To understand the differences between on-premise CRM and cloud-based CRM it is important to understand what each of these solutions stands for.
- To begin with, the on-site CRM solutions
are essentially CRM or Customer Relationship Management solutions which are created by companies for their individual usage. This means that such companies do not want any third party to handle their company data. On-premise solutions are usually preferred by businesses handling highly sensitive data such as the insurance companies and banking institutions. The cloud-based CRM services, as the name suggests, are web-based solutions which are meant to increase your revenues and offer you an interface for monitoring all clients via a single platform. These cloud solutions can be accessed as services by any number of users across the Internet. Here, the real servers are not locally based but these are only available as servers of a provider.
- The fact that businesses have to deploy on-site CRMs suggests that on-site CRMs will also involve many expenses. There will be heavy installation costs as you will need to recruit new people for building this software. When you must buy and install new hardware you are likely to spend a lot of money. You must also be prepared to pay for the maintenance and update costs from time to time. In cloud-based CRMs, you will never have to spend a fortune for setting up hardware as these are always installed by the provider. Likewise, the host will take care of maintenance and updates for the servers and software. So, you are spared of the additional costs of maintenance and updates. Moreover, deployment time for updates is also much less as these are taken care of by the provider.
- When you have an on-premise CRM, it is important to establish a disaster management mechanism. This backup system
is to be situated far away from your original location to prevent any chance of data losses and damages dues to manmade accidents or natural calamities.
- With on-site CRM solutions, you will have total control over the data and systems; so, you get to plan your updates and upgrades, you can enjoy customizability and you will not have to be scared of data thefts as data is not going to be in a third party site. In cloud based CRMs, there are possibilities of data thefts because data will be stored in third party servers.
- When you have too many users, on-premise CRM solutions may turn out to be less costly. This is because many CRM providers will charge you based on the numbers of users you cater to. So, in such cases, having an on-site CRM system helps. Cloud CRMs will typically cost much less at the start bit whether or not it is less costly than on-site CRMs remains to be seen. With on-premise CRMs, there are only some update and maintenance costs after the initial big investment. But with cloud based CRMs, you will need to keep paying fees for the time you use the services.