They manage emails, calls, chats, and every other form of communication between the business and its customer base, handling everything from everyday queries to complex issues. But regardless of the experiences they create for customers, having the right setup that suits the business can mean the difference between success and failure.
Which begs the question: should you stick with old-school, on-premise setup, or modernize to a cloud-powered upgrade? Let’s have a look at the difference and see how each one can suit your business needs differently.
What is an On-Premise Contact Center?
An on-premise contact center is exactly what it sounds like: all the hardware, software, infrastructure, and team are physically located at the company’s office. It’s understandable why as many as 55% of businesses rely on traditionally managed on-premise systems: it means everything you need to run your business is under one roof, giving you full control and visibility over the entire operation.
Key features of on-premise contact centers
- Custom fit: Tailor the system, processes, and setup to fit your unique needs.
- Your tech, your rules: You’re in charge of the hardware and software, and everything else that comes with it.
- Local data storage: All important data, like customer information, stays in-house, so no need to risk data sharing breaches.
- High security: You get to control how sensitive data is locked up, giving you full security control.
Advantages vs disadvantages
| Advantages | Disadvantages |
| Full operational control | High up-front investment costs for hardware and software |
| Customizable system tailored for your business | Added costs for extra hardware during growth |
| High security with on-site data storage | Maintenance team requirements for tech updates and fixes |
What is a Cloud-Based Contact Center?
The complete opposite of their on-premise counterparts, cloud-based contact centers are fully remote. In fact, as many as half of companies in a recent study have moved to Contact Center as a Service (CCaaS).
Think of them as customer service teams that live on the internet – no hardware or server rooms are required, just a strong internet connection and the right tools to make it work. Remote teams can be based anywhere in the world, and with sophisticated contact center tools on the market, it’s an easy plug-and-play solution for your business.
Key features of cloud-based contact centers
- Internet-based: Everything works on your web browser – no fancy equipment needed.
- Work from anywhere: Whether your team’s in the office, at home, or on the beach, they simply get connected and they’re good to go.
- Easy maintenance: Service providers take care of ongoing upgrades and updates so you don’t have to.
- Easy scaling: The system can easily grow, or shrink, along with your business needs, so no need to invest in extra hardware to handle higher call volumes.
Advantages vs disadvantages
| Advantages | Disadvantages |
| Full flexibility to add new teams, features, or scale | Heavy reliance on solid internet connection |
| Low upfront costs with pay-as-you-go plans and subscription models | Data lives on the provider’s servers which can be questionable for strict privacy rules |
| Quick setup and easy onboarding | Dependency on the vendor for additional needs |
Key Differences Between On-Premise and Cloud Contact Centers
The differences between on-premise and cloud-based contact centers are like night and day. Everything from the technology they use to the investment needed, each one has its positives and negatives.
1. Infrastructure
With an on-premise setup, you own everything, giving you full control over operations – as well as handling the continuous maintenance. With cloud-based, on the other hand, you ultimately implement it and forget all about it, as the provider handles the bulk of the effort. Here are some key differences between the two:
| On-premise | Cloud-based |
| Everything is yours: Servers, software, hardware, infrastructure and everything in between is owned and managed by you, in-house. | No hardware hassle: All the infrastructure is in the cloud, making it a space-saving option. |
| DIY maintenance: Any issues can be handled by your on-site IT team. | Work from anywhere: Teams can work from home, anywhere in the world, with easy system access over the internet. |
| Space inefficient: Equipment isn’t small – be ready to dedicate significant room to your hardware. | Easy upkeep: The software provider does the heavy lifting when it comes to maintenance, allowing you to focus on operations. |
Key takeaway
On-premise solutions give you the reins when it comes to owning your own hardware and managing its maintenance, but it comes with added responsibilities and dedication. Cloud-based solutions are much less hassle – you can travel light, with no server rooms and much less manual upkeep.
2. Cost considerations
More often than not, cost is the elephant in the room for most companies when investing in new software. And the difference between on-premise and cloud-based solutions is generally a one-time payment versus a pay-as-you-go plan. Here’s how they differ cost-wise:
| On-premise | Cloud-based |
| Big initial investment: Hardware, software, and installation fees can often be heavy on the wallet. | Budget-friendly: Much lower upfront costs with either a monthly or yearly fee based on business needs. |
| Ongoing costs: Hardware and software require constant maintenance, repairs and upgrades, which need to be budgeted for. | Pay-as-you-grow: Many solutions allow for easy, cheap scaling with the ability to add users and features as needed. |
| Scaling leads to spending: Growth means expanding capacity, which leads to splurging for new hardware. | No hidden fees: Providers take care of maintenance and upgrades, which means no unexpected costs. |
Key takeaway
While on-premise might be the more costly option initially, it provides more autonomy over upgrades and maintenance. But cloud-based services keep things light and predictable with subscription-based payment models. It all depends on whether you’d prefer to spread out your costs, or get them over with all at once.
3. Security
Both on-premise and cloud contact centers have their own ways of managing security. It’s basically like choosing to keep your valuables in your own safe, or trusting an outside security company to do it for you. Here’s the difference:
| On-premise | Cloud-based |
| Full control: Everything is stored in-house, meaning you’re the sole guardian of all sensitive data – you choose the locks and alarms, and monitor it yourself. | Provider-managed: Cloud providers handle everything from encryption to monitoring and compliance, and everything in between. |
| Custom security processes: You can easily implement strict access policies or encryption to improve security. | Shared responsibilities: While the provider manages infrastructure and security, you still need to take care of access credentials and best practices. |
| Possible vulnerabilities: Without airtight internal security, there’s always the risk of potential breaches and the responsibility is fully on you. | Data location concerns: Some providers operate in multiple countries, which can be cause for concern for some businesses regarding where their data is stored. |
Key takeaway
While on-premise means complete visibility, you’ll need some security know-how to keep things under control. Cloud solutions come with built-in safety protocols, but it can feel like putting your most valuable assets in the hands of an outsider.
