Jun. 30, 2025
What are the main differences between on-premise and cloud contact centers? Location and lift.
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On-premise is the traditional setup for a contact center. All the required hardware, software, and infrastructure are housed and maintained at a physical location. A business running an on-premise contact center, which might be one server or multiple servers located in a suburban office building, is responsible for managing, upgrading, and securing that entire operation.
A cloud-based contact center, on the other hand, is operated entirely online, with a third-party provider hosting its technology and infrastructure. Companies access cloud contact center services via the internet. This arrangement allows for more scalability and flexibility, less upfront costs, as well as easier updates and greater remote work capabilities for contact center staff.
Choosing which type of contact center makes the most sense for your business can be tricky, as both setups have advantages and disadvantages to consider. To help you with your decision-making process, let’s dive deeper into some of the key differences — and similarities — between on-premise and cloud contact centers.
Let’s focus first on the on-premise setup, which is the traditional model for contact center operations, and its pros and cons.
On-premise call centers and contact centers, also sometimes referred to as premise or legacy contact centers, are hosted and managed by a company for its own exclusive use.
The company owns the entire infrastructure, including hardware and software. It also owns the data. It might host the entire operation in its own data center or in other real estate, which might be owned by the company or leased from a third party.
On-premise call and contact centers have three clear advantages for businesses.
Companies have full control over the design, features, and workflows of their on-premise contact center systems, allowing them to customize everything from call routing and IVR (Interactive Voice Response) menus to integrations with internal tools like customer relationship management (CRM) systems. This flexibility ensures that the contact center operations are in harmony with business processes.
Companies also control the data generated by their on-premise contact center operations. Data privacy and security are enhanced with the on-premise setup because the data is hosted internally. Businesses can implement their own security measures, such as encryption standards, data storage policies, and compliance protocols, which is particularly important for industries with strict regulatory requirements like healthcare or financial services.
A company that chooses the on-premise contact center approach will be well-positioned to make the most of its current technology investments, like databases, CRM systems, and call center management tools. This creates benefits such as:
The ability to integrate with existing infrastructure helps businesses optimize both their existing resources and the performance of their contact center operations.
The long-term administrative costs of operating an on-premise contact center or call center can be lower than those typically associated with cloud-based setups. (Whether the physical premises for the contact center are owned or leased by the business factors into the overall cost equation, of course.)
Another advantage of operating an on-premise contact center is the reduced need for ongoing expenditures since the equipment is typically purchased upfront. In contrast, most cloud contact center operators charge users an annual subscription fee for software.
On-premise contact centers can have higher upfront costs than cloud contact centers. In addition to investments in hardware, software, and other equipment, there are real estate costs to consider. Construction costs have risen considerably in recent years, and even the costs associated with taking over existing premises can be steep, especially if renovations are needed.
In cloud contact centers, the responsibility for maintaining hardware and upgrading software is the operator’s, not the user’s. In contrast, the entire responsibility for maintenance of on-premise contact center equipment, vendor relationships, and software upgrades is the responsibility of the owner/user.
Business continuity is one of the greatest risks of operating on-premises contact centers versus cloud contact centers. A physical call center can be sidelined by a natural disaster, like an earthquake or flooding, or a problem at the facility, such as a fire. The risk of downtime can be mitigated by operating contact centers in multiple locations to create redundancy; however, that’s costly, too.
Next up, let’s look at the potential upsides and downsides of using a cloud-based solution for your call center or contact center.
Cloud contact centers, also known as hosted contact centers, exist in the cloud. The cloud is a global network of servers that store data, run applications, and deliver services, such as contact center operations, via the internet. Cloud contact centers provide users with access from anywhere as long as they have an internet connection.
Cloud contact centers typically have lower upfront costs than on-premise contact centers because they don’t require expensive physical facilities or hardware. A contact center operation can also be implemented far more quickly in the cloud, sometimes in as little as 72 hours. On-premise contact centers sometimes take months to bring online.
Cloud contact centers allow businesses to scale up and down more quickly than on-premises contact centers. Users can contract for more or less service based on need and even seasonal demand.
Users of cloud contact centers face less pressure to upgrade systems. Regular upgrades, patches, and support are routinely conducted by the cloud contact center service provider. This arrangement also gives users access to advanced features and functionality and the latest innovations.
