Types of CRM

On-premise CRM: Total cost of ownership and when it makes sense

An on-premise CRM runs on your company's own servers. While justified for specific regulatory or security constraints, the total cost includes hardware, administration, backups, and IT time-costs often overlooked in simple price comparisons against monthly SaaS subscriptions which include these natively.

The correct comparison isn't 'one-time license vs. monthly subscription', but rather the total cost of ownership (TCO) over three years, including all operational overheads. Most companies that re-run these calculations find the cost gap is significantly narrower than it first appears.

However, certain scenarios still demand local installations: contracts with strict data sovereignty clauses, air-gapped network environments, or integrations with legacy systems that cannot be safely exposed to the open web.

In short

  • Total Cost = infrastructure + administration + updates + backups + IT man-hours.
  • Version updates become manual projects rather than automated background events.
  • Disaster recovery is entirely the company's responsibility.
  • Mobile access requires additional security configuration and VPN setups.
  • Justified by specific compliance requirements, rarely by perceived cost savings.

Hidden costs in on-premise budgeting

The most frequent omissions from internal budget calculations include:

  • A dedicated staging environment, separate from production.
  • Monthly administration time, calculated at the real hourly cost of IT staff.
  • Periodic testing of data restoration from backups to ensure business continuity.
  • Security patching for the entire technology stack (OS, database, web server).

Frequently asked questions

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