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Cloud CRM Is Good, But There Are Downsides As Well

Cloud CRM Is Good, But There Are Downsides As Well

Cloud CRM has become the latest trend in the enterprise software industry. Since its introduction in the 90s, CRM software has grown to become a formidable business tool for modern enterprises. But till the introduction of cloud-based contact management solution it was considered an application suitable only in large organizational environment.

High cost of implementation of legacy applications kept on-premise CRM beyond the reach of small and medium businesses. Introduction of cloud and the growing practice of delivering software over the internet have made software deployment cheaper and available for mass adoption. Cloud CRM solutions have become particularly popular with small and mid-sized companies that can’t afford the huge upfront payment required for implementing legacy applications.

SaaS CRM solutions are subscription based, which doesn’t require the user to buy license from the proprietor. Moreover, those are delivered over the internet and require no extensive hardware and networking infrastructure at the user end. In a word, SaaS solutions are cost saving, which have made it particularly popular with enterprises as it has allowed them to gain economic advantage in this resources strapped economic condition.

The vendor creates the software and hosts it on the cloud which is a shared, multi-tenant platform. It is then made available to large number of users over the internet. These economies of scale played the greatest role in helping SaaS solutions penetrating the market which so far had been monopolized by large proprietary vendors. Since SaaS solutions are provision based users are often allowed to test drive the free CRM systems for a period before buying it.

The positive features of SaaS CRM solutions are:

  • Low entry cost
  • Free trial period
  • No hardware or software requirement
  • Easy pay-as-you-go options
  • Monthly subscription based
  • Easy cancellation; no vendor lock-in


Apart from the cost benefits, cloud-based CRM solutions offer additional operational advantages too. Cloud has made it possible to access data from anywhere. If the user has a connection and a web browser he can access the data stored in cloud on any device. It has also eliminated the time required in deploying a software to client location. Once the user agrees to the terms and conditions forwarded by the vendor the account is created, which he can start using immediately.

Since the software is hosted, managed and maintained by the vendor users don’t have to worry anymore about software patch-up. Upgrades and updates are regular as the vendor keeps publishing latest versions of the application to ensure that user always benefits from newest advancements.

We can summarize the advantages of online CRM solutions as:

  • Anywhere accessibility of data
  • No software patch-up worries
  • Reduced dependency on IT
  • Easy customizability
  • Easy integration with other apps in enterprise suite
  • Faster deployment
  • Scalable solution


Despite the number of positives offered by online CRM software there are certain disadvantages too which the users need to keep in mind while shopping for customer management solution. We have listed them as below:

  • Cost: SaaS solutions are subscription based. Though the initial cost of acquiring the software is nil but over a period of 5 to 10 years time the total cost of ownership (TCO) for the online solution may eliminate the initial benefits.
  • Downtime: The biggest challenge that cloud needs to deal with is outage. You need to consider your options if vendor system goes down.
  • Internet connection: Performance of a SaaS application depends on internet connectivity. You may not get optimum performance if you are residing on remote locations where internet connectivity is poor.
  • Data security: As your data would be stored outside your in-house server in a third-party cloud environment concerns over data security is natural. But online CRM solutions providers are increasingly meeting the industry standard and data security compliances making it less of a worry. The data is stored in encrypted format in cloud and the decryption keys are stored separately where those can only be accessed by authorized users.
  • Backup and data restoration: In absence of an effective data backup plan you may run the risk of losing your data at the time of outage. Make sure that your vendor offers efficient data backup and resilient data restoration solutions.

Ready to Start Shopping?

Whether you’re interested in a cloud or on-premise CRM solution, has you covered. Browse SaaS solutions in our free Top 15 Cloud CRM Software comparison report, or review in-house platforms in our Top 10 On-Premise CRM Software report.

  • Vendor

Manash Chaudhuri

CEO, Corelynx, Inc.
Specialized in Cloud computing and CRM customization
Manash is the CEO of Corelynx Inc., a Cloud based Enterprise Software Product Development and Services Company. He is actively involved in next generation Mobile technologies and bringing solutions to Cloud Computing Architecture. Prior to that, Manash worked as Principal ...