Are You Fighting Software as a Service?

Some people say that software as a service (SaaS) is the wave of the future, but the fact is software as a service has already become the preferred delivery mechanism for the majority of software products today. While some business executives are kicking and screaming about this and claim they will never accept paying a monthly fee for use of software, it has become apparent that their alternatives for the future will become very limited.

Larry Caretsky, CEO of CRM software provider Commence Corporation, has experienced this transition with the company’s customer base. “I think the people who are fighting software as a service do so because they only see the annual cost of the service and do not appreciate the benefits it provides,” says Caretsky.

Until just a few years ago, Commence sold their CRM software for use on premises. Customers would purchase the software along with annual product upgrades and telephone support. This ensured that they realized the maximum value from the product and that it remained compatible with desktop operating systems. Add to this the cost of IT personnel to manage and maintain the software and the operating cost ended up being higher than most executives were aware of. In addition, many executives fail to appreciate that they have expensive server hardware to manage, maintain, and replace after a few years. This cost is rarely considered when evaluating SaaS based alternatives that alleviate all of the above.

Software as service enables you to place the burden of managing and maintaining expensive hardware and software in the hands of professional engineers. As your business grows, additional hardware and IT resources are immediately available to you at a fraction of the cost of an outright purchase. “The growth of software as a service is due to the fact that it is delivering significant value to customers,” says Caretsky “and I suspect this will continue well into the future.”

Top 3 Mid-market CRM Contenders

Commence CRM – – Sugar CRM

The CRM software sector is one of the most competitive segments of the computer software industry.  Despite this, each year more and more vendors enter the race positioning their CRM products as easier to use and lower cost than the established CRM vendors.  The CRM gold rush has created an environment chock full of low cost entry level CRM programs that provide basic contact management and a sales forecast and little more.  While this group of newcomers struggle to compete in this difficult sector, three companies have risen to the top of the charts based on the functionality they provide, the quality of their products as reviewed by customers, and the level of service they provide. CRM is often viewed as the industry leader especially among enterprise level organizations.  The company offers a highly scalable CRM solution capable of supporting several thousand users, robust functionality, multi-language product versions and an add-on developer’s toolkit that enables experienced programmers to customize the applications.

The middle market has become a much tougher battleground for Salesforce CRM.  This is due to two very well established companies that offer a comprehensive suite of applications that compare favorably to, are known to be easier to use, and are much less expensive.

Commence Corporation has served the middle market and small enterprises for two decades. The company has a top rated CRM solution that is highly regarded for its robust functionality, ease of use and ability to be quickly customized without programmer intervention.   One of the unique characteristics of Commence CRM is the product’s modular design which offers customers the flexibility to select only the applications they require for their business vs. being forced into higher CRM costs with a pre-packaged set of CRM features at a set price point.  Commence CRM is also available as a cloud based offering or on premise. This has made Commence CRM an attractive alternative for larger companies that desire an on-premise CRM solution at an attractive price point.   While not yet a household brand name, Commence CRM is built using industry standard technology and the company’s CRM software is currently being used in more than 35 industries and in 22 countries around the world.

SugarCRM is another company that provides a mid market CRM solution and competes with and Commence CRM.  Originally offered as an open source solution at no cost, the company changed direction and now offers their CRM product under an annual software licensing model. Sugar offers comprehensive functionality at a lower price point than and the ability to be customized as well.   The downside with Sugar CRM is that the product is written using the PHP programming language which means you must be a developer to tailor the applications.  This adds additional cost to their offering.

You may find it interesting that Microsoft Dynamics CRM 2011 is not included above. This is because the company’s hosted CRM Online solution was recently released and there is simply not enough history to determine the quality of the product or the ROI and value realized by companies that may have selected it.

The Bottom Line:

If you currently looking to implement CRM software to streamline your internal business processes, you are in the driver’s seat.  There are dozens of options available, but a shake-up is coming and it will be difficult for many of the lower cost CRM solution providers to survive.  Perhaps a more compelling reason to focus on an established CRM vendor is the following: the competitive nature of this industry sector has forced CRM solution providers to reduce their cost to such a degree that the difference between an unknown low cost provider and a world-class company like those listed above is just a few dollars per user per month.  You will also find the level of service provided and the protection of your data with the three industry leaders is far superior to the lower cost, “new to the market” solution providers.