On premise vs Cloud Contact Center: Which is Right for You?

If you are setting out to build a contact center, one of the first big decisions is whether to go with a cloud-based solution or stick with an on-premise setup. Both have their pros and cons. While cloud contact centers have become pretty popular over the years, plenty of companies still choose to keep things in-house.

With so many opinions and bits of advice out there, it’s easy to feel a bit overwhelmed.

In this blog, we’ll walk you through both options. We will break down the key differences and help you understand the benefits and challenges of each.

But first, let’s start with the basics.

What is an On-Premise Contact Center?

An on-premise contact center is the more traditional setup, where you have to host and manage all the infrastructure. All the hardware and software required for to manage your contact center will be right on-site, either at your office or in your own data centers.

Since everything is managed in-house, you have complete control over how your contact center operates. This means you can tailor it exactly to your needs and make it work seamlessly with your existing systems.

Additionally, with all data stored internally, you will have tighter control over security. This setup is especially helpful for high-compliance industries like healthcare and BFSI. In-house security makes it easier to stay compliant and protect sensitive customer info.

Features and Benefits of On-Premises Contact Center

Here are the most popular benefits and features of cloud-based contact centers:

Benefits:

Complete control: You get full ownership of hardware and software for deep customization.
Enhanced data security: Data stays within your own environment, reducing exposure to external risks.
Compliance-friendly: Easier to meet strict regulatory and industry-specific requirements.
Lower latency: On-site infrastructure reduces delays, improving call quality.
Predictable costs: Fixed infrastructure costs can simplify budgeting over time.

Features:

Customizable environment: Tailor the contact center to specific business processes and integrations.
Direct hardware management: Full control over servers, network devices, and telephony systems.
On-site data storage: All data resides within the company’s own data centers.
Traditional telephony integration: Supports legacy phone systems and private branch exchanges (PBX).
In-house IT support: Dedicated teams manage maintenance, upgrades, and troubleshooting.

What is a Cloud Contact Center?

A cloud-based contact center, also known as a cloud based contact center solutions is based entirely on the Internet. These centers offer the opportunity of working remotely, while widening the business’s reach and accelerating its customer experience. In this article, we will compare these two types of contact centers under a range of elements.

Features and Benefits of Cloud Contact Center

Here are the most popular benefits and features of cloud-based contact centers:

Features:

Scalability: Easily scale up or down based on demand without heavy investment in hardware.
Lower upfront costs: No need to buy and maintain physical infrastructure, reducing capital expenses.
Faster deployment: Quick setup and rollout compared to traditional on-premise solutions.
Remote access: Agents and supervisors can access the system from anywhere, supporting remote work.
Automatic updates: Cloud providers handle software updates and maintenance, ensuring you always have the latest features.

Benefits:

Omnichannel support: Integrates multiple communication channels like voice, chat, email, and social media.
AI and analytics: Built-in AI tools for routing, chatbots, sentiment analysis, and performance insights.
Flexible integrations: Easily connect with CRM, helpdesk, and other business software via APIs.
Pay-as-you-go pricing: Usage-based billing models that allow cost control.
High availability and disaster recovery: Cloud infrastructure provides redundancy and failover to minimize downtime.

On Premise vs Cloud Contact Center: Key Differences

Choosing between an on-premise vs cloud contact center really comes down to your unique needs, resources, and priorities. On-premise setups provide greater control, but cloud offers greater flexibility and cost savings.

To help you decide which is right for you, here are the key differences between the two.

Feature/Aspect	On-Premises Contact Center	Cloud-Based Contact Center
1. Deployment Location	Hosted locally on your servers and data centers	Hosted by third-party cloud providers, accessed via the internet
2. Initial Costs	High upfront capital expenditure for hardware and software	Low upfront costs with subscription or pay-as-you-go pricing
3. Scalability	Limited by physical infrastructure, scaling can be slow and costly	Highly scalable; can quickly adjust capacity based on demand
4. Maintenance	Managed in-house by IT staff, including updates and repairs	Managed by a cloud provider, including automatic updates and patches
5. Customization	High level of customization and integration possible	Customization is available but sometimes limited by provider capabilities
6. Data Control and Security	Full control over data; preferred for sensitive or regulated data	Data stored off-site; relies on provider’s security and compliance measures
7. Accessibility	Access generally limited to on-site or VPN connections	Accessible from anywhere with internet, enabling remote work
8. Latency and Performance	Typically lower latency due to on-site infrastructure	Potential latency depending on internet connectivity and cloud location
9. Disaster Recovery	Requires dedicated disaster recovery planning and infrastructure	Built-in redundancy and failover managed by cloud provider
10. Upgrades and Innovation	Upgrades are manual and may require downtime	Continuous updates and access to latest features without downtime

Cloud vs On-Premise Contact Center: Which is Better?

