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   Hosted CRM – an emerging paradigm in customer relation management

(By -Geetanjali Saxena)

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 Hosted CRM offerings started to appear more than four years ago, but in last one year the market for hosted CRM have really taken off. According to a recently released Beagle Research Group study, the demand for hosted CRM has exploded over the past 12 months, and mainstream users are now adopting these solutions. However, the latest Beagle Research survey on hosted CRM found that a nearly equal number of respondents opposed and embraced the concept of hosted CRM. Hosted CRM market in 2005 is expected to be $724.5 million in 2005. That's a slim percentage of the $27.8 billion in total CRM spending that Aberdeen forecasts for 2005, with $7.7 billion spent on applications and the rest coming from integration services and related hardware. Forrester Research predicts that the percentage of overall CRM revenues coming from hosted applications will stand at 13 percent by 2005, up from 7 percent in 2002. Gartner Inc. estimates that by 2009, 33 percent of all small to medium businesses (SMBs) will have chosen a hosted model.  

When hosted offerings first came on the market, they were considered ideal for SMBs.  But in the recent years vendors of hosted offerings are increasingly able to offer more areas of customization, and changes can typically be implemented by a business administrator taking advantage of various offerings’ built-in wizards, tools and configuration options. So, not only SMBs but also many large companies like Hewlett-Packard, Xerox, Sanmina-SCI, AOL Time Warner and Fujitsu Computer Products of America are among those with units relying on a hosted CRM service. 

Initially ASPs (application service providers), Salesfoce.com and UpShot were the leading players in the emerging market of hosted CRM. Siebel validated the ASP model by acquiring UpShot. The success of the ASPs has prompted nearly every CRM vendor, including those with products targeted at the market's high end, to make available hosted versions of their software, often through partnerships with channel resellers. KANA has jumped into the hosted CRM badwagon with the release of an on-demand variant of KANA Response Live. RightNow Technologies - RightNow 7.0 is available in both hosted and on-site versions. Entellium offers Entellium eSalesForce and Entellium eCustomerCenter, its sales and customer service products, respectively, as well as MyEntellium, a business intelligence and team collaboration portal. The products are available as individual modules or integrated suite. PeopleSoft provides, PeopleSoft Enterprise One and PeopleSoft World - through hosted-services. Both products offer CRM, supply chain, financials and human-capital management. Microsoft doesn't have a hosted CRM offering of its own but does offer the service via some 90 certified partners.  Microsoft CRM doesn't require a client-side installation, said Alex Simons, who leads the Microsoft CRM product team. Customers can run a copy of it on a server and configure it to be accessed by end users either through Microsoft Outlook, or through a Web browser.  (contd.)

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