CRM - July 2008 - (Page 32)

ON-DEMAND CRM MYTH ONE: THE SMALL FRY ARE THE ONLY ONES SWIMMING Because of the flexible, pay-as-you-go pricing model, SaaS solutions remain a viable and attractive solution for small and midsize businesses (SMBs). In addition, smaller companies lacking IT support find leverage and increased flexibility in the Web-delivery model. But what about larger companies? “[We] found a long time ago that there was a significant level of interest and adoption of SaaS among large-scale enterprises,” Kaplan says. “They weren’t ready to talk about it, but they did recognize the potential benefits of SaaS; they were among the first to bring in experts to see if [on-demand CRM] could fulfill expectations.” SMBs may have led the dive into actual SaaS adoption, but around the same time, large enterprises were testing the waters. In fact, according to Nucleus Research, growth in the on-demand market is apparent across all company sizes. “Initially a lot of deployment of ondemand CRM in the enterprise was small pockets of people under the radar,” says Rebecca Wettemann, vice president of research with Nucleus. “What we are seeing more and more is that it’s a management decision to deploy a better CRM.” A recent survey by Nucleus finds that 51 percent of organizations are now using some kind of an on-demand solution. The survey reveals that organizations—small and large—are adopting on-demand to support applications such as CRM, project management, content management, and e-commerce, among other functions. Surprisingly enough, the research shows that 63 percent of companies with more than 1,000 employees have adopted on-demand technology, compared to just 46 percent of companies below that threshold. In most cases, Wettemann says, it doesn’t make economic sense to not consider SaaS. CRM remains one of the key focus areas within SaaS application development. “We saw about 60 percent of business [last year] coming from on-premise, and 40 percent from on-demand,” says Ashu Roy, chief executive officer of eGain Communications, the maker of eGain OnDemand. “This year, so far the trend is about 50-50, and hosting has moved up steadily. We have also seen a lot of ‘mixed-mod’ implementations.” EGain was previously tailored to the SMB, he adds, but in recent years has found more enterprise adoption. The SaaS movement is not slowing down: In fact, Nucleus says that 64 percent of all companies plan to consider implementing an on-demand solution in the upcoming year. public enterprises see that SaaS might actually help handle security and privacy issues. A major advantage for companies with vast data is the ability to back up that data easily and rapidly. “Being able to do easy exports and backups is critical,” says Chris Harrick, senior director of marketing for SugarCRM. With this in mind, Nucleus shows that security concerns are the SaaS stumbling block less than one-fifth of the time. Wettemann says that a lack of familiarity with the technology may be a greater obstacle. Many employees are stuck in their ways and comfortable with the way on-premise works. Wettemann says that cultural reasons will keep certain companies tied to onpremise—working with what’s most familiar. Bruce McIntyre, vice president for CRM at CDC Software, echoes that notion, saying that in no way will the on-premise ever completely fade away. If concerns about security are fading, are the numbers rising? “As the big players move wholesale—for example, Microsoft last year—what you’re seeing is that the security issue is being resolved just by the adoption of large organizations,” McIntyre says. Case studies and research—and, perhaps, certain articles in certain magazines—pointing out that SaaS does work for the enterprise all help garner attention and recognition among other big companies. (Again, note the increased SaaSCon attendance.) “The idea that this is light and fluffy CRM is not true,” Wettemann says. MYTH TWO: ON-DEMAND CASTS A NET WITH HOLES, RISKS, AND INSECURITY In previous years, publicly traded companies worried that SaaS wouldn’t let them manage regulatory deployments. And those with sensitive data saw the Web as a threat and a concern. Now “[Large enterprises] were among the first to bring in experts to see if [on-demand CRM] could fulfill expectations.” 32 CUSTOMER RELATIONSHIP MANAGEMENT | JULY 2008

Table of Contents Feed for the Digital Edition of CRM - July 2008

CRM - July 2008 Contents Front Office Reality Check Customer Centricity The Tipping Point CRM’s a Social Animal SAP Looks to ‘Change the Game' CRM on Twitter CRM to the Max A Prescription for Satisfaction Required Reading Cover Story: Is Microsoft Winning the CRM Race? Jumping into the SaaS Pool Say What? Another Bright Idea Out of Edison A Small Biz Blossoms Biting Off the Right Amount Something for a Rainy Day Connect Re:Tooling Pint of View

CRM - July 2008

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