On-demand Applications: a quick primer
If you spend any time at Salesforce.com’s website you’ll quickly realize that “on-demand” is their favoite adjective when describing their CRM system. What do they mean when they say “on-demand”, and is that a good thing for CRM?
First, some history.
Long ago, software applications ran primarily on computers the size of a Volkswagen, in the basement of some university. You could use that software only by sitting next to that VW. As computing got more popular, the line outside that basement was getting quite long. Terminals were invented so you could access that computer from elsewhere. These terminals were really not much more than a screen and keyboard, and could only connect to the big computer. You didn’t have to wait in line outside the basement anymore, but had to rely on that central computer.
Then personal comupters (PCs) came along. You could have a computer on your desk, and run software on it. Revolutionary. The effects were manifold. There was an explosion of access to computing power which grew hand in hand with an explosion of software to be run on those PCs. More PCs brought about more applications which made the PCs more useful–a clasic postitive feedback loop.
Another massive impact of all these new PCs was an exponential increase of system administration duties. In just a few decades, we went from a handful of computers requiring installation, maintainance, software installs, and upgrading, to millions of PCs requiring the exact same things. The world was drowning in system administration tasks.
With the maturing of the Internet, on-demand applications became a way to deal with that systems administration overhead that was slowly eroding our will to live. Applications could be housed centrally, and accessed by browsers, which were relative simple pieces of software. All system administration tasks could be handled by the smart geeks in the central location, freeing up end users to do the work they are actually paid for. Any similarity of this model to the old VW computing model is purely coincidental, I assure you.
Salesforce.com brought this new (old) model to CRM, and is the current leader at it. They’ve got 15,000 companies who’ve bought in to on-demand CRM. Will it work for you? Let’s quickly go over the rewards and risks of on-demand for CRM:
Rewards of on-demand applications
- You CRM software is available from anywhere the Internet reaches: your office, Bangladesh, your PDA, and you local public library.
- No need to buy a server, maintain a server, find someone with the skills to tell you what a server is.
- Upgrades just happen. The software gets better without you having to worry about it.
- Backups and worries about power going out are someone elses headache.
- Total cost of ownership is often less than installing software on your computer.
Risks of on-demand applications
- Your sensitive data lives in a data center somewhere. You may not even be sure if it’s in California or Virginia.
- In our infinite American wisdom, we have the USA PATRIOT Act which can compel hosters of on-demand applications to give your sensitive data to our government
- You have to trust the hoster of the on-demand application to correctly handle your data, backups, and upgrades. If they screw that stuff up, it could be really bad.
- If the Internet isn’t available, your data isn’t either.
- It’s like your phone service–if you stop paying your bill, they cut your line.
- If the company goes away (i.e. bankruptcy, earthquake) you have to go find a new one. And quick.
On-demand applications is on the rise, and is a very interesting model. If you’re considering using on-demand applications, you should carefully think about them and determine if the rewards outweigh the risks for you. Salesforce.com leverages the on-demand model for CRM and does it better than anyone I’ve seen (and there are plenty of others out there). You too can leverage the new power of CRM in the on-demand model if you think the rewards outweigh the risks.
