Customer relationship management and cloud computing mean different things to different people, and nothing at all to some people.

But business decision-makers who write off CRM and cloud computing as "fads" or "MBA-speak" may be depriving their enterprises of an opportunity to measurably improve operations, and even obtain a big boost in the bottom line. In fact, combining CRM with cloud computing may offer a compelling value proposition to any size business.

Cloud Computing, and Why It Is (Potentially) Huge News for Small Business CRM

Cloud computing has been receiving increasing levels of hype lately, and lacks a clear definition in many peoples minds. A working definition, then, must serve as a foundation of any conversation about cloud computing.

At the most basic level, cloud computing amounts to distributed storage and dissemination of data, rather than all data being housed and accessed from a central location, such as a server. Cloud computing uses interconnected computers to decrease data storage cost and improve data distribution performance.

Why is this a big deal for small business CRM?

Small Business CRM Can Be Cheaper Because of Cloud Computing

Giant, innovative companies like Google, Amazon, and Salesforce.com are leading the drive towards cloud computing. Amazon, for example, now has an entire division called "Amazon EC2" dedicated to helping e-commerce achieve computing capacity "in the cloud."

Throw aside the jargon and the importance of cloud computing with regard to small business CRM becomes bone simple: cloud computing makes small business CRM cheaper.

All that is needed to verify this fact is to go shopping for a CRM solution that is hosted in-house. The hardware (servers) and software licensing costs can rise into the thousands very quickly, and then go up from there, also very quickly.

By contrast, companies like those named above can link together smaller, cheaper computers and build extremely cost-efficient and extremely high-performance networks. The kinds of networks needed to run a top shelf CRM application--for "pennies on the dollar" compared to buying and doing everything in-house.

As storage becomes cheaper and cheaper thanks to Moores Law, cloud computing should get cheaper and cheaper.

Cloud Computing-Powered CRM Is All About Partnering

What e-commerce start-up would not benefit from an alliance with Amazon? It couldnt hurt.

Beyond particular partnerships, though, the huge news about cloud computing with respect to CRM is a sea change in mentality. Of course competition will never go away, but the era of partnering is clearly underway, and cloud computing is a major factor. CRM software is a massive test of this new era.

CRM software used to be the epitome of a program that was customized to the needs of one company, and could by no means be used by another company without extensive customization. The era of cloud computing has changed all that, causing CRM software providers to make sure that CRM applications work with other CRM applications.

After all, when most computing is done "in the cloud," stuff that does not work together does not work.

Sources

Salesforce.com (PDF)

SearchCRM