As in every sector of telecoms, cloud technology has instigated a major shake up of the contact centre solutions market. With market value predicted to increase from $5bn to $15bn globally by 2021, cloud-based contact centre products and services also represent a major growth opportunity for vendors and resellers alike.
However, given the specialist nature of contact centre solutions, and in particular the sizeable range of software and hardware components they encompass, on-premises deployments remain popular. With telephone endpoints, PC terminals and screens, display boards, network and routing equipment all needed on top of a wide variety of specialist software, many businesses continue to prefer to own and run systems themselves.
Others again are opting for a hybrid blend of cloud and on-premises options, taking the best features of each for different equipment and different areas of operation.
So how do you choose between an on-premises and cloud contact centre solution? What factors influence the decision? Here we’ll take an overview of the key differences, outline in what circumstances one might have an advantage over the other, and highlight the benefits of each.
Definitions
Before we go any further, let’s clarify some of the terminology that is used to describe different types of contact centre solution:
- On-premises describes a deployment where all hardware and software is installed and operated in the building where the contact centre is run from. The typical model involves the contact centre operator owning all equipment, including purchasing software which is installed and run from their own data centre.
- A managed or hosted contact centre is nowadays often taken to be synonymous with a cloud solution, but this not strictly accurate. All the terms managed and hosted refer to is the involvement of a third party who either leases equipment to a contact centre operator or runs some part of the operation as a service. So you can have hosted contact centre solutions which are entirely on-premises, with all hardware and software leased, installed and maintained at the client’s offices. Equally, you can have hosted cloud services, where the key infrastructure for the contact centre is provided remotely via the internet, or you can have a mix of both, for example where a third party provides access to software from their own external physical or virtual servers.
- A true cloud contact centre solution radically reduces the need for both hardware and software, whether run on-premises by the contact centre operator or hosted by a third party. Because the physical assets required to set up a contact centre are transferred to the internet, all you need in effect are computers, phones and an IP connection, with no need for any of the advanced routing or networking architecture associated with contact centres, or any software installed in a data centre.
- A hybrid contact centre solution involves any blend of a cloud-based service with elements of either a fully owned or hosted on-premises solution. Typical examples might involve a contact centre operator choosing to run their own telephone PBX on-premises, but adding functions like call recording or reporting as a cloud-based solution.
Weighing up the factors
Many different factors influence a business’s decision when it comes to choosing a contact centre solution. These include the size and structure of the business, financial arrangements, the specific role and organisation of the contact centre, modes of communication catered for, in-house IT expertise, attitudes to digital transformation and so on.
On-premises deployment has traditionally been viewed as a safe option, especially for large, single-location call centres which focus purely on telephone communication with customers. The larger the number of agents you have operating from a single location, the more cost effective it becomes to purchase your own equipment to run on site. From a single site, you don’t have the added cost and complexity of routing calls between different locations, and the operator has the assurance of being in full control of their own assets.
However, once you start to adjust any of these variables, the case for an on-premises, fully owned solution starts to weaken. For smaller contact centres, when you remove the economies of scale associated with bulk purchases, the OPEX model of a cloud solution, or any kind of lease hire managed service, quickly looks better value than outright capital purchases.
For any kind of distributed business structure, with several contact centre locations operating together, the ease and cost-effectiveness of the cloud quickly becomes apparent for businesses of all sizes. By comparison, whether based on ownership or a hosted service, an on-premises solution across several locations creates complexity and adds costs because of the routing and networking requirements, not least with ongoing maintenance of the system.