On-Premise Vs Cloud Call Center: Which one is better?

There are two types of call center software available On-Premise Call Center and Cloud Call Center.

Call Centers alone can solve many challenges for businesses, leaving you free to work on other operations. However, choosing the type of call center is no easy task.

They handle all calls to their software, hardware, and networks. And, it is all about buying, evaluating, installing, and operating systems. However, when companies choose a cloud-based contact center, they have the advantage of not investing in the full purchase and management of local servers in their locations.

When it comes to cloud-based customer service system integration, all they have to do is a partner with a talented team of cloud contact service providers, who will install whole contact center services in a short period of time. Everything from dialers to CRM is in the cloud and agents have full access to contact center services at any time.

Type of Call Centers:

  1. On-Premises Call Center:

    In an on-premise call center, all the hardware and software required to operate the call center is stored inside the company premises. These traditional call centers are a great resource for companies that can invest a fortune to provide the best customer support.

    The on-premise call center may have evolved over the fast few decades from EPABX to IP PBX but the fundamental aspects remain the same. It offers some great options in terms of customization, integration, reliability.

    However, on-premise solution is not scalable as it requires investment to scale the solution and add new users. This is the reason small business owners are shifting towards the cloud call center as they are scalable and flexible.

    These call centers setup is a bit complicated as equipment and wiring is involved. You always need to have an in house expert to maintain the on-premise call center solution while this is not the case with the cloud solution.

  2. Cloud based Call Center:

    Inversely, a cloud solution is the hosted solution whose server is online.

    Cloud call centers typically run using cloud-hosted PBXs. Inbound and outgoing calls are made through a VoIP (Voice over Internet Protocol) Connection. Your customer support agents can make and receive calls through the Internet connection instead of a wired connection.

    Agents using a cloud-based provider can communicate with customers using any device connected to the Internet. They can use personal cell phones, laptops, or desktop computers. If they get an internet connection like 4G or Wi-Fi, they are good to go.

    Cloud solutions are scalable, best fit for small businesses and startups. As everything is going digital, business communication has also evolved and is shifting to the cloud.

Difference between Cloud-based Vs On-premises Call Centers:

The main difference between traditional call centers and cloud call centers is the way they are hosted and operated. On-premise call centers are hosted at the company’s location while cloud call centers are hosted online. Businesses should be aware of the nuances when deciding to invest in the right call center solution since it can impact the business communication and customer experience. We have discussed the difference between two types of call center solution in detail in this post:-

  1. Setup and Running Costs:

    One of the most important factors to consider when choosing the call center solution is the setup cost.

    Traditional phone systems are usually expensive as you need to buy equipment and maintain servers in the office premises to run the call center. You also need an in house expert to install and maintain the servers.

    However, cloud-based call centers can save up to 60% of that cost. Because the cloud-hosted PBX system is virtual. You don’t need an engineer to install any equipment, or split out the expensive cost for a desk phone.

    Cloud contact centers can be set up remotely and business owners can even convert their on premise call centers to be used as a cloud.

    Related Article: here is the complete guide on how you can convert on premise call centers to the cloud.

    Virtual phone numbers that come with your Virtual Call Center make it inexpensive for your customers to call you. There are no huge international calling rates; they are only using an internet connection to call you.

  2. Installation time:

    On site call center may require a month for the complete setup. From buying the equipment, installing server in the premises, sorting out licenses and setting up the infrastructure, and then configuring the call center software.

    However, cloud call center software is online. You don’t need an engineer to come to your office and set up your virtual call center.

    You can also start using the zero infrastructure mobile call center right away, your agents have to just download the app, register there and your agents can start calling.

  3. Maintenance:

    The concept of maintenance sounds unaccommodating for many people, but it is as important as setting a new call center. It’s not because call center software will change but because technology will be updated.  

    In case of on premise call centers, maintenance is required because the wiring and physical servers are involved in this. Ensuring uninterrupted call center operations is important that requires a healthy check up on servers, data & other components.

    IT expert is required at the server site for maintaining on premise call center and if equipment found to be malfunctioning or faulty during the onsite health check up then it has to be replaced which is a costly process.

    Inversely, in the case of cloud call center maintenance can be easily done remotely as cloud contact center is hosted online. Virtual call center can be easily maintained and server health checkups can be done remotely without the need of agents being present at the company location.

    Cloud call center service providers are responsible for providing system and server health check up quarterly or half-yearly to ensure the smooth functioning of clients call center.

  4. Agent Productivity:

    There is only two reasons why businesses start using call center and that is – to have better customer experience and grow revenue.

    Both goals can be achieved only if your agents are productive and performing. Both the call centers software – on premise and cloud call center are developed to provide the best value to the company in terms of the agent’s productivity. Technology keeps on updating just to give better options to agents, managers, and owners.

    With changing work ethics and culture, employees expect to have solutions which give them flexibility like work from home, or the new trend work from anywhere.

    The cloud call center is efficient and well equipped to allow agents to work from anywhere, agents don’t have to stick to their work stations while working. They can attend and make calls from anywhere with mobile cloud call center application which allows to set up a call center on mobile without investment.

    Read more about setting up a mobile call center without any investment.

  5. Scalability:

    Organizations are tapping into the power of customer experience and customer focus is also moving towards the increasingly connected future by providing omnichannel customer experience .

    To be at top of customer service, organizations have to always hire new agents, for new agents new setup is required every time. If you are using on site call center solution then scaling up is a bit difficult as overhead costs are involved.

    In premise based call center, you need to buy a new IP Phone, configure the server for adding a new agent while in the cloud call center you just have to subscribe for one more agent by paying the monthly or yearly charges for one agent.

    Cloud call center providers will configure the server for a new agent and the agent will have to just download the mobile application or the software to start working.

