EXPERT RESPONSE
A common perception of SaaS CRM is that data is less secure, primarily because it may not physically separated (as in a multitenant model such as Salesforce.com or NetSuite Inc.), and because users are often dependent on a vendor's schedule to upgrade applications or install patches. While true in many cases, SaaS CRM providers generally offer an extremely robust set of data security measures that are often more extensive than what a customer could guarantee if the application was located on-premise. These include items such as data encryption, user authentication, perimeter defense and operating system and database security, among many others.
As a rule, most data security breaches will originate from inside your organization, not from outside forces. If you accept this premise, SaaS data security starts to look pretty good from a cost/benefit viewpoint. There are several types of SaaS architectures offering different degrees of security safeguards, but you'll have to determine what your current and future data security requirements are in order to align to what's available in the SaaS marketplace. I would say in the vast majority of cases, SaaS CRM data security is suitable for most organizations, as evidenced by the number of Fortune 500 companies bringing-up deploying SaaS CRM applications. I would suggest making data security a key component of your application selection process in order to address potential misperceptions about SaaS security on the part of your internal stakeholders.
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