When it comes to Customer Relationship Management (CRM) software, businesses often have two choices: On-premise CRM and On-cloud CRM. This article will focus on clarifying the key differences and pros and cons of each option.

Understanding the distinctions between On-premise and On-cloud CRM can help businesses make well-informed decisions, optimize customer relationship management, and succeed in today’s business landscape.

Related Reading: What is CRM? Top 5 benefits of using CRM software in 2023

On-Premise CRM Software

On-premise CRM is a type of CRM software installed and hosted on the servers and infrastructure owned by the business. When deploying On-premise CRM, the business takes responsibility for all aspects of the CRM system, including hardware, software, maintenance, security, and database management.

Pros

• Data Control: Businesses have complete control over their CRM data, which is particularly crucial for safeguarding sensitive and essential information.
• Customization: On-premise CRM systems frequently provide a high level of customization, allowing businesses to tailor the software to meet their specific needs and operational workflows.
• Security: With full data control, businesses can implement their security measures and protocols to ensure the protection of both customer and business data.
• Operational Efficiency: On-premise CRM software can offer robust operational efficiency and faster data access as it is stored and operated entirely on the internal servers and infrastructure of the business.
• Cost Efficiency: On-premise CRM requires businesses to pay for hardware and software licenses upfront. However, ongoing costs can be significantly lower than cloud-based CRM, making on-premise CRM cost-effective in the long run.

Cons

• High Initial Costs: Implementing on-premise CRM entails substantial initial payments for acquiring servers, obtaining software licenses, and establishing the necessary infrastructure. This considerable upfront investment might pose challenges for some businesses.
• Maintenance:  Businesses have responsibility for all maintenance tasks, security measures, updates, and issue resolutions. This can consume a lot of resources and requires a highly skilled technical team.
• Limited Accessibility: On-premise CRM software is quite limited in terms of remote access, making this system less appealing to businesses with multiple branches in different locations.
• Limited Scalability: Scaling up the on-premise CRM system can be complex and incur significant costs for purchasing and configuring additional hardware and software.
• Software Backup: Businesses must deploy their own data backup solutions to ensure the availability of data in case the CRM system encounters unforeseen issues.

Some popular on-premise CRMs like Microsoft Dynamics, Oracle Siebel CRM,…

On-Cloud CRM Software

On-Cloud CRM is a form of customer relationship management software hosted on the remote servers of a third-party provider. With this software, businesses are relieved from the task of managing and maintaining fundamental infrastructure like servers and central databases, as those responsibilities are handled by the On-Cloud CRM provider.

Businesses can access the CRM system from anywhere with an internet connection through a web browser or mobile application.

Pros

• Easy Deployment: On-cloud CRM systems are typically deployed quickly because they don’t require complex hardware setups or software installations.
• Low initial costs: Cloud CRM solutions often have lower upfront costs compared to on-premise CRM solutions because businesses don’t need to invest in servers and infrastructure.
• Scalability: Cloud CRM can easily scale to meet the growing number of users and changing business needs without the need for additional hardware investments.
• Accessibility: Cloud CRM users can access the system from anywhere with an internet connection, making this software appealing to businesses with multiple branches in different locations.
• Automatic Updates: On-cloud CRM providers are responsible for handling updates and maintenance, ensuring users quickly access the latest features and improvements.
• Data Security: On-cloud CRM providers are highly regarded for their ability to offer optimal security measures to protect customer data.

Cons

• Data Control: The entire data is stored on servers owned by the third-party provider. This raises concerns about data control and security, as well as risks from the provider’s end.
• Dependency on the Internet: Cloud CRM operations rely on Internet connectivity. If the connection is slow or interrupted, it may impact the overall system performance.
• Customization Limitations:  While many cloud CRM solutions are highly configurable, compared to on-premise CRM solutions, they still have limitations in terms of customization.
• Subscription Costs:  Using on-cloud CRM, businesses will incur ongoing monthly or annual usage fees. Initially, the upfront costs may be lower than on-premise CRM, but there are ongoing fees such as user quantity fees, customization fees, etc., which businesses will continuously have to pay throughout the deployment process. This leads to an increase in the total cost of using the cloud CRM system over time.

Some popular Cloud CRMs include Salesforce Sales Cloud, SAP Sales Cloud, Oracle CRM On Demand,…

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What is The Difference Between On-Premise and Cloud CRM?

On-Premise CRM vs On-Cloud CRM: Which is The Better Choice?

The choice between On-premise and On-cloud CRM becomes a crucial decision in the strategy of deploying CRM. Each type comes with its own set of advantages. On-premise CRM offers high control and customization, while On-cloud CRM is convenient, flexible, and helps reduce the burden of infrastructure and initial costs. 

The ultimate decision depends on the deployment needs, data control requirements, and budget.  Nevertheless, both can serve as valuable tools for businesses to manage customer relationships and amplify operational efficiency. 

Contact SECOMM or call the hotline at 02871089908 today to learn more about deploying and developing a comprehensive CRM system and determine the optimal choice between On-premise and On-cloud.