Now that we’ve explored the key differences between on-premise and cloud contact centers, it’s clear that each has its own strengths. However, due to higher flexibility and tech-focused approach, companies nowadays are leaning toward cloud solutions. According to a MarketsandMarkets report, the global cloud contact center market is expected to grow from $20.9 billion in 2023 to $86.4 billion by 2029.

Here are the top reasons why a cloud contact center often outshines traditional on-premise systems and why it might be the smarter choice for you:

1. Flexibility

An important element to consider when thinking about your contact center is flexibility. In that regard, a cloud contact center is a great choice. As the name suggests, cloud contact centers are hosted remotely so there isn’t any need for physical infrastructure. Your staff can work from anywhere via any Internet-enabled device.

In times of a crisis, a remote working option ensures that operations continue to run smoothly.

On-premise contact centers don’t offer such privileges. Your remote working communication solutions won’t have access to all the features, you may be unable to mask your calls and even leave private data exposed.

2. Cost

Cost is always a concern and should be too. If you already have an on-premise contact center, you may be wary of shifting to the cloud. But fret not for it has many cost benefits in the long run.

Setting up an on-premise center is costly and they need constant maintenance. You will end up spending a lot on fees for an engineer or dedicated in-house support staff. A cloud contact center, on the other hand, incurs no maintenance costs for updates or fixes; their support package includes everything.

Cloud contact center solutions also eliminate the need for premises, as staff can work from anywhere they like. You will save a large amount of money on the costs associated with a physical office.

3. Ease of management

Traditional cloud systems can store very little information, nothing except call logging times and the number of calls made. A manager won’t have any key information if there aren’t additional programmes to monitor performance. Of course, the more programmes needed to manage performance, the easier it will be to make mistakes or overlook something important.

A cloud contact center can save the manager’s precious time and resources by making monitoring performance easier, without any additional software. They can access a large range of analytics. For instance, Acefone’s portal is easy to use and gives plenty of information on individual agent performance, call waiting time, offers call recordings and much more.

Managers can, thus, train their agents more effectively and keep a close eye on everything with just a few clicks.

4. Scalability

You aim to grow. When your business grows, your contact center should too. Cloud contact centers offer the option of scalability; instantly and at a minimal cost. You can add as many phone lines as you need and even hire staff globally to manage it all.

A global workforce means avenues for new customers from around the world—without any hefty investment in hardware too.

This isn’t an option for traditional solutions. Scaling operations means expanding on location, adding more support staff, and incurring infrastructure costs. More often than not, this could hold your business back.

While both solutions have their merits depending on business needs, a cloud contact center offers the room to grow and ensures seamless operations throughout. In the middle of a pandemic, a cloud center is god-sent.

How to Migrate from On-Premise to Cloud Contact Center?

Moving from on-premise to cloud might seem intimidating, but with the right plan, it can be a cakewalk.

Here’s a quick checklist to guide you:

Define your goals: Do you want more scalability, agent flexibility, or cost savings?
Assess your current setup: What’s working well, and what needs improvement?
Pick the right cloud environment: Does your vendor offer strong data security, compliance, and easy integrations?
Decide on deployment: How much control and customization do you want?
Choose a cloud partner: Look for one who understands your industry, has a solid track record, and offers great support.
Select the right architecture: Make sure it supports scalability, availability, and fault tolerance.
Prioritize migration: Start by moving non-critical apps first to minimize risk.
Set performance benchmarks: Measure your current KPIs so you can track improvements.
Plan data migration carefully: Ensure your data moves securely and stays consistent.
Test your apps: Make sure everything works well in the new cloud environment before going live.

Ready to migrate from your sluggish on-prem solution to a cloud-based contact center? Our experts can help you.

FAQs

On-premise contact centers often face high upfront costs, complex maintenance, and slower scalability compared to cloud solutions. They require dedicated IT staff for updates and troubleshooting, and deploying new features can be time-consuming. Additionally, on-premise systems lack the flexibility and remote accessibility that cloud platforms offer.

On-premise contact centers offer greater control over security since data stays within the company’s infrastructure, ideal for sensitive information. Leading cloud providers like Acefone invest heavily in security but involve third-party data handling. Compliance needs and risk tolerance often determine which option is better.

On-premise solutions require significant upfront investments in hardware and maintenance, with ongoing IT costs. Cloud contact centers typically use a subscription or pay-as-you-go model. This lowers initial expenses and offers predictable operational costs. Cloud is generally more cost-effective for scaling and smaller businesses.

Cloud contact centers offer easy and rapid scalability, adapting to fluctuating demands without additional hardware. You also get On-premise scaling involves purchasing and installing physical infrastructure, which can be slow and costly. Therefore, cloud is preferred for businesses expecting fast growth or seasonal spikes.

Cloud contact centers enable rapid deployment and seamless, automatic updates without downtime. On-premise setups typically require longer deployment times and manual upgrades, which can disrupt operations. If you need fast implementation and continuous innovation, cloud is usually more efficient.