Hosted vs. On premise CRM

Examining the choices - Online, Hosted, Software as a Service and On-premise

A conversation with a customer

By: Andy Brownell

Before we begin let agree on the terms:

  • SaaS stands for software as a service. You access the application through your browser. You aren't responsible for the underlying database or any of the infrastructure - servers etc to run it. You pay a monthly fee per user and that's it. This is a very popular business model because of ease of deployment, consistent platform for support, instant upgrades etc.
  • On-premise is exactly what it sounds like. The application is at your site. You can physically touch the server(s) it is running on. You are responsible for the firewalls, routers, hubs, LAN, SAN, backup etc. While you may think the majority of the cost for an on-premise solution is hardware, it typically isn't. It's the people to manage the infrastructure that cost the most money.
  • Hosted means it is hosted elsewhere. It could be hosted by your IT department or it could be hosted by a consultant. Typically it means that you own the software but it is running on servers someplace besides your physical location.

I was talking with a medium sized company. They were thinking about implementing LeadMaster. They had about 50 sales reps and another 50 sales and marketing managers that would be using the system. Nothing unusual there, we have thousands of people using LeadMaster. But how they arrived at an earlier decision to implement on-premise CRM vs. a hosted solution is interesting.

The CIO of the company had allocated $500,000 and a development team to implement the Dynamics solution. They had originally planned on rolling it out in 12 months. The company created a customer requirements team to decide what features the system should include. They also had a rollout team to be sure everyone knew how to use the system and a QA team to make sure the system worked like it was designed.

Here it is 18 months later and still no solution. The project was 6 months behind schedule and over budget. With all the committees the amount of time away from normal business activity was a serious drain on productivity. As this point in the conversation there was what some people refer to as a 'pregnant pause' when we told them that most of our customers were up and running the next day and training typically takes about an hour.

I decided to do some math to compare hosted CRM vs. on-premise CRM. Let's use the original $500,000 budget as a point of comparison. Using an average cost of $50 per month per license for LeadMaster for their 100 people it works out to be $5,000 per month. Your cost may vary depending upon the features your choose but $50 is a good number because it gives us a round number.

For that same $500,000 they could've implemented LeadMaster for 100 months or a little more than 8 years. But wait, not only were they way over budget on the $500,000 but there were other costs because of all the committees and task forces, not to mention the opportunity cost because people were tied up with those meetings instead of revenue generating activities.

It is safe to say the true cost was at least double or $1 million. They could've licensed LeadMaster for nearly 20 years for the same cost. But wait, it gets better. Because they wouldn't have had to spend the entire $1 million today they could've invested that money back into the business to grow the company.

Yes, there are many good reasons to look at LeadMaster. Not the least of which are immediate implementation and ease of learning. Give us a call today and you can be up and running tomorrow.

Click here to send us an email and we'll send you a user ID & password to our system so you can see for yourself just how easy it is to manage your leads with LeadMaster. No strings attached.

Give us a call - 800-699-4164 and we'll connect you with one of our CRM experts. We've helped hundreds of companies just like yours. Don't waste another day. Give us a call - you'll be glad you did.

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