Rather than bore the living hell out of you with a long technical discourse on the differences between the varieties of on-premise software and on-demand services, let’s take a look at the basic definition of on-premise to start. By the way, technically, the actual term for this is “on-premises, ” not “on-premise.” I’m going to leave it as on-premise because, as wrong as this phrasing might be, it’s what most people already call it. I’m going to stand by it due to the Common Law Usage Rule, which says that even if it’s wrong but in common use, it’s right. By the way, I just made that up.
What Is It?
On-premise is the traditional model for software installation and administration that you probably already know something about. You license the software from a software vendor. You run an instance of the software or multiple instances at your site and store the data associated with that application on servers physically located at your site with your administration and your security. You control the data. You also hire someone to install and customize the software and then stick around to get that licensed software working, since the odds of you being able to do it yourself are about the same as the odds of the software vendors liking each other. Astronomical. Over roughly a threeyear period, you tweak the system, handle downtime yourself, and at the end of the three-year cycle, you upgrade the software to meet the requirements you’ve developed over that time.
This model has advantages for large enterprises in particular because it provides optimal control over your own feature/function/ process/data destiny and it scales better than the on-demand versions. This doesn’t mean that SaaS doesn’t scale. As we’ll see, it most certainly does. But most on-premise versions that scale are built specifically for the size of the enterprise that they were built for.
A complaint about on-premise that you often hear is that implementation can take months. While this is still true for the most part, there is some potential relief in sight. For example, late in 2008, I watched a demonstration by a Microsoft Certified Partner, AlfaPeople, which can provision an on-premise or on-demand Microsoft Dynamics CRM 4.0 system so that it is up and running in 10 minutes—without customization, of course. Even so, that indicates how incredibly quickly these systems can be set up. It actually took two seconds to install and provision a Microsoft Dynamics CRM system in the demonstration I saw. While long on-premise installations are hardly a thing of the past, there is progress toward the future.
Advantages and Disadvantages
These have been talked about so frequently in the technology press that it’s reached something of a blah blah blah status. I’m listing them here so you can start asking the questions you’re going to need to ask of vendors when the time comes for you to implement some sort of CRM technology. Table has a brief description of the advantages and disadvantages of on-premise purely on its own merits, not in comparison to SaaS.
While there is no need for me to highlight any one vendor in the onpremise world, there are several who have notable products. They are, in no particular order:
Needless to say, this is not an exhaustive list. It simply is meant to convey the news that on-premise is far from dead. In fact, Gartner Group, in a SaaS market study they released at the end of 2008, estimated that by 2011, SaaS will control roughly 25 percent of the market—which means on-premise will continue to control roughly three-fourths of it—so it’s hardly buried yet. So if you see it walking around, it’s not a zombie, it’s alive.
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