Software CRM vs. Online CRM – The Pros and Cons

by | Dec 14, 2010

Would a software CRM or an online CRM be the best answer for your business?

If better customer relation management is an objective, once you begin your search for a solution, you’ll find many options and the choices can be overwhelming. Of course, there are many options related to capabilities and features. However, just deciding whether to go with a hosted, or web based CRM versus a software CRM is a more fundamental decision that must be made.

Contact management software and CRM software have been around since the mid 1980’s with ACT! software being the first and still the most widely used. Today, many businesses which have relied on software CRM products are migrating to online CRMs.
The distinction is that software CRM is a software product that is purchased for installation on the business’ own computers. Online CRM is accessed via the Internet and the software and data is maintained on the vendor’s systems.

Technical Differences of Software CRM vs. Online CRM

In addition to the technical differences, there are fundamentally different economic models that directly impact the suitability of these solutions to each business. Software CRM is normally purchased for a one-time license fee with on-going costs limited to upgrade license purchases when new versions are available and sometimes software maintenance fees, which typically range less than 30% of the original software license fees each year. Online CRM is normally paid for as a subscription that recurs each month or year. Support and help desk access is another variable that varies from vendor to vendor.

In part two of this article, we’ll compare the pros and cons of both types of CRM from an economic point of view. There is also a philosophical consideration that is part of any smart business decision.

CRM is about a business’ valuable customer and prospect information. Each business must make its own determination of whether the risk of loss or misuse of this information when it is stored on the business’ own computer systems or on a vendor’s systems.

Software CRM vs. Online CRM – Part 2

See Part 2 of this article for side by side comparison of the pros and cons of software CRM versus online CRM Read Part 2 Here.