When it comes to differentiating call center solutions by the criteria that matter for business, not for researchers of the call center industry, there is one such differentiating criterion - call center infrastructure design.
Depending on the call center infrastructure design, there are two types of call center solutions - on-premise call center solutions and cloud-based contact center solutions. Now it is important to answer the main question for business: what’s better - on-premise vs cloud-based call center software? What is the difference between on-premise call center and cloud-based call center solutions? What are the pros and cons of each of these software tools?
So, let’s start.
What is on-premise call center solution?
On-premise call center software is the type of call center software that uses physical infrastructure located in a certain place, including company-owned servers, to operate. In other words, on-premise call center solutions have precise call center infrastructure requirements - the company has to build physical contact center infrastructure, including communication hardware (desk phones, connect servers to headsets) and software, and provide regular maintenance and proper configuration to this infrastructure in order to ensure stable functioning of on-premise call center system. All that entire infrastructure has to be located in physical spaces.
On-premise call center systems are also called on-premise phone systems, as they have a long history of being the only call center solution for businesses of any size - if you forgot, there would be no cloud-based call center solutions without cloud computing which is quite new technology compared to its older brother.
Businesses have spent decades relying on on-premise call center systems, and to be honest, they weren’t that bad in the matter of data security, reliability, or functionality. Nonetheless, the development of cloud technologies has hit the on-premise call center solutions as anything else before, while another strike has come from the pandemic in 2020.
As you can guess, with the use of an on-premise call center system, call center agents were bound to the office, as they had to use all the on-premise call center infrastructure. The pandemic changed the world in the case of remote work, and on-premise contact centers couldn’t offer a relevant solution to this challenge. Moreover, they have another huge disadvantage: they are costly when it comes to set-up contact center costs and also some ongoing costs.
What is cloud-based call center software?
Cloud-based call center solution is a call center software tool that uses cloud infrastructure to store, transmit, and synchronize data flows and manage call center operations. It is also called virtual call center software, or hosted software. Cloud technology in this case allows developers to get rid of physical infrastructure, and some other call center infrastructure requirements for the purpose of simplifying the set-up process and overall cloud-based call center functioning.
All cloud-based call center processes take place online, which means that the only requirement for a cloud-based contact center is to have stable access to a strong Internet connection. This is extremely important for SMBs (small and medium-sized businesses) as cloud-based call centers are easy to purchase and implement.
Almost all cloud-based contact center solutions are provided via the SaaS (Software as a Service) model, which also has its name dedicated to the cloud-based contact center industry - CCaaS (Contact Center as a Service). When you see this abbreviation, it means you are reading about a cloud-based call center.
Well, now when you are basically acknowledging the definitions of cloud-based contact center and on-premise call center solutions, let’s come back to the main question: on-premise vs cloud-based call center software - what’d be better for your business?
Main differences: on-premise vs cloud-based call center software
On-premise vs cloud-based call center software: Setup costs
When it comes to setup costs, cloud-based contact center solutions are much more preferable, especially for small and midsize businesses. First of all, they don’t require you to invest in all that costly infrastructure, which includes physical hardware and physical servers which can cost a few thousand dollars. Moreover, don’t forget about the price of the on-premise call center software itself. The pricing model of cloud-based call center works as subscription - you pay fixed for each license you need (1 license = 1 employee), but keep in mind that some cloud-based contact center services providers charge additional fee for set-up - nonetheless, it is still much cheaper than setting up an on-premise call center solution.
On-premise vs cloud-based call center software: Upfront costs
If we compare the price of owning a cloud contact center vs on-premise call center, the main thing to take into consideration is that at some stage of owning, an on-premise call center will cost you the same money as a cloud-based contact center. Nonetheless, it can take years before it will happen - all depends on the exact conditions of the situation. In the case of on-premise call center, you pay the IT team for its maintenance and also you pay for server licenses. In the case of a cloud-based contact center, you pay the subscription price and that's the only operating costs needed to run cloud service.
Cloud contact center vs on-premise call center: Scalability
Another huge advantage of a cloud-based call center over its on-premises competitors is that you can scale a cloud-based solution up much more quickly and efficiently. Firstly, let’s make it clear what we mean by scalability - it covers such updates and upgrades of the system as providing new integrations, and features, or scaling up the number of employees. In the case of a cloud-based contact center, you just have to ask your vendor to provide all required upgrades and agree on a price for such customization in accordance with business requirements. In the case of on-premises call center, you have to scale up the infrastructure too, which means expenses on each upgrade will be much more expensive compared to what you would pay for cloud upgrades.
Cloud contact center vs on-premise call center: Integration capabilities
The situation with integration capabilities in both on-premise call center solutions and cloud call center software is almost identical when it doesn’t come to ease of integration setup. Both on-premise call centers and cloud call centers can have native integrations and custom integrations - the first ones are included in the basic software pack, while the second ones are installed on demand. As you could guess, it will cost you a fortune to install an integration into an on-premise solution, while it works quite easy for cloud call center systems.
Cloud contact center vs on-premise call center: Functionality
When it comes to functionality, there are not so many differences between the two. Nonetheless, there are some features that can’t be provided in on-premise solutions compared to cloud call center solutions - these include some integrations and AI-driven tools, as they work only with cloud providers. By the way, it is an ongoing trend that most of cloud call center providers prefer cloud platforms, and there is a high probability that on-premise solutions will disappear from the market soon, as nobody wants to invest in such a legacy technology, but let’s come back to this later.
