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First of all, whether you go with a 'hosted' vs. 'on-premise' solution is, in the grand scheme of things, one of the least important decisions you'll face. What's most critical is to align best with your business requirements - which hopefully you've outlined in great detail (the more, the better). Once you've taken those steps, the 'lease vs. buy' decision is strictly financial.
Having said that, hosted SFA solutions generally offer a much quicker time-to-value and lower up-front financial risk. The downsides are that these solutions are generally more difficult (if not impossible) to both customize and integrate with existing systems. Again, all of this falls far behind business alignment/value, but these are the most typical 'pro and con' issues.
FOR MORE INFORMATION:
Find out more about hosted SFA technology in the SearchCRM.com article Buyer beware: Hosted SFA has its pitfalls
Browse through our collection of sales force automation stories from around the Web
This was first published in August 2004