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Cloud vs. On-Premise CRM: Defining the Basics and Framing the Discussion

By June 22, 2016April 12th, 2023No Comments

Defining the Basics and Framing the DiscussionA critical step in making the move to an enterprise-wide CRM deployment is the initial planning and evaluation stage—reviewing the software solutions on the market and mapping their features and capabilities to the specific end goals each organization hopes to accomplish with cleaner and more organized customer data. Yet, with so many models on the market today, it can be difficult to distinguish exactly which is the “best fit,” and between industry buzzwords and technology acronyms, simply decoding the jargon can be one of the more challenging aspects of getting started. This is especially true when deciding between a cloud-based or on-premise CRM deployment, and while our discussion on the advantages and drawbacks of each solution will follow in subsequent blogs, it’s helpful to start at the beginning with a “primer on the basics”—an overview of the top terms in this space—to help frame the discourse and provide a basic understanding against which a more complex analysis can be accomplished. To this end, let’s take a look at some key terms that define the cloud vs. on-premise CRM conversation:

Cloud Computing Service and Deployment Models: Options for Infrastructure Support

Cloud-based applications are designed to fit industries of varying size, industry, security parameters, resources, and growth projections. By far the most familiar cloud-based model to most businesses and users is the Software as a Service (Saas) model, where software and databases are housed remotely in the cloud, accessible to users via any of a wide range of web-based devices, unlike on-premise systems, which are stored and accessed locally. Other models include Platform as a Service (PaaS), which allows users access to a cloud-based platform on which they can develop, run, and manage custom software without the typical costs of building and maintaining an in-house infrastructure, as well as Infrastructure as a Service (IaaS), in which users essentially “rent” the physical or virtual hardware and resources they need from a third-party provider, utilizing remote access points to support and run applications.

When considering cloud-based CRM, it’s also important to understand the different options around cloud hosting deployment models, including Public, Private, Community and Hybrid Cloud. In a Public Cloud model, a third-party provider delivers cloud services to a variety of unrelated clients in a shared environment, as opposed to the Community Cloud model, in which infrastructure is shared among “communities” of similar organizations. Conversely, services provided on a Private Cloud are accessed and used by only one organization, though they can be managed internally or externally to the organization as required. Sometimes, it can be helpful for an organization to devices a custom blend of these deployment models, taking advantage of the aspects of two or more of them that best fit their end goals and objectives, and when this happens, a Hybrid Cloud model is defined.

On-Premise CRM: Basics of the In-House Standard

On-premise CRM software models are based on an in-house infrastructure in which nearly all data is stored, maintained, and (primarily) accessed via on-site systems and software. In this environment, existing, company-controlled server hardware and infrastructure runs and manages the required licensed copies of an application, allowing in-house IT resources to maintain hands-on access to and oversight of all systems. In addition to being generally simpler and more straightforward to deploy than the variety of options available under cloud-based scenarios, other benefits of on-premise CRM software include:

  • Precisely timed and executed Service Level Agreements (SLA)
  • Risk reduction, as data is more likely to be highly accessible to users or administrators, and is less likely to be compromised due to external factors
  • Lower levels of latency
  • Simpler, more organic integration with other enterprise solutions
  • Increased customization capabilities

Weighing the Options: Chief Considerations for a Sustainable Solution

Understanding the basic differences between on-premise and cloud-based CRM can help companies make a more informed decision on the type of model best aligned with their corporate goals. In addition to determining infrastructure specifics, other chief concerns include IT resource availability, the degree of security and data control desired, and the amount of physical space available (especially important for on-premise deployments). Over the next three blogs, we’ll take a deeper look at these considerations and more, helping to cut through the trends, terms, and confusion surrounding the myriad options—and creating a clear path toward business success.


“Points to Investing in On-Premise or Cloud,” OSF Global Services, pp. 2, 4-5.