Cloud computing is definitely a hot trend, and figures prove it. In a recent study published by IDC on the CRM market for 2017, an annual growth of the SaaS CRM market of +13.7% was reported against a negative annual growth for on-premise CRM, with a staggering – 6.7%. Does this mean that on-premise CRM is a thing of the past? I think it would be a mistake to think so, let me explain why.
Historically, some CRM providers (including one based in San Francisco) chose to specialize in a SaaS offering from day one. Others initially offered both (SaaS CRM and On-premise CRM) to then only focus on one of these modes of acquisition. Why? Is this the right way to go?
An underlying trend for cloud-based CRM
Over the last 10 years, the SaaS trend has been gaining tremendous momentum. Software providers were able to overcome the initial misgivings or fears of consumers. All software areas are affected (CRM, ERP, HR, etc.), and nowadays, more and more IT departments feel confident about taking this route.
In its study entitled The SaaS market in France, IDC notes that the SaaS market represented 12% of the total software market in 2016, a figure which is expected to reach 19% by 2020. As for the CRM market specifically, SaaS CRM represents over 50% of the market.
On-premise CRM: not a choice by default
However, some companies still opt for an on-premise mode. Why? Is this simply due to conservative IT policies? Not at all! The decision to opt for an on-premise solution often stems from more than simple resistance to change.
One key concern prompting companies to choose the on-premise mode is security. Companies want to control their data at all times. What about a SaaS CRM provider that hosts data in a country governed by regulations that allows the government to access data hosted on its territory?
Another frequent reason put forward by companies is costs. While SaaS CRM and On-premise CRM have roughly equivalent costs over a period of 3 years, most CRM projects last approximately 5 years. This means companies can save on 2 years of subscription with on-premise CRM.
The third main reason large companies opt for an on-premise solution is resources. These companies have very large IT teams and the CRM system can be integrated within a set of applications they are in charge of.
SaaS or On-premise, choose wisely
Each mode meets different needs in terms of IT requirements. One recommendation I can give you would be to challenge preconceived ideas on either mode (we will be publishing an article on this in a couple of weeks). The most important thing is: make sure you always leave yourself a way out. If you choose SaaS CRM, make sure you have a way out, and that if you choose to leave, you will be able to get your data back in a format you can use. If you opt for an on-premise mode, then make sure you always have the resources and infrastructure you need to manage your CRM.
The best, of course, is to work with a CRM publisher which can offer both modes. That way, you will never be trapped in a dead end. Just saying….