CRM as a hosted service

CUSTOMER relationship management applications bring new levels of sales, customer service and overall profitability to businesses of all sizes. However, many businesses find it difficult to justify the upfront investment in such applications or lack available in-house technical resources.

CUSTOMER relationship management applications bring new levels of sales, customer service and overall profitability to businesses of all sizes. However, many businesses find it difficult to justify the upfront investment in such applications or lack available in-house technical resources.

For these organizations, deploying customer relationship management (CRM) as a hosted service is a cost-effective alternative. It enables them to take advantage of sophisticated customer acquisition and retention tools that can help build their business, without a significant upfront capital investment.

To drive the deployment of CRM as a hosted service, big SW players on the market with CRM solutions recently introduced CRM into the commercial licensing model.

This model was created to provide a licensing solution for service providers who provide software as a service. Software as a Service is where users access software products running in one or more data centres, on a rental, subscription or service basis, through the Internet or a private network that is being operated/managed by a service provider. These license models are designed for all software services providers.

Some examples of software services providers include web hosters, application services providers, messaging and/or collaboration services providers, platform infrastructure providers, business process outsourcers, streaming media service providers and ISVs with hosted applications running on SW technologies.

This commercial license provides third party commercial use rights to service providers, who will be the holder of these licenses, and the end customers receiving the software service are not required to obtain their own SW licenses. End customers receive the right to interact with software functionalities through the service provider's licenses.

For key software players, the transformation to "Software as a Service" was substantial, and involved two key aspects: subscription pricing, and software that's stored remotely, or "hosted," rather than installed directly on a business' own servers.

Large software companies believe in offering a choice of licensing (licensing models: buying or financing or renting) and deployment models (on premise and/or hosted) to customers. The focus is on delivering innovative CRM technologies with a degree of adaptability.

Whether this is delivered on premise or as a hosted solution depends on the specific needs of the customer.

For some customers, the ability to buy the application upfront and then decide to deploy it in a hosted environment is the right choice. For some customers, the ability to finance the purchase over time and own the applications at the end is the right choice. For some customers, it will be the ability to pay on a subscription basis that is the right choice.

Hosted and rented CRM complete the line up of offerings that enable all of the above - complete flexibility providing access to different forms of licensing and deployment for the end customers.

The hosted CRM strategy is designed to offer benefits to all of the players in the ecosystem. CRM partners who manage the direct relationship with end customers, by entering into a relationship with a hosting service provider partner can expect to expand their business opportunities.

Software as a Service (SaaS) has increasingly become a valid option for end customers to gain access to the CRM functionality their businesses need. Simply by offering choice to end customers, partners can expect to increase customer satisfaction.

For those that choose to host their solution, they will experience the many benefits of outsourcing such as greater flexibility and reliability, access to a broader range of technologies, and fewer worries about running a data centre operation.

The hosted CRM concept relies on the network of service provider partners to offer customers CRM in a hosted environment. Many customers want access to a broad range of technology while minimizing the burden of managing it. Service Providers will be able to leverage CRM technology to give customers what they want.

There are multiple ways that partners might follow to go to market. However it is strongly recommended that the best way is for service providers, resellers and/or ISVs to partner with each other. This way, each one of them would be able to bring to the table what they do best.

By concentrating on their strengths and complementing each other, the partner ecosystem will be able to deliver to customers very strong and compelling offerings in the shortest time to market:

- Service providers. They are the infrastructure providers and can deploy in their data centres the necessary infrastructure to support a hosted CRM offering. They are also responsible for managing and supporting the environment on a day-to-day basis.

- Independent software vendors (ISV). These Partners can further extend the rich functionality of CRM to provide targeted vertical solutions that are very appealing for the end user. They expand the domain for the ecosystem and provide a clear differentiation.

- Value added reseller (VAR). They are in the market and have deep knowledge and expertise of CRM solution. They maintain a healthy pipeline of prospects and close sales. But most importantly, they are the consulting arm and they can deliver to the end Customer the necessary configuration and customization services to adapt the offering to the particular Customer needs.

Each one of them will bring their assets and expertise to create these compelling solutions for mutual customers with a rapid time to market.

Richard Šálek from hosting business development department, Microsoft Czech & Slovakia.

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