Cloud vs premise-based contact center: maintenance
When it comes to maintenance, there is another argument in favor of cloud call centers. In the case of an on-premise contact center solution, you have to pay for maintenance with your own money: it relates to hiring and employing IT team that will maintain the system and additional expenses on maintenance and contact center resources - as you are the owner of the infrastructure. In the case of a cloud call center, the owner is the vendor - so all maintenance, including ensuring system stability and eliminating downtimes is the responsibility of the vendor.
Cloud vs premise-based contact center: level of security
Many experts use the security argument to convince people that on-premise call center systems are more secure and reliable than cloud-based systems, but this is only half-true. To put it simply, it is theoretically more difficult to hack on-premise system as it requires hacker to get close access to servers - thus hacker has to either be your employee or get a supporter from your employees. Nonetheless, the truth is different - it is still possible to hack your system even without accessing servers physically. On the other hand, cloud call center is also 100% secure - vendors use only best cloud servers which are 24/7 monitored by security experts and a chance to hack such advanced system is at least as low as it is for on-premises systems - without any upfront investments in security, which are must-have in traditional call centers and affect cost of ownership, because security requires additional infrastructure costs and investement in hardware.
Cloud vs on-premises contact centers: customer perspective
From the customer point of view, there is no difference in customer experience or customer satisfaction when it comes to difference between cloud-based call center platforms and on-premises contact centers. Things that affect customer experience include reliable Internet connection, sufficient bandwidth, contact center management efficiency, quality of customer interactions, flexibility of customer communications and so on.
Nonetheless, cloud-based platforms sometimes offer some advanced features that can be available only on cloud contact center platform.
Contact center cloud vs on-premise systems: What does relevant data say about it?
Well, to find the winner of the rivalry - contact center cloud vs on-premise system - let’s look at open data.
36% of call centers are cloud-based (2020 data);
Cloud call centers report to have 27% less downtime than on-premises;
Large cloud call centers (500 seats and above) report 43% operational cost saving after the transition to the cloud;
57% of business executives prioritize cloud communications.
The market of cloud call center software is going to reach 27 billion dollars in 2024, and grow up to almost 90 billion in 2029.
On-premise vs cloud contact center: what to choose?
Now we have finally reached the most important part of the topic - and you will receive that so-awaited answer now.
We have discussed the differences between cloud call center systems and on-premises call center solutions above, and as you can see, there is only one argument that can be by a long shot considered as in favor of on-premises solutions. Market share of cloud-based software also grows, so we can make a prediction - or, to be honest, call a spade a spade - that on-premise systems are going to disappear soon. The only thing that makes them alive is willing of some large enterprises to rely on their legacy systems as they just don’t want to deal with all cloud transition issues, like synchronization of databases and so on. Thus, if you are a young entrepreneur who is looking for reliable, scalable and functional solutions that will grow synchronously with the growth of your company, the cloud call center software is the only preferred option if you want compatible software.
Let’s look at 5 “whys” again:
- It is cheaper in terms of set-up and maintenance, as well as the set-up takes 24 hours instead of a few weeks in the case of on-premise system;
- It is more functional in the case of some advanced features, like AI-tools integration;
- It is easier and cheaper to scale up, and upgrades don’t even require any steps from your side;
- It is secure and reliable, as studies show cloud solutions show less downtime hours and thus provide better business continuity;
- It provides remote work opportunities for your teams.
Well, if we had wanted to prolong this list, we would have done it easily, but these are the main advantages of the cloud solution over its on-premise counterpart. In other words, the best contact center infrastructure is a cloud contact center solution.
What other types of contact center software exist?
Inbound and outbound call center software
When we leave infrastructure issues alone, there is another important differentiating factor of call center software - type of phone calls to handle.
Thus, there are three types of contact center solutions.
Inbound call center software handles inbound calls only, mostly for customer service purposes. Most call centers use this type of software. Remember that cloud PBX isn’t synonymous with inbound call center software, even though it also handles inbound calls - it simply has limited functionality and can’t be considered call center software at all.
Outbound call center software provides features to perform outbound calls only. Thus, such software is used among telemarketers, sales call centers, and call centers that perform market research.
Blended call center software covers the functionality and capabilities of both inbound and outbound call centers. Thus, it is the most advanced call center software.
How to select the most suitable call center software for your business?
Well, if you want to spend weeks on surfing through the Internet trying to find differences between dozens of same-looking solutions, we can only wish you patience. Even if you choose a few solutions that seem to be the most suitable for you, you will still spend days in communication with their sales departments and it is easy to get lots in tons of information about feature, pricing policies, and so on. Moreover, no one will give you guarantees that there will be no hidden fees or other pitfalls. Thus, you will also have to look for real customer reviews and try to find out which of them are real, and which ones are fake or paid.
If you want to avoid all these troubles, there is a solution - contact us and we will provide you with a detailed presentation of our product, which is an example of a truly capable, reliable and scalable solution for call centers of any size. Such a solution will help you achieve business growth and reach your business objectives with the use of the most advanced cloud-based technologies. If you don’t believe us, ask our customers - no one of them left dissatisfied.
