Customer relationship management (CRM) vendors are rushing to extend their on-demand offerings, to differentiate themselves with features such as client management and options to switch between hosted systems and in-house applications.

NetSuite last week launched NetCRM Services Edition. This hosted CRM product is targeted at services organisations such as accountancy and law firms. It offers features including tools for service item management, project tracking and document management.

Sean Rollings, NetSuite's director of product marketing, argued that rival CRM systems focus too much on short-term gains, such as the sales process. But Theresa Jones of analyst firm Butler Group said, "It is horses for courses, the ideal fit depends on what you are looking for. There is no 'best' (approach), you have to look at your company requirements."

Cincom is hedging its CRM bets. Its Synchrony product, now available in the UK for the first time, can be used as a hosted system or an in-house app, and allows firms to switch as required.

Meanwhile, hosted CRM pioneer Salesforce.com is set to announce the next stage of its on-demand strategy this week in New York. Tim Knight, director of product marketing, said the firm's success is based on customisation abilities. "We have 13,900 customers, or 13,900 vertical apps," he added.

Research firm AMR said ease-of-use is a higher priority than advanced functionality for firms. It recently praised Salesforce for its ability to offer tailored CRM systems integrated with business systems.