How to Choose the Right Cloud - Advanced Design Approaches to Emerging Software Systems - page 233

We will discuss the deployment of Customer
Relationship Management Systems; a common
business application that is becoming popular on
the cloud. We will focus on software development
costs of such an application.
Customer Relationship Management (CRM)
is an information industry term for methodolo-
gies, software, and Internet capabilities that help
an enterprise manage customer relationships in
an organized and efficient manner (Laudon &
Laudon, 2009). CRM functionality may include
product plans and offerings, customer notifica-
tions, design of special offers, e.t.c.
Development and cost data for CRM ap-
plications built in-house can be found in the
International Standards and Benchmarking Group
(ISBSG, 2010) data base. Based on data coming
from ISBSG, CRM systems on the average require
1867 total effort hours for completion. Keeping
in mind average US salaries (4141 US$), 1867
effort hours correspond to 233 workdays, 11,65
months and 48242$. Analyzing the projects that
include development data we can see that 56%
of the projects require development teams larger
than 9 people. All CRM projects developed in-
house followed a particular methodology while
only 33% of projects that presented values for
that field were supported by the use of CASE
tools. Cost and development data for CRM ap-
plications developed in-house are presented in
tables 9 and 10.
On the other hand CRM cloud applications
with Zoho (Zoho, 2010) and Salesforce (Sales-
force, 2010) leading providers charge based on
the number of users and the number of applica-

tions accessed. The prices range from 12$ per
month to 75$ per month, per user. Considering in
that case 5 potential users that will use a sublist
of the product features charged 50$ per month
the annual costs are calculated to be 3000$.
In both cases analyzed previously costs as-
sociated to software development and usage are
recorded. In order to calculate infrastructure,
maintenance and deployment costs we consider
certain assumptions made by the analysis pre-
sented in (Yankee, 2005). In Table 11 we present
a five year cost analysis including infrastructure
and software costs for in-house and hosted to the
cloud solution for a CRM application; the costs
presented are only indicative and they may vary
from case to case.
We make the following assumptions (These
assumptions and costs cannot be generalized in
all possible deployment models but still provide
an initial support to enterprises that want to cal-
culate relevant costs):

• The number of end users of the CRM ap-

plication is 10. This number was selected in
order to simulate real world situation for a
Small Medium Enterprise (SME). Keeping
in mind that each employee serves from 50
to 100 clients we consider that the guest
list of a SME is 500-1000 people.

• The functionalities of the CRM sup-

port Sales, Marketing and Relationship
management.

Table 10. Development data statistics for on-
premise CRM applications

Table 9. Cost data statistics for on-premise CRM
applications

Development data Values and percentages
Development Team Size > 9 people. (56%)
Use of CASE tools Yes (33%)
Programming Languages C, C#, Cobol, Visual basic and
Oracle (65%)

Cost data Average value

Effort (hours) 1867 h.

Size (function points) 181.5 fp Platform PCs (39%), clients and servers (15%).

Cost (US $) 48242 $ Database Oracle (41,1%.