Can traditional client/server CRM systems operate in an on-demand CRM software delivery model?

Thin-Client vs. Client/Server On-Demand CRM Software Executive Summary

It's no secret that the heavyweight client/server Customer Relationship Management (CRM) software publishers, including Siebel and Oracle, initially made multiple attempts to protect their turf, chastised the on-demand business model and attempted to link on-demand CRM applications to FUD (fear, uncertainty and doubt). History also shows that once they figured out they couldn't beat the Software-as-a-Service (SaaS) model, they chose to join it - at least in part.

Because of the great popularity and success of the historical client/server CRM applications, the on-demand hosting market is experiencing SaaS CRM solutions from two platform sources; Web-native thin client CRM solutions and traditional client/server CRM systems.

The overall conclusions of the thin-client vs. client/server CRM software systems are as follows:

1. Most respondents did not feel that the two platform solutions will each have a place in the market or would live harmoniously together. Instead, there was a strong feeling that the client/server manufacturers were simply 'force fitting' their software products into a new delivery model - either to supplement their traditional revenue stream or to act as a stepping stone until they ultimately get to a more hosting friendly technology.

2. Respondents using client/server CRM systems in a hosted model cited increased hardware, software and IT labor costs as compared to thin-client CRM systems. Specifically, client/server respondents felt that to achieve acceptable hosted delivery, they were forced to procure more hardware (web server farms and database clusters), more bandwidth and complimentary software products (Citrix) simply due to the non-Web-native architecture. Further, the client/server products incurred some common shortcomings, including limited performance over the Web and certain functionality deficiencies (printing problems were mentioned multiple times).

3. Lastly, while respondents were fairly negative toward client/server CRM products in a hosted delivery model, they did believe that most of those software publishers would ultimately get to the SaaS model with Web-native CRM applications.

Several respondents commented that client/server CRM solutions offered as a hosted delivery is nothing more than a marketing ploy or an attempt to get into a sales cycle and ultimately steer the prospect toward traditional client/server products. One survey respondent reminded us of a quote that has been applied to the software industry many times over:

"Force fitting a client/server CRM product into a hosted model is like putting lipstick on a pig.
The front end looks a bit better, but it's still a pig."

Multiple survey responses cited Microsoft CRM as a tell tale or indication of what may be coming. MS CRM has been unofficially available as a hosted solution from multiple ASP's for more than three years, yet the adoption rate for MS CRM as a hosted solution has been nearly zero. With the MS CRM version 3 release, Microsoft looks to capitalize on the SaaS platform opportunity. However, the push seems to be far more marketing oriented than Web-native technology capable. Microsoft's success or lack thereof with this initiative may either prove the majority of survey respondents wrong or demonstrate that traditional client/server products can coexist with Web-native solutions in a growing market.