4. Customization and control
This is the trickiest part: figuring out whether you want a custom-built solution tailored to your business’ needs, or the ideal tool that you can’t fully redesign to your liking. It completely depends on what you’re looking for, and whether you’re willing to compromise. Let’s compare:
| On-premise | Cloud-based |
| Tailor-made: On-premise means easy customization at your leisure. You can adapt to changing workflows or industry requirements, hassle-free. | Flexibility: Cloud solutions have an array of features and integrations, within the framework of the provider. |
| Full control: Features, configurations, and everything in between are completely under your control. | Quick setup: Most providers are plug-and-play, meaning you can be up and running quickly and easily. |
| Resource-heavy: Remember – the more you customize, the more time and resources you’ll have to invest and maintain. | Less custom control: You might not find the solution that ticks every box you’re looking for. |
Key takeaway
If customization is what you’re after, on-premise solutions are a no-brainer. You can have full control and autonomy over what you use and how you use it, whereas cloud centers come with boundaries on how far they can be tailored – but they are highly flexible in their setup.
5. Scalability
Scalability is a huge factor to consider for any-sized business, whether a small startup or large enterprise. Companies are constantly changing, and having the right infrastructure to manage that is essential for maintaining efficiency. Let’s see how:
| On-premise | Cloud-based |
| Scaling = effort: Expansion comes with investments in hardware and resources, which takes up time and money. | Easy expansion: Cloud setups are the much easier option for scaling, as they simply require a plan upgrade. |
| Physical limits: Your setup can only scale in line with your infrastructure. Once you hit capacity, you need to consider bigger office spaces or additional equipment. | Unlimited space: Everything’s online, so no constraints when it comes to hardware or office space. |
| Seasonal adjustments: Every business has ups and downs throughout the year, which cloud solutions handle with ease. |
Key takeaway
On-premise is a solid option, but can be cumbersome during times of growth as it requires physical effort and investment. Cloud-based, on the other hand, is as easy as flipping a switch.
Which Type of Contact Center is Best for Your Business?
Trying to decide between the two can feel like a huge obstacle, but in reality it’s much easier than it seems. It all comes down to your business’s size, budget, and unique needs. Let’s break it down so you can pick the one that fits your operational needs perfectly.
Business size
Small businesses
Cloud-based contact centers make more sense for smaller teams as they’re lower on upfront costs, quick and easy to set up, and don’t require a huge amount of manpower to maintain. Not to mention they scale easily without huge investment, which is a massive asset to any growing business.
Medium-sized businesses
Medium businesses strike a good middle ground with both types of contact centers. It really depends on what the business is prioritizing: if customization for a niche industry is what they’re after, then on-premise might be their best bet. But if they’re looking for flexibility and remote work options, cloud-based solutions are the go-to.
Enterprises
Larger businesses with higher volumes of sensitive data and specific security needs would naturally lean towards an on-premise solution that they can monitor in-house for total control. Even so, many enterprises are opting for cloud solutions to increase their scalability and global reach across international markets.
Budget
Tight purse-strings
If low cost is the only option, cloud contact centers are a no-brainer. There’s no huge upfront investment and the subscription-based model means you can spread payments out over a longer time period.
Money to invest
If budget isn’t an issue and the resources are there to be used, an on-premise solution might make better use of your funds. It requires a larger initial investment, but if you value long-term ownership, it’s definitely worth it. Just remember that ongoing maintenance costs can stack up.
Predictability vs. control
Cloud centers are more predictable with monthly recurring costs, while on-premise systems can vary depending on upgrades, maintenance, and any issues that may occur. But, they give you full financial control once the initial setup is paid for.
Specific needs
Flexibility
If your team is remote-based, cloud solutions are the obvious option as they offer the ability to add new features and users without hassle. And they’re ideal for businesses with fluctuating demand, like seasonal call volumes.
Control and customization
For any business with strict compliance requirements or highly tailored workflow necessities, on-premise setups allow for custom system design based on your business model and individual needs. Cloud-based systems are still customizable, but you’re bound to the limits of the provider.
Security
Data security is an obvious concern for most companies, and many would prefer to manage it in-house. On-premise solutions give you the peace of mind of having all data and privacy measures under one roof. Even so, cloud solutions still have enterprise-grade security and compliance certifications, making them an equally solid option.
Industry considerations
Healthcare, finance, or legal
These industries have much stricter regulations around privacy as they involve sensitive customer information, leading businesses to lean toward on-premise solutions for total data control.
Retail, e-commerce, or tech
Fast-paced, constantly evolving industries like retail, e-commerce, and tech often require the agility and flexibility of cloud-based solutions.
Making the Right Decision
At the end of the day, the right type of contact center comes down to what your business values above all else. Whether that’s control, customization, and long-term ownerships, or flexibility, scalability, and a quick setup.
It just means assessing your size, budget, and business needs, and working them around your industry requirements. Choosing the right option leads to happier customers and a smooth-running business.
Chat to us today to see how Voiso’s cloud-based contact center software can improve your business.
