Wednesday, April 22, 2009

Networked, On Premise, Web Based, Hosted, Cloud ... WHAT?

What is all this jargon?

In addition to our three basic categories of software for managing your customers (see my blog "Finding the Right Sales Tool for Your Business"), products come in a variety of accessibility forms. This discussion is merely a starting point to help you identify which approach is right for your business. As I always suggest, a knowledgeable consultant is well worth the investment to help you implement the right solution to grow your business.

This refers to products which have the data located on a server in your company and the users’ access to the data is across either a cabled or wireless network, generally within a single location. Remote users may have a copy of the database which is periodically synchronized with the central database. Examples of Networked Sales Software would be ACT! by Sage, Goldmine, or Sage CRM SalesLogix. The advantage is that you have complete control of your data. The disadvantage is that your data is available to you only through the network, a VPN or Terminal Server connection, or with a synchronized database that is not real-time. You also have the expense of acquiring and maintaining a server and your software.

On Premise Web-Based
This means that the software and data are loaded on your server, but you can access the data across the internet without being connected to your network. ACT! for Web and Microsoft Dynamics CRM On Premise are samples of On Premise Web-Based products. The advantages are that you have complete control and you can access your data any time from anywhere if you have internet access. The disadvantage is that you must have a server and maintain your software and the server.

Cloud or Software as a Service (SAAS)
Software as a Service (SAAS) or Cloud products are web-based tools that are housed on, generally, the software publisher’s servers. These are subscription-based. You pay a low monthly fee per user and the software publisher houses the software and your data. You don’t have to worry about a server, backups, server or software maintenance, or upgrades – it is all handled for you within the monthly fee. Generally, you can get your data on request. Samples of Cloud or SAAS products are Microsoft Dynamics CRM Online,, and Sage CRM Online. The advantages are a low cost of entry for a high-end product, any time anywhere access, and no server expense or worries. The disadvantages are that the fees are ongoing, there is some functionality that is lost compared to an On Premise version, and the data is offsite.

A hosted solution is essentially a combination of an On Premise and Cloud solution. You have an On Premise product that is housed on someone else’s computer. The advantages are that you do not have server purchases or software or server maintenance, but you often have the On Premise functionality that is lost in a Cloud version of a product. Hosted arrangements vary significantly. Sometimes you own the On Premise version of the software and must purchase upgrades as they are issued. Other times use of the software is included in your monthly fee, similar to the SAAS approach. Disadvantages are that you have an ongoing fee rather than a one-time expense. It is also important with a hosted solution that you know the viability of the hosting organization and you are comfortable with their security measures and backup procedures.

I hope this has helped take some of the mystery out of the terminology related to the framework on which your sales software is built. There is no right or wrong answer - it all depends on your company's needs, philosophies, and plans. If you have more detailed questions, email me at .

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