Cloud CRM vs on-premise CRM: Which is a better choice for you?

December 12, 2012
By guest blogger - Paul Anderson

For most companies which have adopted CRM or customer relationship management to improve their business performances the difficulty arises when it comes to choose between on-premise and cloud based CRM.

On-premise CRM
It is the conventional approach where the CRM is loaded to its destination system and managed by in-house IT team. The company enjoys complete control over the database while the IT department ensures its smooth functioning.

Cloud CRM
The CRM is hosted at a remote location and available to its clients over internet. The client will log in to the system as it logs in to its in-house CRM.

Both on-premise CRM and Saas CRM (as cloud CRM is also known as) have certain advantages and disadvantages and before you make a decision it’ll be useful for you to learn as much as possible about both to make an informed choice.

On-premise CRM SaaS CRM
Normally involves big fund investment Inexpensive compared to on-premise CRM
You would need to purchase the package from its manufacturer at one time cost Expenses involve subscription, maintenance and customization
Installed in client’s system Hosted in a cloud with cloud service provider and available to its clients through internet
Takes time to fully integrate the CRM to client’s business environment Often preferred for easy deployment
Its performance depends largely upon the expertise of the IT staff of the company Does not need the service of in-house IT staff and thus, reduces your IT budget
Functionality doesn’t depend on the internet connectivity of the company Depends on internet connection but has less downtime complains
Installed to a fixed destination Can be accessed from anywhere since hosted in a cloud
Customization can be done to meet client’s requirements The SaaS CRM provider often allows the clients to customize the CRM with custom fields
It’s a better choice for more complex business needs More suitable for businesses with limited technological expertise.
Big enterprises with established IT infrastructure are often the appropriate client for on-premise CRMs Often a preferred solution for small and medium size businesses (SMBs)
You’ll need to maintain an internal server to host the CRM Often the hosting facility is offered by the SaaS service provider
Need to maintain a set-up to ensure data security and data recovery Data security services are also offered by the hosting service provider and thus, lowers your expenses further

You can either be a client of on-premise CRM or SaaS CRM. Often a concern with hosted CRM is that your sensitive data will be handled by a third-party service provider. But it also helps reducing your headache in managing the software and frees the workforce to concentrate on the actual business, i.e. sales. Some companies are also adopting a hybrid environment with features of both on-premise and cloud based CRMs. Weigh all your options before making your decision.

Author Bio:
On-premise CRM vs Cloud CRM, that is the question. But worry no more. Paul Anderson, expert on cloud computing understands that there is a scope for spreading awareness among users regarding cloud CRM customization to allow them make an informed choice.

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10 Responses to “ Cloud CRM vs on-premise CRM: Which is a better choice for you? ”

  1. Brad Hodson on December 14, 2012 at 2:02 am

    Great explanation, but I would still choose Cloud CRM any day. Can’t beat the benefits of off-premise, hosted systems. Their OTA updates are faster, more frequent, and get to you sooner than the slow roll-outs of yesteryear, and not having to manage a system is an unseen blessing.

  2. Ian Moyse on December 15, 2012 at 6:50 am

    Cloud CRM brings a great deal of flexibility and resilience to smaller businesses that on network solutions find challenging and more costly to deliver. Also cloud solutions allow faster innovation by the vendor without a need for the customer to perform any updates. With an increase in mobility and variety of devices delivering CRM to a user any time, any device is going to become increasingly expected and cloud makes this an easy proposition for any business.

    Ian Moyse

  3. David Faye on December 18, 2012 at 12:19 am

    Great review of the qualities of each approach without pushing either one. We do a lot of work with SugarCRM which gives users the option of each. That’s one of the reasons we like it so much.

  4. xavier Peremans on December 20, 2012 at 9:55 am

    Indeed great review but depending on the country where you are or your business: small and medium size businesses may have a different signification.

  5. Bernardo Lira on December 21, 2012 at 7:46 am

    As an expert (Cloud CRM) user, I’d say some of the “SaaS” comments would not match salesforce capabilities. Salesforce is capable of providing far more flexibility than a number (if not all of ‘em) of other on-premise platforms, and salesforce has also been proved for large companies and big corporations. In the end, it is due to the fact salesforce is a true Enterprise Cloud Platform, which includes SaaS but adds up “IaaS” (infrastructure as a service) and, more impressive, “PaaS” or (development, deployment) platform as a service.

  6. Narayanaswamy R on December 22, 2012 at 8:11 am

    Gr8. Good way of presenting info in a crisp and complete manner. Infographics stole the show

  7. Hashim on December 26, 2012 at 6:11 am

    If you are a small/medium enterprise, SaaS for you and if you are spread across geographies, have many dependent functions etc. on premise – as I see it :)

  8. Kannan on December 27, 2012 at 2:57 am

    Installed to a fixed destination – a point that you mention in your comparison regarding On Premise

    I dont agree to that, as an On premise app when deployed on a public IP can be accessed in a similar way to that of a Cloud based application

    Another Point that you quote about performance in the On Premise Deployment about it being dependent on the IT staff, it is obviously having a dependency on the IT staff but then a lot of best practices to ensure performance of the CRM is fine tuned depends on the CRM implementation company rather than the internal IT staff

    On Premise CRM products that are positioned at an SMB/Mid Market level do not necessarily require big funds as you mention, yes I do agree that it requires Upfront investment, but the cost of customizations/integrations are on par between both On premise/Cloud based offerings.

  9. Gill Walker on December 31, 2012 at 5:41 am

    While I’m sure that all of the comments made are true of some solutions (both cliud and on-premise) I do not believe that many of them are true for all of the solutions in the group.

    Cloud vs on-premise is one of ther many decisions to be made when deciding on which solution fits a particular requirement.

    Having said that, in the majority of projects that do fail the problems are not caused by the selection of an inappropriate technology, but by inadequate scoping, insufficient training or poor leadership.

  10. George Lee on December 31, 2012 at 10:50 am

    I totally agree with Gill’s statement and let’s not forget CRM governance and users’ adoption.

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