Cloud contact centers are often targeted by malicious hackers and other bad actors operating in cyberspace. According to PwC’s Global Digital Trust Insights survey, cyberattacks on cloud services are the top concern for business leaders, including in healthcare, where cyberattacks are more costly in dollar terms than any other industry.
Users of cloud contact centers don’t have control over call center operations so they are very much dependent on their service provider. Even so, according to research and advisory firm Metrigy, more than 58% of businesses in North America have adopted cloud contact center services from a third-party service provider.
Lastly, the very infrastructure that makes cloud contact centers so attractive to businesses can also be a disadvantage. Cloud is reliant on internet access. If internet service is disrupted for any length of time, customer service can be disrupted — and that can lead to financial loss and reputation damage for a business.
Whether you choose an on-premise or cloud setup for your contact center, you will want to deploy robust and reliable technologies that will complement your operations. Doing so will help to create efficiency and ensure a superior customer experience (CX).
Invoca’s conversational AI platform, for example, integrates seamlessly with on-premise and cloud platforms and provides features and options like the following to help businesses optimize their contact center operations.
Invoca uses intelligent call routing to transfer incoming calls to the right agent or department every time, even across multiple call centers. The technology assesses various factors, such as the caller’s location, the nature of their inquiry, and their previous web interactions. By using this information to direct calls appropriately, Invoca helps companies cut down on transfers and answer inquiries faster.
Invoca’s Interactive Voice Response (IVR) software allows call center operators to create human-like voice interactions to greet callers. It also helps to shorten call handling and hold times by allowing callers to self-route to the best location or agent.
Invoca’s software can be configured in minutes without coding or IT assistance. It works with any system, and you can use it to set up customized IVRs for multiple locations. Even better: It allows you to handle a large volume of calls and maintain high service standards without needing to scale your workforce proportionally.
Once a customer’s call has been routed to the right contact center agent, that agent can use Invoca’s conversational AI tools like PreSense to create a VIP experience for the customer. PreSense captures insights from callers’ pre-call digital journeys and packages that data in a convenient screen pop, equipping the agent with much of the key information they need to handle the call effectively.
The detail PreSense provides might include the caller’s name, which product page they visited before their call, and whether they have an item sitting in their online cart. This information allows agents to take a more personalized approach to every customer call.
Invoca’s AI also helps behind the scenes in call centers on-premise or in the cloud by automating many of the time-consuming administrative jobs previously handled manually by call center managers, such as quality assurance (QA).
Invoca’s ability to quickly and accurately analyze and score conversation data at scale means call center managers can conduct QA based on 100% of calls, not just a small sample. This not only results in much more accurate QA, but it also allows agents and managers to get insights from calls faster as well as analyze complete calls.
Invoca’s AI-driven technology helps ensure optimal handling of every caller interaction, underscoring why conversation analytics is a must-have for any call or contact center operation, whether it’s on-premise or in the cloud.
As you continue your research to determine which contact center setup is right for your business, on-premise or cloud, consider reviewing these additional resources from Invoca:
To learn more about how Invoca’s conversational AI tools can help you run a standout contact center operation in any location, contact us today to set up a customized demo.
All businesses need an effective and reliable communication system. For most companies today, this means a cloud-based system that works via the internet.
The flexibility and scalability of cloud-based systems make them an attractive choice for businesses of all sizes, from small businesses on the go to enterprises that run call centers.
But is it the best choice for your business?
In this post, let’s take a closer look at the pros and cons of cloud-based phones to help you make an informed decision.
But if you’re pressed for time, here’s all the information you need at a glance:
A cloud-based system uses Voice over Internet Protocol (VoIP) technology to connect calls.
Unlike legacy technology, such as landline phones, VoIP phones don’t need any special hardware or infrastructure. There’s no reliance on copper wire networks to make or receive calls like traditional landlines. All you need is a high-speed internet connection to make VoIP calls.
This makes it easy for businesses to start using cloud-based systems and enjoy advantages like lowered monthly running costs, better mobility for remote work, and hardly any maintenance.
Let’s dive deeper into the benefits of using a cloud-based system in the next section.
Cloud technology is increasingly the norm, which affords many benefits for businesses. From flexibility to remote work perks, these systems are changing the game in how employees connect, collaborate, and communicate.
Let’s look at the upsides that make cloud-based systems a smart choice for growing businesses.
Cloud-based systems are more cost-effective compared to traditional systems.
