Customer Relationship Management (CRM) applications are well understood. Their functional components are straight forward, the technology sound and mature, and the benefits of successful deployments clearly generate value for organizations – large and small. So why are these applications so expensive to buy or rent?  Why are there so few choices on the market for companies to consider?

The reason there are so few CRM vendors is not because it’s costly to build great CRM applications, but because of the costs required to market and sell CRM applications. Take a look at the financials of any of the established CRM players, both hosted and on-premise. What you will see is that less than 15% of a CRM vendor's revenue is applied to product development and easily 50-70% of revenue is allocated to sales and marketing expenditures. This has been the norm for traditional software companies, but is it the right model for today?