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I like to support the point that cloud-based CRMs are much more beneficial for SMEs than for big corporations. But I like to stress the subject "Security and Data Protection" which is much better organized for SMEs in the cloud than locally provided that the service provider is a reliable and trustworthy vendor. Such CSPs offer data protection which are in compliance even with German FDPA, one of the highest standards of security.
That the Data is Secure?

Way too often we find out about problems after they are exploited even in the best regulated systems.

For instance how do the German Regulations address Side Channels?

I'm betting they simply do not and will not till there is a Data Breach through this attack vector and then they will come out with some Regulations after the event.

Col
I tend to agree, Klaus. We run a cloud-based CRM and project management software called JobNimbus (http://www.jobnimbus.com) and have found that our feature set and solution is a perfect fit for SMB, but the enterprise customers are looking for higher security and data control.

We can't necessarily provide the level of security they are after, but we can certainly make sure our SMB customers are taken care of and that their data is safe and sound.
This is an interesting article that provides a good summary of the many concerns companies have in determining whether to move to a cloud CRM system or not. Small and medium-sized enterprises, however, have their own set of concerns when it comes to choosing whether to go with a cloud CRM solution or to stay with the on-premise model.

A simple cost-benefit analysis is always the first place to start when determining whether an on-premise or cloud solution is best for a company. Plus, for most SMEs, the scale and structure of the solution required must also be considered and the views of the teams who will use the system must be assessed. Talking to key users both individuals and departments is a vital step to understanding what the key concerns are among the people who will actually be employing the CRM solution. Companies can then use this information when talking to CRM providers to see whether these concerns can be addressed. For most SMEs, this very direct process helps in working out whether a cloud CRM solution is right for them.

Some of the key concerns that might be raised by SME users are highlighted in new research that is soon to be released by Maximizer Software. While reducing the up-front cost of implementing a CRM system is a key benefit that most firms considering a move to a cloud solution are looking for, others need to be reviewed, including: the ability to scale up or down, regular upgrades to ensure security, and accessibility across all departments and sites. By choosing a technologically advanced provider, the major concerns of data security, service interruptions, slow performance and poor service can be overcome.

-Matthew Ranger, Head of Sales, EMEA, Maximizer Software
Some vendors let you do Cloud and licensed...so you have flexibility.

FreeCRM.com - can be cloud or licensed on a per-server basis

SugarCRM - can be done as a cloud or as a licensed solution
My concern is about the speed of cloud based software. I need to add contact details to a cloud based database. In my client's case speed and turnover is very important and I find that the software tends to lag quite a lot. I'm using cable broadband.
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