The Opportunity Cost of Ownership in CRM

I caught the tail end of a Twitter discussion, yesterday, between rwang0 (Ray Wang) and two friends, Mitch Lieberman and Esteban Kolsky. Ray had stated that while “Total Cost of Ownership” may look the same on the surface, SaaS vendors have a lower internal cost and therefore more dollars available for R&D and innovation. This is due to the 1 to many infrastructure of SaaS. I’m not interested in that debate, at the moment, although it’s an interesting point. I’m more interested in talking about successful customer outcomes.

[blackbirdpie url=”http://twitter.com/rwang0/statuses/44857716233089025"]

I see a number of problems with this focus on cost. The differences between purchase cost and total cost of ownership both miss the mark for the customer, in my mind. I will contend that SaaS is good for the vendor, if Ray’s argument is valid — and I will assume it is. But, is it also good for the customer (the long-term success driver)? Is cost the outcome we should be looking for in the CRM w…