A response to “10 key issues that On Demand CRM systems won’t tell you about”

As I opened my email this morning, I clicked as I do everyday on my Google Alerts email regarding Salesforce.com. When I did, I saw an article by Peter Thomas entitled “10 key issues that On Demand (SaaS) CRM systems won’t tell you”. In the article, Mr. Thomas outlines 10 supposed issues SaaS companies try to hide from you. As I have worked with CRM for over a decade now, and with Salesforce.com for 3 years, I have heard these all before. However, today I feel like responding. You may want to read the original as I do not quote his original point in every one of my counters.

1. Yes, Salesforce.com is a subscription based model, which lasts for the contract period you sign. And, for the price per license of an on-premise application (over a year) you are typically spending a similar amount. However, most on-premise models also have annual subscriptions, which allow you access to the latest versions, support and in some cases even hotfixes for the application of your choice. These subscription costs typically run anywhere from 15 to 25 percent. Add on to this the software, licensing, and setup costs for the required servers (Windows Server, SQL Server, IIS, SharePoint for partner collaboration, etc.) and you have a truer sense of your CRM hardware requirements with an on-premise solution. With Salesforce.com, you need a computer and a browser – that’s it.

2. You say customization is not as great, and when possible is as expensive if not more. I would highly disagree – customization native to Salesforce.com is in most cases point and click – you no longer need a VB or a .net developer to be on site (or outsourced) to change the look and feel of the application. You don’t need a database administrator to create custom tables and fields in a database. And in cases where you wish to completely change the look and feel, Salesforce.com has Visualforce and Apex – Visualforce being a markup style language which is moderately easy to learn even for non-programmers (such as myself) and Apex being a truer programming language (similar to Java) which allows for some serious programming to customize your business process.

3. I’m not even sure how to answer this “issue”. Every CRM company has solutions partners across the globe to assist clients with implementation, customization, support and training. I own a company that does this for Salesforce.com in Canada, and you work for a company that does this for Microsoft and Sage in the US. A CRM company’s partner ecosystem is one aspect of how they are rated. All prospective clients for a CRM solution should take the time to look at partners (for Salesforce.com, they are listed and rated by previous clients at www.salesforce.com/partners) and ensure they find a partner that fits. One beautiful point about on-demand consulting I will share is remote consulting. I have had clients I only met and conversed with over the Internet (and finally met in person at Dreamforce) as there are no required visits to their IT closet. No software minimizes the need for travel, lowering consultancy fees. Combine this without the weeks of planning and installing software on servers, clients and such, and you are left with a simple fact – SaaS implementations cost less than on-premise applications.

4. I have worked with Microsoft, Goldmine, Sage and SuperOffice CRM (holding certifications with all) in the past, and have seen price sheets (and been on the selling side) for all, including Salesforce.com. SaaS applications such as Salesforce.com are not the only CRM which have extra costs for add-on functions, or versions broken out for typical styles of users. As an example, in my experience with most on-premise applications, licenses for a mobile edition of the application was available at an extra cost. And for MS CRM, you could download a mobile client, but a free application existed for Windows Mobile devices only.

5. SaaS development/test environments do exist, and yes we refer to them as sandboxes. You do have to pay for these with the Pro edition of Salesforce.com, get one test environment in Enterprise and unlimited in the Unlimited edition of Salesforce.com. I also agree with on-premise, you can install the CRM application for development (I suggest all users of on-premise CRM read their licenses to ensure that they are legally doing so, especially if using more than one instance). Once again, however, the associated costs of testing are not shown in your article. Setting up clients to attach to the test environment, managing the installation and management of multiple instances, and having another critical application to be concerned with, not to mention remote access to the test environment all have associated costs. With Salesforce.com, you receive a new URL and an append to your username and password. All with six clicks of the mouse by a Salesforce.com administrator, anywhere from a 10 to 30 minute time period before the sandbox is finished, and you are ready to test or develop.

6. I am not a programmer. I run away from programming like a 7 year old from homework, and I have successfully integrated Salesforce.com with financial applications, ERPs, and other databases which were on-premise at a client site. Your point on integration being harder or more expensive is absolutely, horrendously wrong.

7. Salesforce.com hasn’t always been available. You are right, and I think we have all read about the 45 minute outage users experienced last month. Let’s be honest though, can you imagine if the same coverage occurred every time an in house system caused a major outage in email, CRM or data access? Newsfeeds would flood with information! And as we are being honest, did my client care if 51,000 clients, and 1 million users lost access at 3 pm for 45 minutes? No – they did not. They cared that 1 client lost access…them. As one client said to me though – “ah, it’s not too bad – you should be here for our monthly Exchange crisis!” I do not have the numbers for Salesforce system availability for last year, but as a user, I can not remember a time where full access was lost except for that fateful day last month. I would put the availability of Salesforce.com up against the availability of the systems at any company I have ever worked for as an employee or consultant any day.

8. No IT! Yes, you are right – there is no IT requirement for Salesforce, until you wish to bring them in. The native application is easy enough to manage (after training) that a techno-suave business user can administer it. Most of my clients are this way. No IT lord thrashing at the bit with regards to database management, or time wasted setting up a new user. Until IT needs to play a part in extension through development, integration or such, they can forget about Salesforce.com and worry about those systems I spoke of in point 7.

9. Trying out an application is simple. And it has been a mainstay of application sales even before SaaS models. Microsoft and Sage offer the same on their website. And it allows the customer to make a knowledgeable, sound decision on which application is right for them. Although, the 30 day on-premise trials usually require the help of the IT staff to install on servers, it is a good idea to ensure you have all the backoffice requirements. And yes, moving CRMs is a costly experience. The tryout assists with some of those concerns; so that you don’t have to do it again due to poor choices in vendor. I also recommend prospects talk to a partner(s) of the applications to get another view on the program, as well as implementation costs.

10. You are correct – contracts are hard to get out of. Not just with Salesforce.com, but with almost every contract, I believe.  I remember when I worked as the IT manager of a start up firm which was closing its doors. Getting out of subscription contracts for our hardware (Cisco, Dell) and software (Microsoft Open Volume L&SA, which was a 2 year annually paid software assurance plan for their software…which sounds very familiar to me right now) was like pulling teeth. And I never recommend to any user of CRM, whether it be on-premise or SaaS that you continue with an application without their support and maintenance subscriptions.

Well, that was long…sorry for the length. There just has been an increase in the amount of “SaaS is evil” threads I have read in the last month, and I felt it important to add my rebuttal to this one.

Enjoy the day, all…

Nik