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Does on-premise CRM offer more functionality than hosted CRM?

A skeptical reader asks Alan Winters about the functionality of SaaS CRM compared to on-premise CRM in this expert tip.

While I keep hearing about the benefits of hosted CRM, I can't help but think that there are more benefits to having an on-premise solution. Am I right – are there additional capabilities with an on-site CRM application? Or can you convince me otherwise?
There are both positive and negative aspects of both solutions. It really depends on where your company is in the CRM "lifecycle" and growth process. What I mean by that is, if your company is stable, with little growth or change, then a hosted CRM solution may be the best bet. On the other hand, if your organization has rapid change with high growth, then the on-premise solution would be the best choice. With the on-premise solution, you have much more control over your future and can make much quicker dynamic changes to your system. This is assuming that your IT department has been funded to manage an on-premise solution.

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