What Is CRM Software? A 2026 Guide

What CRM software is, the difference between cloud and on-premise, how it helps businesses, and how to pick the right type.

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Last updated: June 2026 · Written by the CRMReviews team

CRM software is the technology that puts customer relationship management into practice - a system for storing customer data, tracking interactions and automating sales, marketing and service. Most of it now lives in the cloud. This guide explains what CRM software is, the difference between cloud and on-premise, how it helps businesses, and how to choose the right type for yours.

What is CRM software?

CRM software is a system for managing customer experiences and interactions - centralising customer data, streamlining processes and supporting communication across sales, marketing and service. Where "CRM" the concept is a strategy, CRM software is the tool that makes it work day to day. If you're new to the idea, start with what is a CRM, then come back here for the software detail.

Cloud vs on-premise CRM

The biggest decision in CRM software is how it's hosted. There are two models:

Cloud-based CRM

Hosted on the vendor's servers and accessed via a browser or app. The vendor manages infrastructure, security and updates, and you pay a monthly or annual subscription, usually per user. Lower upfront cost, no hardware, and access from anywhere make it the default for most businesses.

On-premise CRM

Installed and run on your own local servers, maintained by your in-house IT team. You get more control over customisation and configuration, but you take on the hardware, setup and ongoing maintenance.

Types of CRM software by function

Beyond hosting, CRM software is often grouped by what it emphasises: operational (automating sales, marketing and service tasks), analytical (analysing customer data for insight) and collaborative (sharing information across teams). Most modern tools blend all three. Our CRM features explained guide covers what each does.

How CRM software helps businesses

• Scales easily - adding users or features is simple and cost-effective.
• Enables remote collaboration - everyone sees real-time updates from anywhere.
• Boosts productivity across sales, marketing and support by automating routine work.
• Delivers analytics - insight into customer behaviour to design better campaigns.
• Adds AI - sales assistants, automated workflows and chatbots that act on behaviour in real time.

For the mechanics, see how a CRM works.

Who uses CRM software?

Almost every kind of business: sales teams to manage pipelines, marketing teams to run campaigns, support teams to handle tickets, and owners to see the whole picture. From solo traders to enterprises, the common thread is wanting customer relationships organised and growth measurable. For smaller businesses, our best CRM for small business guide is a good starting point.

How to choose CRM software

Start with deployment: cloud suits most: lower cost, no IT overhead, anywhere access. Then match features to your needs and trial before you buy - our how to choose a CRM guide has a full checklist. If you want CRM plus marketing in one place, an all-in-one cloud platform like GoHighLevel bundles funnels, email/SMS and automation with the CRM - see our review.

Frequently asked questions