Hosted CRM Moves to the Mainstream

According to a recently released Beagle Research Group study, the demand for hosted CRM has exploded over the past 12 months, and mainstream users are now adopting these solutions. "Changing Leadership? Hosted CRM's Continuing Evolution," focuses on why the purchase of online CRM solutions has shifted from the early adopters to the mainstream audience. Online CRM offerings started popping up more than four years ago, but it wasn't until early 2003 that the market really started to take off, according to Denis Pombriant, managing principal of Beagle Research. At that time market research firm Aberdeen Group stated that more than 85 percent of organizations considering CRM were looking at hosted solutions. "Mainstream organizations were waiting until the technology was proven," Pombriant says. "They didn't need to rush out and buy a CRM solution, they waited for prices to come down and markets to open up." Thirty percent of the study's respondents are already using hosted-CRM solutions, and about 57 percent of those not using a hosted solution say they would consider it. The research also indicates that mainstream buyers are slower to buy and more likely to see the downside of hosted CRM. However, the report states that "These two conservative indicators are more typical of mainstream buyers than of early adopters." What sets these mainstream users apart from early adopters is that they are more demanding about additional features and functionality, and evaluate hosted solutions on equal footing with their traditional CRM counterparts, according to Pombriant. The report says also that previous fears associated with hosted solutions have been minimize through security capabilities like firewalls, thus making users even more comfortable about having data hosted off site. For the industry the results of the report mean two things: Users are likely to have a variety of choice, whether it be hosted or nonhosted-CRM solutions, and, offerings are likely to become more robust as users push for more features and functions from online CRM. In the past, according to Pombriant, users were willing to trade some aspects of customization for configuration-only systems. Today, customization and integration are top priorities for users of hosted CRM.