One of the decisions you will have to make when evaluating a CRM solution is whether you want to deploy the software on your servers at your location (on-premise) or access it from the vendor’s site via the internet.  If you select the latter, you will encounter terms such as cloud, hosting and SaaS that will describe the deployment and are often used interchangeably. This article will explore the benefits and drawbacks of hosting vs cloud crm.  Let’s try to explain them in simple and brief terms.

Cloud Computing

Simply put, cloud computing is the delivery of computing services—servers, storage, databases, networking, software, analytics, and more—over the Internet (“the cloud”).  One of the most common uses (services) of cloud computing is to provide access to software applications such as CRM.  Why would you choose to use the cloud for your CRM application?

  • Upfront Cost – Cloud computing eliminates the capital expense of buying hardware and software and setting up and running on-site data centers
  • Speed – Most cloud computing services are on demand.
  • Flexibility & Scalability – Being able to deliver more or less computing power, storage, and bandwidth—right when it’s needed.
  • Highly Automated – No longer do IT personnel need to worry about keeping software up to date
  • Reliability – Cloud computing makes data backup, disaster recovery, and business continuity easier and less expensive, because data can be mirrored at multiple redundant sites on the cloud provider’s network.

Clouds can be public, private (single company) or hybrid.  Public clouds are most common to application providers since they can host multiple companies.


There are three main categories of cloud computing: Software as a Service (SaaS), Infrastructure as a Service (IaaS) and Platform as a Service (PaaS).  Simply put, SaaS is a software delivery model where a third party provider hosts applications and makes them available to customers over the internet.  The software is licensed on a subscription basis and centrally hosted.  It is commonly referred to as “On-Demand Software”.

Hosted Services

Hosting services are classified as traditional or cloud-based.

Traditional Hosting Traditional hosting is mainly of two types (1) Shared hosting and (2) Dedicated hosting. In shared hosting, you share a server with many other websites and customers. In dedicated hosting, you own a complete server to yourself. It’s essentially buying a computer and having a hosting company manage it to ensure it stays up and running, and connected at all times.  One of the biggest drawbacks with traditional hosting are you need to purchase additional servers as the traffic to your website grows.
Cloud hosting has a set amount of dedicated bandwidth, CPU, RAM, and drive space, and the client has full control over the servers’ resources.  Cloud Hosted Service is delivered via the internet on a virtual partition which draws its resource, such as disk space, from an extensive network of underlying physical servers.

Cloud hosting offers a level of scalability that traditional hosting can’t. Cloud hosting companies provide virtual space on an on-demand, as-needed basis. Instead of paying for a set amount of space upfront on a single server, the user pays as they go for what they actually use.

Cloud Hosting is a very reliable, easily scalable and affordable hosting solution.

Cloud hosted services are essentially rent out the provider’s server farm (data centers) for customers to use on a per-needed basis as opposed to investing money into buying new servers. This is sort of like leasing a car or home (cloud hosting) instead of purchasing one (traditional hosting)…you never own it; you are renting it.