Some server side sync limitations for Microsoft Dynamics CRM are CRM Online, profiles, and the Outlook client.
As of now, server-side sync is not available for CRM Online. It will be implemented in a future release, however, there still may be pending issues. For example, many email systems will require a captcha when being accessed from certain locations. While it is simple to login and enter the captcha information from a server, users do not have access to do so when using CRM Online.
With the email router, you can configure multiple profiles, and each user/queue will have the option of selecting one incoming and one outgoing profile.
With server-side sync, one single profile dictates both incoming and outgoing information, and each user/queue can only have one profile, which can be either of type Exchange, or POP/SMTP. This means that as of the moment, you cannot configure a user with a mix – for example, incoming Exchange and outgoing SMTP.
For a configuration of server-side sync that is meant to replace the Outlook client completely, a user would lose the advantage of being able to select specific tasks/appointments/contacts to be synced into CRM. When using the Outlook client, a user can create a task/appointment directly in Outlook, and sync it to CRM, which is not an option for server-side sync. So using the Outlook client does provide more versatility as far as what needs to be achieved.