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