Cloud Contact Center vs. Hosted: What’s the Difference?

Small- and mid-size businesses must make smart choices about their contact center type and provider. Having the correct contact center setup will ensure great customer service experiences while eliminating excess technology costs that could slow your business growth. 

In this article, we’ll walk you through the differences between cloud and hosted contact centers to help you make the right choice for your customers and your business.

What we’ll cover: 

• What is contact center software?
• What is a hosted contact center?
• What is a cloud contact center?
• What are the cost and maintenance differences?
• Why on-premises contact centers are bad for business?
• How to migrate from a hosted contact center to a cloud contact center?

What is Contact Center Software?

Before we find out what a hosted and cloud contact center are, it’s important to clarify that both models run contact center software.

Contact center software is an omnichannel platform that allows your customers to communicate with your business in multiple ways, including phone, email, web chat, video chatting, text messaging (SMS), and social media. On your end, the contact center software captures all these contact channels in one software platform. 

Depending on the software provider, you also may have API access for other software integration, and dashboards for supervisor control.

Now that we know how hosted and cloud contact centers are similar, let’s learn more about each model and understand how they are different.

What is a hosted contact center?

A hosted contact center  is a communications solution hosted at your service provider’s physical location instead of on your premises. 

With a hosted contact center, your service provider’s physical location becomes the epicenter of your IT infrastructure, meaning that your agents only need their laptops, headsets, and an internet connection to be effective.

It is important to note that it is still possible for companies to carry significant IT costs and responsibilities in a hosted contact center model, such as updating, patching, and tweaking your contact center software and its integrations. 

What is a cloud contact center?

A cloud contact center moves beyond the hosted contact center model to fully leverage the capabilities of cloud computing. There is no need for direct network connections or client-side infrastructure; virtual servers are used, along with Voice over Internet Protocol (VOIP) for calls. 

Plus, there are no dedicated physical servers. Your company will have access to the full range of available server space when needed, allowing you to scale up in high-demand periods without carrying excess costs during less-busy times. And because you aren’t tied to physical server locations, you enjoy a level of business continuity resilience that on-premises and hosted contact centers do not offer.

What are the cost and maintenance differences between hosted and cloud contact centers?

While hosted and cloud contact centers will both save you money over the traditional on-premises model, it is essential to understand that they come with different fixed and maintenance costs.

Hosted contact centers relieve you of onsite server hosting, but you are still tied to physical servers. Suppose you have migrated from legacy on-premises software that were not originally designed to operate in hosting environments. In that case, you may expect to have dedicated resources on your IT team ready to deal with ongoing maintenance, patches, and adjustments.

But, hosted contact centers can be less resilient since they do rely on specific servers and direct network connections. 

Cloud contact centers, on the other hand, avoid this problem by provisioning you access to whichever virtual servers are online and functional.

Why On-Premises Contact Centers Are Bad for Business

For a long time, companies were forced to operate physical ‘on-premises’ call centers to support their customers. This could present real cost challenges to growing businesses because it requires serious investments in real estate, IT infrastructure and staff, PBX phone systems, etc. 

Not only was this model expensive, but it also was virtually impossible to scale up or down quickly to meet sudden changes in demand, such as increased call volume. And it left company contact centers exposed to business continuity risk in the event of natural disasters or other localized events. This led to the evolution of both hosted and cloud contact centers.

Migrating from a hosted contact center to a cloud contact center

If you are considering upgrading from a hosted contact center to a cloud model, there are a few key things to keep in mind.

First, your cloud center software will no longer be running on dedicated physical servers. Cloud architecture and security present different challenges than traditional network security. Your IT team may need training or outside expert advice to ensure they are equipped to operate in a fundamentally new model.

You will also want to understand your deployment options. While a hosted contact center has already removed you from the traditional on-premises environment, you may still be operating elements of your contact center at your physical office locations. Make sure to evaluate how to best leverage the cloud’s flexibility and scalability features to save the most money in the long term.

Finally, make sure you understand that not all hosted or cloud contact center solutions are alike. You may find that your current operating model matches most closely to the Contact Center as a Service (CCaaS) cloud platform, in which customer services and sales professionals are the primary team members leveraging your call center technology. 

But you may want to use your migration as the opportunity to switch to the broader Unified Communications as a Service (UCaaS) model, in which you unite all of your business communication tools across the firm and greatly enhance your collaboration capabilities.

Next Steps to Upgrade Your Business’ Contact Center Ecosystem

Hosted and cloud contact centers will offer significant cost and scalability advantages over the legacy on-premises model. Evaluate both models carefully to determine the best fit for your business. 

If you’re ready to evaluate contact center solutions that will fit your business, reach out today to book a demo or talk to an expert.