What is the Difference between Hosted and On-Premise CRM?

CRM or Customer Relationship Management software help an organization practice effective customer and prospect management. There are various types of CRM software including Vertical, Customized, BYO, On-Premise, Hosted and Cloud systems.

Hosted CRM or On-Demand CRM

Hosted CRM or On-Demand CRM is a type of CRM software installation where the software is hosted by a CRM provider and accessed by the client business online (through the web) via the provider’s secure servers. It could also be installed as a “Cloud”-based offering. The users at the client’s end access this service generally through their browsers.

On-premise CRM

On-premise CRM is a type of CRM where the CRM solution is maintained in-house. The CRM solution is licensed by the customer and hosted on the customer’s systems.

Difference between Hosted and On-Premise CRM Solutions

This article will try and cover the main differences between Hosted and On-premise CRM solutions:

* On-premise CRMs require the installation of extra servers, associated systems and other hardware and software. This results in extra hardware and software costs. Hosted CRM systems do not require extra hardware or software to be installed. Users can access the CRM through their desktop browsers. All that is needed is a dedicated broadband line for Internet access for accessing the CRM software and most organizations already have one. This results in substantial cost savings in relation to On-premise CRM.

* On-premise CRMs incur additional costs whenever the CRM software undergoes updates. Hosted CRMs save substantially on such costs as this model is generally version and update independent. All such aspects are taken care of by the vendor.

* Traditional CRM systems like the On-premise ones require trained manpower for installation, training and trouble-shooting. Hosted CRMs again provide savings in this area as there is no requirement for trained manpower at their end; the vendor takes care of trouble-shooting and if required can provide training at additional cost.

* Hosted CRMs are generally installed as stripped-down versions of a complete suite; as and when the client requires added functionality, more modules are added. This might mean additional fees and negotiation with the vendor which could lead to delays in implementation of additional modules. On-premise solutions are a complete bouquet of modules and there is no necessity for adding additional modules; delays associated with such addition are not encountered here.

* On-premise solutions because they are hosted in-house offer the best-in-class security and control over customization especially as trained manpower is already available for control over technical aspects. Hosted CRMs cannot match the level of security or customization control that On-premise solutions offer.

* On-premise CRMs are ideal for large organizations that require an extensive implementation of CRM. Hosted CRMs are great for smaller organizations who are just starting out with implementing CRM solutions.