The CRM Software Guide

May 10, 2007

THU 10 MAY 2007

How to Calculate the Real Cost of SaaS CRM? 2 comments Tags: crm; crm roi; crm software; crm tco; hosted crm; on-demand cm; roi; salesboom.com; salesforce.com

 

How to Calculate the Real Cost of SaaS CRM?

Most on demand CRM vendors resort to using ROI calculations to prove that their Software-as-a-Service CRM solutions are a better and wiser choice than traditional in-house cousins. While I strongly believe that any company with less than 2000 employees should and must use an on-demand CRM solution versus a traditional one; I also believe that there are other hidden costs associated with on-demand CRM that most vendors either hide intentionally or make vague.

 

In my quest to uncover the hidden costs of SaaS CRM, I realized that many costs are almost either never found on the web site of the vendor, or just simply hard to find and buried away.

I investigated 3 different on-demand CRM providers namely: Salesforce.com, Netsuite and Salesboom.com. I also made this simple comparison based on the Enterprise Editions of these companies. By choosing this product offering you will get a complete CRM system encompassing Marketing Automation, Sales Force Automation, Customer Service & Support as well as in the case of Salesboom.com you will also enjoy back-office and accounting tools.

Hidden Costs of SaaS CRM

The on-demand model depends on per user pricing, and that is the actual cost most people associate with the product. The difficulty in this approach is it is unrealistic for many reasons. Almost most companies will depend on customizing the application to suite there business processes and that will cost time and money to the tunes of as much as %200 of the license fees. Another reason would be that companies can use less licenses than actually needed at any given time during the lifetime of the contract, which will not normally lead to a lower bill. Some companies will be required to purchase extra storage at a later date and believe me it is expensive as you will see in the comparison at the end of this post. If your company's critical processes require immediate support, then there are extra costs associated with premium support which is typically calculated as a percentage of the actual license fees.

Also, except for Salesboom.com, both other vendors will not permit your users to mix and match editions, and that alone can lead to huge increases in license fees and premium support as well.

If your company wishes to integrate the CRM product with other ERP or legacy systems, other fees are applicable (normally as an API yearly license fee).

 

 

At the end of the day, every company that considers on-demand CRM must understand the real costs associated and must ask the vendors first hand.

 

1) Salesforce.com:

Price Per User: $125/user/month

Extra Storage: $6144/year per GB

Included Storage: 1 GB

API license fees: $5000/year

Professional Services: $250/hour

Premium Support: %15 of annual license fees

Mix & Match Editions: No

2) Netsuite:

Price Per User: $99/user/month

Extra Storage: $1500/year per GB

Included Storage: 10 GB

API license fees: $7000/year

Professional Services: $225/hour

Premium Support: %22.5 of annual license fees

Mix & Match Editions: No

3) Salesboom.com:

Price Per User: $75/user/month

Extra Storage: $700/year per GB

Included Storage: 12 GB

API license fees: FREE

Professional Services: $150/hour

Premium Support: %15 of annual license fees

Mix & Match Editions: Yes