environments to test your customizations on forthcoming versions of Dynamics.
- Customers who deploy on premises will fall further behind. You can avoid the effort of continuous improvement and testing by sticking with on premises deployment, an option that Microsoft provides for now but which is not offered by cloud-only plays like Salesforce. The tradeoff is falling behind on product features and potentially exposure to risks from not applying patches and other fixes.