IT support was also a factor in Slusar’s decision. SunGard’s business is built on running data centers for other companies, but there is no centralized IT function for internal support. "We never really seriously considered an in-house solution for this. Our sales force spans the globe, and administratively it would have been a big headache to maintain the application and keep servers up and running with people coming online in Hong Kong and Chicago," Slusar says. In addition, she says, there was "no comparison in terms of pricing." Traditional software would have cost $18,000 per user over the course of a two-year license, and though Slusar will not reveal how much SunGard pays for the Salesforce.com systems each month, she says the cost is "magnitudes" lower, ranging between $1,560 to $3,000 per user over the same period (not including training and customization).

When On-Premise Is a Better Fit

At Qosina, a medical-components distributor, the basic business need was the same as SunGard’s: creating an enterprisewide snapshot of the sales pipeline. Yet this much smaller company—$25 million in revenue—chose an on-premise offering in large part because of the complexity of its business processes, according to Chief Operating Officer Gerry Quinn.

The company had been using an old flat-file, DOS-based contact manager called Telemagic for years and, in 2003, was ready to replace it with a more modern, robust CRM package. Qosina, which markets its products (such as tubing, clamps and valves) through trade shows, catalogs and websites, has an inordinately long sales cycle as the components it sells are eventually incorporated into products developed in the medical and cosmetics industry. To encourage the purchase of its products, Qosina sends out samples of its 5,000 products (some costing less than a penny a piece) at an average rate of 300 to 500 a day and up to 1,000 a day after a successful trade show. For example, Qosina may provide samples during a customer’s R&D process, and only when the customer’s product is approved for production will Qosina make its big sale. Quinn wanted a dynamic tool to support the company’s atypical marketing and sales process. "Our processes, while not totally unique, weren’t anything that could be supported with an out-of-the-box package," he says.

Quinn looked into customizing a hosted solution to accommodate the company’s elongated sales cycle, but ultimately rejected the idea because the company already had the technology infrastructure in-house to support an on-premise system (Qosina has hosted its own website for 10 years). Quinn also wanted to retain power over the application and the data in it.