Both on-premise and web based CRM software offers usually same functionality but in different ways. They differ in their way of implementation, customization, ROI for a given period, infrastructure requirements, etc. As a small or medium sized business manager one have many options when going on to implement a Customer Relationship Management software in your organization.

1. Choose an on-premise CRM
2. Choose a web-based or on-demand CRM
3. Implement a low-cost web-based CRM first and then move to on-premise one.
4. Implement a low-cost simple CRM first and then move to a complex CRM with a scalable plan.

On-premise CRM systems are good to implement in companies having sound IT infrastructure with technical staff, having complex business strategies or markets to cope, having good capital reserve, having sensible data issues, and having very high growth demands. Web-based CRM systems favor companies having lesser number of employees with limited technical knowledge, having simple business strategies, lack good capital reserve, growing at fair pace, need immediate implementation without having no sufficient IT infrastructure and demanding no unexpected costs.

The last two options really help small but rapidly growing companies having no enough capital reserves. They can adopt a low-cost simple web-based CRM system to get used to it and develop a business strategy based on customers. When enough capital requirements are fulfilled or complex strategies are demanded, they can move to an on-premise or advanced web based CRM software. These options gain more attention as increasingly many on-premises CRM provides are offering their systems for monthly fee and many web-based CRM vendors are offering flexible pricing plans.