On-Premise vs On-Demand
The world of technology is ever-changing. This is no different in the world of Customer Relationship Management (CRM) software. With new changes come new horizons. One integral part of CRM where this is a major factor is with CRM software that is hosted On-Premise or On-Demand. As we will discuss in Part 2 of CRM: Then & Now, this software is moving from being heavily hosted On-Premise to heavily hosted On-Demand. This discussion will also cover the many advantages and disadvantages of the two, and how it really is just up to the customer on which they feel is the better solution for them.
According to a study done by CSO Insights, 85 percent of all CRM systems in 2003 were On-Premise solutions, while just 15 percent were On-Demand, also known as SaaS (Software as a Service). Fast forward seven years to 2010 and on-demand now claims 53 percent of all deployments, to just the 47 percent of On-Premise. One main reason for the change can be correlated with pricing. It can be very expensive to start up an on-premise solution, while the subscription rates of On-Demand CRM's can be a much more inexpensive model. Another reason for this change, as we discussed in Part 1 of CRM: Then & Now, is the advancement of the internet. Some companies have trouble supporting all of their information on their own system, but thanks to the Internet these companies are now able to go with an On-Demand solution and have someone else support it all for them.
There are many advantages to using an On-Demand CRM as opposed to an On-Premise. The first advantage is that with an On-Demand solution you can access the system from anywhere as long as there is an internet connection, and not worry about any local server installation. One of the biggest advantages of an On-Demand service is that there is usually not a large upfront cost for the software since it is usually a subscription fee. This, coupled with the fact that it is a much shorter implementation time than On-Premise, make On-Demand systems very attractive to customers.
However, On-Premise also offers some very intriguing advantages to using its system. While an On-Premise solution can have a large up-front investment, an On-Demand solution can have many hidden subscription fees. A few notable ones include mobile access and extra storage. Many also are of the belief that On-Premise can actually be cheaper in the long-run due to the ongoing fees of an On-Demand solution. The two most prominent advantages of an On-Premise solution would have to be in flexibility and security. An On-Premise solution offers much more flexibility so a company can really modify their system to fit their needs. A company can also have complete control and manage security on their system in an On-Premise solution, that way they do not have to worry about others overseeing the data and making sure it is secure.
Which CRM solution is better: On-Premise or On-Demand? There really is no correct answer. While each has their own advantages and disadvantages, it really is up to the company to find out which type of solution better fits their particular business.
Check back with us later in February to see Part 3 of Customer Relationship Management: Then & Now.