We are finally looking at cloud-based system to replace an old CRM system but have been thrown off by the “false cloud” and “roach motel” comments we’ve been hearing. How valid are these accusations and cloud security concerns?
Don’t worry about what the vendors say about each other. Just keep focused on the problem you’re trying to solve and pick the solution that best fulfills your needs.
As it turns out, organizations of all sizes are increasingly considering Software as a Service (SaaS) options to support their customer-facing business processes. CRM vendors are responding with a variety of "on-demand" deployment models, including multi-tenancy, private hosting and hosting of traditional on-premises solutions. Some vendors also offer "hybrid" deployment, which is the ability to run a SaaS system integrated with an on-premises version.
With more frequent upgrades, faster deployment, lower up-front costs and high acceptance by employee end users, customer demand for CRM SaaS applications shows no signs of slowing down. However, there are number of factors to consider before to you decide if going to the cloud is right:
- Total cost of ownership. Buyers have trouble comparing the costs and benefits of SaaS
systems to traditional on-premises models. Many SaaS buyers believe that while SaaS is cheaper
up-front, it's more expensive in the long run.
- Integration and customization capabilities. Concerns around customization and
integration have long plagued the SaaS space, and while vendors have made strides in both areas,
they still have not caught up to on-premises options. With these systems, firms can modify the
underlying code and data models, and more developer tools and prebuilt connectors are typically
- Data security. Buyers worry about a cloud vendor's lack of adequate hosting or backup
facilities or they fear giving business users with little training too much control over roles and
access rights, which is often the case in SaaS.
- Pricing models and contract agreements. SaaS pricing models that seem simple and inexpensive (flat per-user monthly fees) can become costly and complex when users sign up for different pieces of functionality and support options. Additional charges often apply for support, configuration services, additional functionality or going beyond a preset storage limit. Unpleasant surprises may await you through difficult-to-enforce service-level agreements or onerous provisions that kick in at the end of the contract term.
This was first published in December 2011