Buying or renting CRM applications?

Some of our previous discussions focused around hosted versus on-premise CRM solutions. In your research you may be asking yourself, what’s a better deal? Many of the hosted CRM vendors will try to convince you that a hosted solution is a far better deal than owning the software yourself. An easy comparison is renting an apartment versus buying a house – what’s better for you? Common sense tells you that owning is always a better deal in the long run.

Whatever solution you go with, you will want your CRM system to be a long-term solution that your company will use for many years in the future. We suggest you perform a multi-year comparison so you can clearly understand the short term and long term costs of a CRM system for your company.
With a hosted CRM system, you will face monthly rental costs for as long as you want to utilize and rent the CRM system. Further, you will need to keep in mind implementation, customization, and training costs.
The biggest downfall of a hosted system is that the rental fees can reach exorbitant proportions over time.
Typically, if you compare the rental fees over a two to three year period – for the same price you could have purchased an on-premise system and own it alright with no future payments due. Most vendors in the hosted space charge anywhere from sixty dollars per user per month to one-hundred and fifty dollars per user per month. This can get very expensive over time.
With an on-premise CRM system, you typically pay once for the software and you own the license outright with no future payments due. Also, many CRM vendors have a lease to own program where you can pay by the month for thirty-six months but then you own the license outright with no future payments due.

Your Next Steps

As you can see, overbuying a CRM system can be a costly mistake. There are a wide range of CRM products in the market that focus on companies of all different shapes and sizes. From CRM systems that focus on the small business to mega CRM systems that cost millions of dollars that focus on the largest of companies – there is something out there for just about every company.
We suggest you perform extremely diligent research to ensure the CRM system your company needs is properly evaluated to ?t the unique needs of your company.