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Apparently the jury is still out on the merits of SaaS as a vehicle of distributing software. In an excellent piece Galen Grumen considers actual industry examples where SaaS deployments met with varying degree of success with respect to their integration with core company apps.

One aspect that hinders SaaS integration is that SaaS providers do not offer out-of-the-box support for APIs of other enterprise applications. In other words, cross vendor integration is limited and this often leads to a scaling down of software capabilities upon deployment. It can isolate a significant portion of your other software from your CRM.

An interesting point which the article raises is that although SaaS CRM purports to be what its name suggests, in reality its capabilities are limited to functions like contact management and sales force automation. The heavy duty transaction management activities are in most cases executed by in-house software.

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