CRM SaaS versus On Premise

Is CRM SaaS or On-Premise Right For You?
Although the on-premise CRM software market continues to trickle along while the SaaS CRM software market grows at a much more aggressive rate, it is clear that both delivery methods have a place in the overall Customer Relationship Management market based upon each organization's specific needs and objectives.

CIO Insight Perspective
CIO Insight magazine provided some key decision making criteria when comparing SaaS and traditional software licensing.

Consider SaaS if your company has:

An expense budget than is larger than its capital budget
Limited IT support
A distributed workforce
A sales- or service-oriented business

Consider a traditional license if:

The software requires a great deal of customization
The application is tied to a core function of your business
You have already invested significantly in internal IT
Laws require data to remain behind your firewall

CIO Magazine
CIO Magazine offered their perspective in the January 2006 edition.

CIO recommends on-demand/hosted CRM systems for:

Customers seeking to implement standard processes from a variety of industries and companies
Companies that are able to use standard data structures
Companies with more basic integration requirements
Companies with limited technical resources and support personnel
Companies seeking variable pricing and lower up front costs
Companies dealing with nonproprietary data

CIO recommends on-premise CRM systems for:

Companies seeking to implement highly customized customer management practices
Companies that need specialized data structures
Companies with complex or real-time integration requirements
Companies with available in-house IT resources and support systems
Companies can afford the up-front capital investment and recurring fixed costs
Dealing with highly sensitive data that you don't want other parties to see

It seems particularly relevant when organizations benefiting from licensed software tout the SaaS market growth. For instance, according to Jim Corgel, General Manager of IBM e-business Hosting Services, "The hosted market will grow at 20% annually - that's four times as fast as unhosted software."

10 to 1

The ratio of how much companies may spend on hardware, maintenance and support of purchased software, compared to the initial price.
Source: Garner 2005

Lastly, we think that former Oracle President & COO Ray Lane said it best, "Software-as-a-Service is an inevitable, fundamental shift in enterprise software culture."

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