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Another vendor elbows into the hosted CRM arena

ACCPAC is joining the fray, serving up a hosted version of its CRM application that it says cuts costs and adds simplicity.

ACCPAC International Inc. joined the online party last week, announcing at its partnership conference that it was offering a hosted version of its CRM application, called ACCPACcrm.com.

The Pleasanton, Calif.-based subsidiary of Computer Associates Inc., joins other large CRM vendors who offer hosted versions of their in-house software, such as Onyx Software Corp., SAP AG, and Oracle Corp. Speculation has swirled that Siebel Systems Inc. plans on striking a hosting deal with IBM, but Siebel executives won't confirm the reports.

ACCPAC.com offers the same functionality as its in-house counterpart but at a much lower price, said Ivan MacDonald, senior vice president of ACCPAC's worldwide CRM operations.

"The opportunity in the hosted CRM area is incredible," MacDonald said. "We recognized that in evaluating a CRM solution, one of key decisions companies make is whether to go hosted or in- house."

MacDonald said ACCPAC would offer an easy transition for hosted customers interested in upgrading to an in-house installation. He called the offering "the antithesis of vendor lock-in."

ACCPAC is offering free 30-day trials of its online software aimed at small and mid-sized businesses. Companies can start out paying as little as $995 up front for the sales force automation (SFA) software. The product ACCPACcrm.com sales team, which includes SFA with some marketing automation, costs $49 per user per month and $69 per month for the enterprise version.

What sets ACCPAC apart from competitors, according to Wendy Close, research director with Gartner in Stamford, Conn., is that it already offers an online version of its accounting software, which can be integrated with the CRM application. Only one of the pure-play hosting providers, NetLedger Inc., currently features both CRM and accounting software.

Close conducted an August survey that found that by the end of 2004 more than one-quarter of small and mid-sized businesses will choose hosted CRM. During that In the same time period, she said that more than half will have integrated their CRM with their back-office applications.

All of which could spell trouble for the hosted CRM-only providers, she said.

"The ASPs are still pretty new," Close said. "A lot of companies are using the hosted [providers] as short-term solutions until they go with the bigger vendors like Siebel."

As the economy recovers and companies have more to spend on larger CRM deployments, Close predicts that they will move away from the hosted vendors.

San Francisco-based Salesforce.com has already established a strong hosting footprint with 7,000 customers.

"Salesforce.com will be the darling of the market for a couple more years, but once Microsoft gets more mature, and clients who bought SAP CRM but haven't deployed it yet make the switch, we'll start to see churn."

That churn rate could reach 20% over the next three years, Close said.

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Hosted or in-house CRM? It depends

Featured Topic: Hosted CRM

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