On average, a landline system costs businesses $50 per line each month for local or domestic calls. In contrast, VoIP plans start at less than $20 per line per month with international calling, video conferencing, and many other features.
Cloud systems are an effective way to trim communication costs. All you need is a stable internet connection and software that enables VoIP capabilities.
This means you can cut down traditional -related expenses that you would have otherwise incurred, such as:
With VoIP, you get free local numbers, toll-free numbers, and inexpensive international calls. A traditional landline can never give you the same bang for your buck.
A cloud-based system is a great safety net for your business continuity plan — especially when something unexpected, like a natural disaster or a cyber attack, disrupts regular operations.
Your business could face downtime and risks with a traditional system based in one location. In contrast, a cloud-based system operates from remote data centers with built-in backup and redundancy plans. If one data center has an issue, others take over seamlessly.
This helps your business keep running smoothly, and your customers won’t be affected. Their information remains secure and readily available to your team, so you won’t lose connectivity.
Cloud systems can thus offer reliable backup and consistent performance, helping your business stay up and running even during unforeseen challenges.
It is also a more dependable choice for everyday business operations. It is less prone to disruptions because there are fewer critical points that, on failure, would impact the service. This reliability makes it a solid bet for uninterrupted business-as-usual activities.
If you are looking for more details, kindly visit Cloud Call Center.
Your system shouldn’t get in the way of growing your business.
With a traditional system, adding scale can be time-consuming and expensive. You’d need to add new lines and ports to give each new employee their number, which can take weeks. That’s a lot of productivity lost.
With a cloud-based system, you can expand your business anytime. It scales to accommodate your team’s growing needs while keeping all your business communications running seamlessly.
Pro Tip: If you want to increase employee collaboration and productivity significantly, try swapping your traditional systems with a virtual service!
Maintenance is an unnecessary overhead that can negatively impact employee experience. And the effort and investment required for maintenance can quickly add up.
Legacy systems need at least one or more individuals dedicated to looking after the system’s upkeep. Most companies either end up overburdening their already swamped IT teams or spend more money to hire outside contractors.
Besides, companies fail to account for the time and effort spent troubleshooting malfunctions and conducting repairs. Not only does this impact employee productivity and morale, it also slows down business growth.
Instead, when using a cloud PBX system, your VoIP provider expertly handles all these hassles. They manage the system entirely off-site on the cloud and ensure uninterrupted service on priority.
Additionally, they provide stringent service-level agreements (SLAs) and round-the-clock customer service to expedite issue resolution. And all this without disrupting your team’s tasks or the quality of business communication your customers expect.
Cloud-based systems offer state-of-the-art VoIP features that enhance business communication. Some popular features business owners deem valuable include:
Clearly, cloud-based systems have advanced features that can level up your business communications. Besides, access to features helps your team communicate with customers better, constantly improving customer service quality.
Especially if you run a call center, cloud-based systems help you operate it with confidence. You can also integrate your system with third-party tools like CRM or accounting software, building a centralized repository for your team.
The best part? A great service provider will let you add new features without hardware updates, complicated requests, or confusing jargon. You can tailor your cloud system as and when you need it, to suit your evolving business needs.
Customers today have moved on from being price-sensitive. In fact, they don’t mind paying a premium for excellent customer experience. Moreover, they are more likely to purchase products and services from these companies in the future.
Recent customer service statistics confirm this:
Cloud-based systems offer businesses enhanced flexibility, scalability, and accessibility to ensure a positive customer experience.
Customers never have to wait due to the efficient management of call volumes, which redirects calls to the next available support team member. Customer information readily available to service agents results in a more personalized interaction, impressing customers.
Besides, cloud-based providers also let service agents work from anywhere, providing uninterrupted support quickly and efficiently. After all, knowledgeable and happy customer service agents often mean happy customers!
Speed, quality, and perceptions of customer service modernity can be at risk when large businesses continue to use traditional landlines.
The hybrid work model – a few days at the office and a few days of work from home – is now the new normal.
For businesses still using traditional systems, this is a two-fold issue. First, they have to maintain the existing infrastructure at the office. Second, they have to spend time and resources to empower their remote workforce.
This includes providing employees with the right tools and all the customer information they need to do their jobs efficiently.
Cloud-based phones are perfect for this use case. Remote work features are available out of the box without a complicated setup. Your team can use VoIP desk phones at the office and a business app when working from home. It is the best of both worlds!
