MarketView: Playing Host

The belief that the SME market is wedded to software ownership of technology is based on a false premise, argues Michaela Alexander, CRM manager, Microsoft Business Solutions . Ownership was important for a world of fixed input devices, single databases and deskbound telephone salespeople.

The advent of the utility or on demand technology model means that it is the data not the host that takes precedence. And no-one is saying that the SME market won’t take advantage of the shift to utility computing.

This success of the utility computing model will rely upon accessibility, reliability and scalability. This reflects the reality that given the choice SME users would happily trade software ownership for ease of deployment, integration, interoperability, security and use such as those offered by hosted CRM services. This is not the result of a recent epiphany by the suppliers or by the market. Application hosting, especially in the SME sector has long been recognised as a major trend.

Hosted CRM services is a fast growing sector with Forrester research recently saying that while it will be some time before it catches up, hosted CRM license revenue will outpace traditional CRM revenue over the next four years.

Much of this growth will come from the SME sector. This is because hosted CRM offers companies with no a history of infrastructure investments the opportunities to support and service customers in a manner indistinguishable from larger rivals.

Hosted CRM is a mere part of the shift to greater use of XML web services, an idea whose time is coming, and Microsoft’s position in this world of XML web services is to be part of a greater ecosystem.

For years it has been said that web services will be used to collect data across different applications and platforms from fixed and mobile locations through different devices. And it is not the collection devices (PDAs, notebook or tablet PCs, desktop PCs) that have precluded SMEs from collecting and using that data, but the investment needed in database management that have kept SMEs out.

Other factors have also discouraged SMEs from adopting CRM to date. Not least of these is the bad press CRM projects have received but more importantly are the business process and data integration issues that have to be considered. But that does not mean that SMEs have not had business critical information.

There is not some critical mass that must be reached before business information becomes critical It is the source, not the amount, of the information which determines its criticality and the importance to a business of the ability to exploit it.

So what are the key advantages of hosted solutions to the SME sector? Hosted CRM offers security, and systems and data management to a market that traditionally could not afford them. It offers a level playing field: And hosted CRM avoids many of the pitfalls associated with traditional CRM.

The traditional model of trickle down technology is fading. Once there was a time when large companies bought large systems from large suppliers. Then those suppliers modularized their software offerings and began looking for broader markets populated by smaller players. Nowadays web services such as hosted CRM mean that SME companies which traditionally clung to the technology coattails of their larger rivals are no longer the poor relation.

Hosted CRM does not mean that one size fits all or that it is a panacea delivering the ability for everyone to sell everything to everyone else. But it does mean that relevant information flow is no longer the preserve of large the corporate. In short hosted CRM means that no longer does size determine service.


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