Customer Relationship Management has emerged as a key factor in effective and efficient management of a business enterprise. Owing to this, they are used by all kinds of firms ranging from start-up businesses to large corporate houses to accelerate their business functions. However, not all firms have the budgets to fully support, buy or maintain the CRM solutions on their premises.

In such cases Hosted CRM comes to the aide of small firms to incorporate the operational efficiencies of high priced CRM solutions at a low, total cost of ownership. In Hosted CRM, a firm out-sources the development, implementation and management of CRM application to an Application Service Provider or ASP. The ASP in its turn makes the CRM services available to the firm at low cost. Hosted CRM are very cost effective solutions and are widely used these days. Some business concerns that have successfully implemented Hosted CRM solutions are Siebel, Salesforce.com, and UpShot.

Hosted CRM are implemented by small to medium sized companies to get a good return on investment (ROI). A recent survey by Nucleus software established that over eighty percent of companies who used Hosted CRM have obtained a substantial benefit in ROI. Although, these do not offer the level of customizability that an on-premises implemented CRM solution can provide, but are nevertheless successful in providing sizable and optimized CRM software suitable for most purposes.