CRM in the Cloud: Which Model Is Right for You?

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CRM in the Cloud- There’s little question for most companies whether they will use cloud-based CRM solutions. Even before the pandemic made on-premises installations of CRM or other software much more challenging, public companies and even government entities were transitioning quickly to cloud-based solutions.

“A growing percentage of our customers are in the cloud today,” says Jonathan Moran, product marketing manager at SAS.

“There’s been a steady rise of CRM-in-the-cloud deployments since the early 2000s,” adds David Campbell, vice president of product marketing at SugarCRM. “It rose from the ashes of the dotcom. At the time, there was euphoric investment in speculative ideas. Post the dotcom bubble, companies were using that technology to get behind proven business models and/or ideas with strong business cases behind them.”

While Campbell traces the beginning of CRM in the cloud to the early 2000s, others say there wasn’t much of an uptake until about 10 years ago.

The popularity of cloud options has grown significantly, with a recent Gartner report citing three-quarters of recent CRM implementations in the cloud. Two years ago, about half of SugarCRM’s deployments were in the cloud. Now 80 percent are cloud deployments, Campbell says. “A fair amount is pandemic-driven, but it’s not a temporary change. There are many advantages to the cloud.”

Esteban Kolsky, SAP’s chief evangelist for CX, adds that the continuing growth of data available to CRM systems is simply too much for most on-premises CRM solutions, whereas cloud-based systems don’t have such data limitations.

“The cost of maintaining data in real time continues to be cheaper and more efficient in the cloud. Customers saw that value,” Kolsky says.

Companies, by and large, found it far easier to enable employees to work from home amid pandemic-induced lockdowns with cloud-based solutions, but beyond meeting the limited contact needs of the pandemic, there are other factors driving companies to the cloud for CRM. Going to the cloud helps companies with limited resources because cloud deployments don’t have the large up-front costs of onsite deployments, Moran says. Companies have laundry lists of priorities for their resources. Cloud-based deployments don’t require companies to pay for or maintain the same resources as on-premises deployments.

Companies have access to new capabilities more quickly than with on-premises deployments since there is no need to go onsite to make upgrades.

Additionally, costs of CRM deployments in the cloud have dropped significantly. For example, Amazon Web Services (AWS) offers 80 percent more services in the cloud than it did four years ago, but prices have been slashed as much as 60 percent, according to Campbell.

And then, reliability is another issue. “There’s been a marked improvement in the speed and reliability of the cloud infrastructure. This rapid innovation of cloud services enables Sugar to innovate our products at a rapid pace so that we can bring new features and technology to market much faster,” Campbell adds.

AWS offers tools to make machine learning models available to CRM vendors and their end customers without having to train the staff of either, making it more cost-effective to launch enhanced capabilities.

With the cloud, though, it’s not an all-or-nothing proposition. While the majority of companies are going to the cloud exclusively, others are moving much of their CRM functionality to the cloud while still keeping some of the most sensitive CRM information on premises in hybrid solutions, according to Moran.

Read more at Destination CRM