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Cloud CRM to Overtake Installed by 2013, Study Finds

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December 21, 2011

Cloud CRM to Overtake Installed by 2013, Study Finds

By David Sims, TMCnet Contributing Editor

If you’ve noticed quite the preponderance of software-as-a-service (SaaS (News - Alert)) CRM products floating around recently, well, congratulations. There are a whole lot more of them. You have excellent powers of observation.

Yes, SaaS is gaining in popularity, thanks to its flexibility and cost effectiveness. Industry observer Douglas Bonderud noted recently that while “this is good news for small and medium-sized business owners looking to break into the SaaS CRM market,” others aren’t so impressed -- Oracle CEO Larry Ellison (News - Alert), for one.

Bonderud points to a recent study from AMI-Partners finding that the market for small and medium-sized business CRM will “change significantly” between now and 2015.  On-premise CRM spending will remain constant, it concludes, but SaaS CRM spending “is set to see double-digit percentage growth each year until 2015 and surpass the amount spent on traditional CRM options overall in the middle of 2013.”

In short, we’re going to see quite an industry shift in balance of power. Hey, SaaS just has lower total cost of ownership, which SMBs like, as Bonderud writes, adding that social media integration in many SaaS CRM platforms “provides businesses with faster connection to customers.”

So what’s bothering Larry Ellison? Certainly it can’t be any religious opposition to SaaS CRM itself, as TMC (News - Alert) had the news in October that Oracle launched what company officials were gushing was “the world's most advanced CRM in the cloud,” unveiling the public cloud offering of Oracle (News - Alert) Fusion Customer Relationship Management (CRM).

As Bonderud details, Michael Neubarth of Business2Community’s research brings up the fact that Oracle CEO Larry Ellison has been “disparaging” about SaaS providers for years now, sniping at their profitability and pronouncing himself unimpressed with, calling them "the Roach Motel of cloud services,” no doubt much to Marc Benioff’s (News - Alert) amusement.

Of course, Ellison’s Oracle has the Public Cloud, its own SaaS services vendor dealing with Oracle's cloud-based Fusion CRM, which Benioff has derided as “ConFusion CRM.”

As a friend in venture capital said to this reporter recently, though, his bet is that Ellison and Benioff get together and laugh about it all.

David Sims is a contributing editor for TMCnet. To read more of David’s articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Juliana Kenny
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