No matter their work location, everyone on your team can:
Cloud-based systems make it easy to centralize all your business communications on a single platform, without changing existing infrastructure or telecommuting technology.
This solution, called Unified Communications as a Service (UCaaS), encompasses calls, video conferencing, instant messaging, conference calls, and file sharing.
UCaaS improves productivity and collaboration between on-site employees and remote teams. Everyone has access to the relevant communication tools they need for their day-to-day.
Cloud services accelerate employee onboarding and simplify virtual meetings. It removes the barriers and silos associated with older communication systems like traditional phones, which often lack any of these advanced features.
While cloud-based systems have several cons, no technology is flawless. There are inherent challenges that might be of particular interest to your business, making cloud-based systems less attractive as an option.
Here are the potential downsides that come with running your business system entirely over the internet.
Cloud-based systems today often charge on a per-user monthly basis. Over time, these costs can add up.
You may be charged for add-on features you don’t even intend to use or incur metered prices for other features you heavily use. For small businesses, subscription prices might be steep compared to simply using existing traditional lines.
However, most cloud-based systems today come with built-in collaboration tools. This eliminates the need for costly collaboration tools such as Zoom, Slack, or separate conference bridges.
Besides, you also save on time and money spent on IT support, repairing system issues, and ensuring security and compliance, to name a few.
All these benefits can offset the monthly cost of cloud-based systems, making them more cost-effective than seemingly cheap traditional phones.
If you’re still unsure about how much Nextiva’s cloud-based system will cost your company, you can request a no-obligation price quote.
Cloud-based systems need high-speed broadband internet connections.
Cloud-based systems use Wi-Fi to function, but Wi-Fi doesn’t work well through walls. If your office hasn’t conducted a wireless site audit, you might have some dead spots.
But there are easy fixes and affordable solutions for this problem. You might need to set up Quality of Service (QoS) for your network to prevent jitter.
For larger offices, consider adding a mesh Wi-Fi network for maximum speed and coverage.
One thing can make or break all the benefits of moving your system to the cloud — your internet connection!
If your internet connection fails, your cloud-based system could cease to work. And yet, a reliable internet connection is the only system requirement for cloud-based systems.
But today, stable internet is everywhere! Almost every cafe gives you strong enough Wi-Fi for video calls and streaming.
Over the past decade, internet speeds have increased, and so has its reliability. It is common to see 100+ Mbps speeds at home or work. This bandwidth could support more than 1,000 VoIP calls at once!
If you’re not sure how reliable your internet connection is, you can take our free VoIP capacity test to see if your network is ready for VoIP.
And if your ISP goes down, you and your team can answer calls automatically on your cell phones or get forwarded to a voicemail box for follow-up. There’s basically never a “busy signal” with cloud-based VoIP.
If you don’t have another internet connection, call our support team, and we can handle these urgent requests.
This won’t be an issue for most people, but internet-based calls to 911 don’t necessarily have accurate location data attached.
When internet-based calls are directed to an emergency call center (known as a PSAP), operators may not know your location or number. By default, calls arrive at the nearest PSAP based on the account holder’s address.
To overcome this, update your cloud system’s fixed address assigned to each business line. This setting is known as Enhanced 911 and you should become familiar with. When employees work from home or away from the office, you should update it promptly.
We recommend using smartphones for internet-based calls as GPS data and cellular triangulation pass location data instantly to nearby PSAPs.
If you love traditional equipment like fax machines, you won’t really get excited about cloud systems. This equipment was in its prime in the 90s, but its time is limited today.
It gets tricky if you need PSTN connectivity between your security systems or gates, so you might need to use an analog adapter or an “ATA” for short. Conversely, cellular connectivity for these services is also widely available and has solid reliability.
We’ve seen our fair share of successes when companies upgrade to the cloud. It can be a bit intimidating, but with a little planning, you will be very successful.
Moving your office system to the cloud will bring benefits that a traditional landline can never match. The pros outweigh the cons.
Here are a few action items to make your migration to the cloud go smoothly.
When choosing your business communication system, there is a lot at stake. Cloud-based systems provide the right flexibility, scalability, and capabilities you need for a growing business.
But choose the right partner in your journey to cloud-based systems. This will ensure a smooth transition to the cloud, optimized performance, and a more reliable experience for your customers and employees.
The company is the world’s best Two-Way Communication Service supplier. We are your one-stop shop for all needs. Our staff are highly-specialized and will help you find the product you need.
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