On-premises vs. cloud contact center – What’s right for which business?

Contact centers differ in terms of costs, staff requirements, and management. Organizations must weigh both options to find the right fit.
10 June 2021

On-premises vs. cloud contact center: What’s right for your business? Source: (Photo by MAURICIO LIMA / AFP)

  • As cloud technology and its benefits have become more prevalent, organizations may find the switch from on-premises to cloud platforms compelling
  • When comparing on-premise vs cloud-based call centers, a drastic change in capability and services strength is noticeable

When a business has acquired a sizable customer base and needs to address them, the next item on the agenda should be to establish a call center. With the changing nature of both IT and business requirements, this decision divides business owners into two alternatives – either an on-premises or a cloud contact center.

To simplify, the concept of a cloud-based call center is very attractive as it increases returns on investment, minimizes the costs, manages the workforce, and eliminates the costs of physical spaces, as well as minimizes the hiring of specialized IT professionals. On the flip side, businesses opting for an on-premise call/contact center are more likely to increase their responsibilities towards call-center activities. 

It includes expensive spending on hardware configurations, software updates, call management, HR-related purchases, and more. While the cloud-based systems are purchasable as per their needs, they need not acquire the entire system. It’s like buying a service on a pay-per-use basis. 

What is a cloud contact center?

Basically, cloud contact centers relinquish control of the software and hardware platforms to a vendor through cloud Software-as-a-Service (SaaS). The organization loses ownership of the contact center platform – compared to the full control it has when the contact center is physically located on its premises – but, in return, receives benefits like support and analytics data from cloud services that is not readily available in on-premises environments.

On-premises vs cloud 

First things first, since an on-premise contact center requires the company to purchase hardware and shortlist a location to put in their servers, the time to get started is longer. On the other hand, time to market – the time it takes to go live with your new customer service center – is much shorter in the case of cloud call center software where you ostensibly only need the application and a viable internet connection to get started.

In terms of cost, it all comes down to whether you are looking for capital expenditures or operating costs. For on-premise deployment, you are looking at upfront costs for the space to put your servers, hardware, licenses, and others. And for the cloud, you have an ongoing monthly subscription cost along with the cost of internet and contact agent devices.

As for scalability, you might need to physically upscale or downscale an on-premise setup, as opposed to a couple of clicks and tweakings for a cloud contact center solution. This makes a cloud setup a lot more flexible and scalable according to the business needs – compared to an on-premise solution.

Then there’s the reliability aspect whereby the on-premise contact center should provide more stability in terms of call lag and call quality. However, the quality will only be as good as the contact center technology that you are using. Similarly, for cloud contact centers, the call quality is dependent on how strong and stable is the internet connection, which might not be consistent with various call agents located in different locations.

Most importantly, there’s business continuity to consider. With so much hardware involved in an on-premise startup, it can cause an issue when a disaster hits. It takes a lot longer to physically switch servers and get back up and running. However, the downtime is significantly less in the case of a cloud-based contact center solution.