Will on-demand CRM eventually replace on-premise CRM?

Will on-demand CRM eventually replace on-premise CRM?

In your opinion, in the future, will on-premise CRM be completely replaced by on-demand CRM, or will on-premise implementations always have a place in the CRM market?

    Requires Free Membership to View

    Login

    When you register, you'll begin receiving targeted emails from my team of award-winning editorial writers on the latest customer relationship management (CRM)and call center technology issues today. Our goal is to keep you informed on the hottest issues facing this fast-changing industry.

    Hannah Smalltree, Editorial Director

    By submitting your registration information to SearchCRM.com you agree to receive email communications from TechTarget and TechTarget partners. We encourage you to read our Privacy Policy which contains important disclosures about how we collect and use your registration and other information. If you reside outside of the United States, by submitting this registration information you consent to having your personal data transferred to and processed in the United States. Your use of SearchCRM.com is governed by our Terms of Use. You may contact us at webmaster@TechTarget.com.

When I think about on-demand CRM and this question my mind goes naturally to … radial tires. Yup, radial tires came on the market in the 1960s or 70s, I believe. At first they were only available on imported cars — my brother's MG had Pirelli's and I will never forget the experience of taking my first corner in a car with rack and pinion steering and radials. Wow! It was better in so many ways. Old bias-ply tires were the norm and for a while it seemed like there would always be a division and the two types would co-exist. Then, the inevitable tipping point occurred. Radials lasted longer, gave a better ride, used less fuel and wore more evenly — over night we all went to radials.

We've been through the same kind of transition in the last eight years with on-demand computing. We've seen the superiority and the the ease of use associated with on-demand CRM. In my mind, the question is this: When will vendors wind up their on-premise businesses and go completely on-demand? This change-over is a business model issue and very complex — more complex than changing the tire-making technology.

The other thing to keep in mind is that tipping points are very specific. For example, on-demand sales force automation (SFA) is a "no-brainer," but using on-demand software in the call center is a different matter. There is still a legitimate reason for a large call center operator to operate an in-house call center despite the fact that on-demand call center solutions already exist. The issues are cost, complexity and control. So, for the time being I think we are in a transition state. The real question is: How long will the transition last?

This was first published in December 2007