In some cases, hosted apps may be cheaper than implementing a packaged CRM application internally. A recent Dataquest report indicates that hosted services will emerge as the dominant delivery model for CRM applications among emerging and midsize companies by 2001. Trusting an outside firm with precious customer data, including new sales leads, customers' buying patterns, and contract information, is a concern for many businesses, large and small. As ASPs land more deals and educate businesses about security and bandwidth issues, they'll have an easier time selling integrated ERP and CRM offerings, says Asha May, an analyst at Dataquest. They don't want to go to several different companies to receive a complete offering.
Some users remain skeptical.
Vern Snider, executive VP of corporate development at REZsolutions Inc., a Phoenix provider of reservation services to the hospitality industry, says he would never outsource his company's CRM applications. I couldn't risk losing information about hotels we deal with to another company or to a system failure. Snider says he's less concerned about back-office data. REZsolutions uses eOnline to host its SAP financial and human-resource applications. With CRM, I'd have to spring for my own server because the data is too sensitive.