    While scaling up, cloud call center has an edge over the traditional phone system in terms of cost, and ease of scaling up as a cloud call center can be set up in few minutes while on premise call center takes time to get configured.

  6. Reliability and lost time:

    Businesses still believe that traditional phone setup is more reliable in terms of voice quality and latency. It’s true that on premise call centers are potentially more capable of providing good call quality but it comes with other risks such as hardware breakdown, IP PBX compatibility issues with the software. All these issues take time to get solved at a technical level and sometimes you may need to replace your hardware as well.

    Both processes of resolving the compatibility issue and replacing the equipment are time taking which can cost your business in terms of revenue, lead loss & bad customer experience.

    Cloud communication has only one requirement to function smoothly that is a strong internet connection. Cloud call center solution is immune to a hardware issue and service providers also ensure the system’s immunity towards technological failure.

    Today, you can rely on cloud communication as it provides 99% uptime and ease of operations in terms of integrations, compatibility, and scalability.

  7. Secure the system from hacking:

    VoIP threats are increasing at an alarming rate. Business owners are also concerned about hacking practice as even a single attack can create a deep hole in their pockets.

    Related Article: Common VoIP Security Threats

    On premise call center solution is considered as a secure option because the server is located in the office premise itself. It is a myth, yes on premise call center are more secured then cloud call center is a myth.

    Because major data breaches are due to human error or intentional animosity and premise based phone system is more vulnerable to this.

    Cloud despite being having a bad reputation in terms of security, cloud solution providers keep their customers a step ahead of security threats.

    Cloud solution providers make sure that their security teams are constantly testing and working on the system to tackle any security threat.

    Another advantage is that you can call your cloud solution provider any time in case you sense something wrong with the system. They have 24/7 technical support to serve customers and VoIP threats can be tackled remotely.

  8. Flexibility for mobile Teams:

    According to a study by buffer 44% of employees say that part of their team is full-time remote

    The moment corona stepped in, the business felt a shift and started moving towards the pajama principle that is work from or remote working.

    We are living in a world that’s slowly changing from office work culture to work from home culture. In this changing work culture, we need technology to support customer representative agents.

    Cloud call centers are the perfect solution for call centers as they allow businesses to operate from anywhere. On the other hand, on premise phone system only allows agents to work from office premises.

    Cloud setup just need stable internet connection and software or application to start working.

  9. Collaboration:

    The collaboration of call center software with other tools brings out maximum productivity and helps agents to work with the team. Collaboration tools project management tool, time tracking tools, and data management tools, etc.

    The know everything environment makes collaboration more important and relevant as it improves the kinship between your phone system and the tools.

    Collaboration tools become more important due to cultural, technological, and societal shifts in the work culture. Cloud call centers are fully integrated with real-time dashboards and real-time monitoring helps managers to keep track of the agent’s productivity.

    Transparent process with real-time feature of these tools makes it easy for managers to provide support to agents and monitor their performance. Even, if required, managers can shadow the call and jump in between the call when necessary. Agents also have the option of transferring the live call at any point in time effortlessly.

  10. Integration:

    Business communication and integration tools are intersecting and they are proliferating in call centers. So, integrating with advanced tools is important for any business to grow their revenues and improve customer experience.

    We can integrate software and tools with type of call centers – cloud call centers and on premise call centers.

    Integrating tools and software with a traditional phone system is possible but licensing and installations take a lot of time and effort. Implementation takes a lot of time and effort that can be possibly used in other valuable business activities.

    Cloud solutions are designed to keep technological shift in mind and they can be easily integrated with other tools and solutions like CRM, SMS, ERP, whatsApp and help desk software, etc.

    This easy integration makes life easy for managers and agents as well as improve customer experience.

  11. IT Staff Reliance and Redundancy:

    Traditional phone systems require a proper IT team for maintenance and Software updates. These systems are complex and have wiring involved so a qualified team is required to maintain the whole system which obviously comes at additional cost.

    There are other costs and complexities involved with onsite systems such as data backups and redundancy procedures. There are chances of downtime in case of equipment breakdown or wiring damage which can be costly for the business. Other than this infrastructure costs are also there with an onsite system as the server setup requires large space.

    Shifting your business to the cloud is equal to preventing a potential business risk. Cloud providers will eliminate many of your concerns like server maintenance, downtime, and hiring an IT team. Your business will run on other servers and the solution provider is responsible for the upkeep of servers.

    Cloud can save you a lot of money in terms of setup cost, maintenance cost, hiring staff, and monthly telephone bills.

  12. Customer Channel Preference:

    The goal of a call center is to solve its customers’ problems. You want to make it easier for them to get in touch and solve their problems. This makes a great customer relationship.

    When choosing to use a cloud-based or on-premises solution, it is important to think about the communication channels your customers prefer.

    More than 70% of customers believe that speed resolution is the best thing to measure of the good service. Simply, they want to solve their problems faster and don’t want to wait for the agents to answer the phone.

    With an On-premise call center, you don’t have access to key features that enable faster resolution. If you can’t transfer calls easily and the agent is away from their desk, the line going to their phone will go to voicemail.

    Cloud solutions can also function remotely and agents can easily attend and make calls even if they are not in the office. The other benefit of cloud systems is its integration capability with other communication channels such as WhatsApp, SMS and chatbots.

    Overall, cloud solutions provide mobility to the agents and increase their productivity.


Which one is a better call center solution: Cloud Solution or onsite solution? It’s a debate as old as time, and the subject will continue to be debated for many years to come. Questions will always be the same in case of a cloud call center and on-premise call center solution because both the solutions have pros and cons. It depends on the business type that which solution suits them best.

What’s your take on the same? Let us know in the comments below