Jason Nash, Microsoft Business Solutions: The best of both worlds

Should you opt for on-demand or on-premise solutions? Jason Nash outlines the pros and cons for each option that organisations must consider before making their decision - and explains why a hybrid option may be the most beneficial way forward.

Jason Nash, Microsoft Business Solutions

Traditionally, all data was held on the PC, then it became centralised in the mainframe, then Sun came up with network workstations and everything was going to be delivered through servers. Now, we appear to be going through a ‘hosting phase’, where the web is the delivery platform for a variety of services.

This move from the mainframe to the web will likely evolve to the point where we’ll have software running locally on people’s machines (on-premise), and running out the cloud (on-demand). This will provide a richer user experience as well as giving businesses the flexibility to access data anywhere and anytime. Having the choice between the two models is enormously beneficial as each method brings its own unique advantages and businesses can effectively benefit from the best of both worlds.

On-demand

The credit crunch has certainly had an impact on the choice between these two models. Businesses are finding it both cheaper and easier to provision a software service on an operational budget rather than a capital one; meaning the business can run the service on a ‘per user, per month’ fee. This is preferable to on-premise software deployment, which usually requires a larger financial investment.

An additional advantage is that with on-demand, businesses do not have to worry about the procurement of administration of the system, i.e. buying the server, examining the architecture and installing the server. All of these system management processes are outsourced, allowing the business to get the system running in days rather than weeks.

There are however, certain drawbacks to this method. On-demand places your data in the hands of a third party, giving them control of your critical business data. It is also difficult to integrate to in-house applications if they are running on older systems.

This is more beneficial for smaller businesses where they may not have their own IT staff to run a system as important as CRM. It is far better to have that run remotely by a third party instead of bearing the cost of employing another individual to solely run IT.

On-premise

As opposed to on-demand, where the software licences are effectively leased for a period of time, businesses buy and immediately own the licence and software when installed internally on the its premises. This is an upfront capital investment for the whole lifecycle of the system; particularly beneficial if the system will be in place for more than five years.

With an on-premise system in place, a business is in control of all their critical business data. As it is physically located on the businesses’ site, accessibility to the required data is never a problem, as opposed to on-demand where remote connectivity might be an issue.

Despite the complete ownership of the software licence, there is a disadvantage as companies have to sacrifice a lot of capital to commit to the purchase of the software. This approach is better suited to larger businesses that have significant investments in legacy systems and integration is a critical part of their CRM process.

Having the choice and adopting a hybrid approach to CRM is preferable and more beneficial. The software as a service delivery model has matured to the extent that there is now an on-demand component to most software applications, whether it is online help, automated updates or the main application engine. The need to link with on-premise components extends beyond the desktop to legacy software maintained internally. At the same time, many vendors are realising that to provide a satisfactory end user experience, total reliance on a web browser is not always enough and a desktop component is often needed.

The beauty of Microsoft’s approach is that they allow these businesses to choose a model. If a business wanted to start a project quickly within a hosted environment, it can work with you to get that project up and running through its rich partner ecosystem (100+ in the UK alone). If at a later date you decide to bring this on-premise, Microsoft can support the deployment and implementation of the solution. With most of the other vendors, if you don’t like the service levels or level of deployment, you are stuck with the incumbent, e.g. Salesforce.

Jason Nash is Dynamics CRM product manager at Microsoft Business Solutions.

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