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Definition: Hosted CRM vs. SaaS CRM vs. on-premise CRM

Can you define "hosted" versus "on-premise" as it relates to CRM? I see so many different terms being used to describe CRM implementations and I'd like to hear your definition.

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On-premise and hosted CRM are very different from each other, to begin with. On-premise is easy, it's conventional software — what we've all become used to. It involves installing software on your own computers in your computer room and using your own IT staff to manage it.

Hosted CRM might confuse people, though. Hosted refers to the fact that the software is delivered as a service — these days across the Internet — but it may not necessarily refer to what we see coming from popular SaaS vendors like Salesforce.com, NetSuite, and RightNow. Hosted simply means someone else is managing the application on a computer that is remote from the user. So, for example, a facilities management (FM) approach satisfies the definition. FM might operate just like your own IT staff but with a longer distance from the user than your computer room. Hosted makes no promises about the applications being delivered in a multi-tenant mode. Generally speaking, you can service more users in a multi-tenant environment than in one that is more traditional and simply separated from the user by a greater distance.

This was first published in June 2007

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