On-Premise vs Cloud Call Center Solutions

Call center equipment

By Aimee Bradshaw | Writer and researcher

Software-as-a-Service (SaaS) is taking call centers by storm. But what’s all the fuss about?

It’s 2020, Pluto is back to being a planet again, and the tongue-taste map you learned in school is all wrong. Is nothing sacred anymore?

Well, we hate to break it to you, but even call centers aren’t what you thought they were.

Now, while you process that bombshell, be reassured: call centers aren’t going anywhere.

But they are changing. Traditionally, on-premise call centers were physical locations that housed all the equipment you needed to run a call center from under one roof. However, thanks to the rise of Software-as-a-Service (SaaS), modern call center infrastructure is gradually moving towards a distributed, or ‘cloud-based’ model. Thousands of call centers around the world have swapped pricey on-premise hardware for affordable cloud call center solutions. Most haven’t looked back.

In short, cloud call center solutions are changing call center management for the better. Read on to find out how, or use our free comparison service to request quotes for top call center software solutions.

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On-premise vs cloud call center solutions

Cloud call center solutions offer unrivalled versatility

How is the Balance of On-Premise vs Cloud Call Center Solutions Changing?

In 2014, only 1 in 20 US call center agents were using cloud-based call center solutions.

Today, a conservative estimate is 1 in 4.

And, according to a recent survey of US call center professionals, more than a third of companies with on-premise call centers plan to migrate to the cloud by 2020.

Clearly, modern call center managers prefer cloud call center solutions. But why?

Why Are Cloud Call Center Solutions Winning?

Here are the most important reasons why cloud call center solutions are preferable to premise-based ones:

Convenience is King

With cloud call center solutions, you don’t have to worry about equipment upkeep. All you have to do is pay your monthly SaaS subscription and your supplier takes care of the rest. In practice, that usually means guaranteed service uptime of at least 99.99% and regular software security updates in line with industry best practices.

Analytics are Everything – and Cloud Software Measures it All

Business analytics and call center software go hand in hand. The best cloud-based solutions deliver complex insights about call center performance through easy-to-read dashboards.

By contrast, even the best on-premise solutions can’t hope to match the user friendliness of cloud-based ones. Unlike with cloud-based software, premise-based software developers don’t provide ongoing support. Don’t expect much by way of free updates to the user interface or reporting capabilities.

Costs: The Elephant in the Server Room

When you’re running a business, it’s important to examine costs from all angles. So, what’s the most cost-effective way to run a call center: on-premise or cloud-hosted?

Unsatisfyingly, the answer is “It depends”. Relevant cost factors include:

  • Where your call center is based
  • The number of call agents
  • The level of functionality you need from your software
  • How much you pay for power (on-premise servers consume lots of electricity)
  • How much you pay for office rental (a single on-premise server occupies between 8-10 sq ft, and you may need several)

However, some strong themes emerge from expert research on the topic:

  • The more call traffic you manage, the more economical it becomes to host your call center in the cloud
  • Cloud call center solutions offer better value for money on sophisticated functionality like interactive voice response (IVR) – a cutting-edge speech recognition feature
  • On-premise solutions may be more cost-effective at delivering certain basic features in isolation, like automatic call distribution (ACD)

Expert Tip: Tax Depreciation

There’s another area where costs differ between cloud and premise-based solutions: taxes.

Most fixed assets lose their value over time, and on-premise call center hardware is no different. On top of the costs of replacing the hardware itself (usually every 3-10 years), there are negative tax implications for having lots of depreciating equipment on your balance sheet.

Call center software doesn’t present that problem because you don’t own it; you merely pay for the right to use it. Meanwhile, you’ve avoided thousands of dollars of sunk costs, and freed yourself to invest in something more profitable. It’s a win-win.

If you’re talking about taxes, cloud call center solutions always come out cheaper than on-premise ones.

Nothing beats doing your own digging, so feel free to check out the further reading below for more information. If you’re ready to receive quick quotes for top call center software, all it takes is 30 seconds with our free supplier comparison service.

Further Reading

Cloud vs On-Premises Costs: The Critical Factors Every Exec Needs to Consider

The Total Cost of Ownership of Cloud and Premise-Based Contact Center Systems

Who Makes the Best Cloud Call Center Solutions?


Best for: Outbound Call Management

8×8’s call center software has all the polish you’d expect from an award-winning VoIP provider, and then some. Sales teams love its simplicity; managers adore its versatility. Without a doubt one of the easiest cloud call center solutions to integrate with your existing workflows.

Supplier Rating:


Best for: High-Growth Firms

RingCentral call center software is ideal for firms with one eye on the competition and the other on key performance indicators. If you want help turning operational inefficiencies into business growth opportunities, awesome analytics features make this cloud call center solution more than up to the task.

Supplier Rating:


Best for: Outbound Call Management

We could gush about Mitel’s mastery of drag-and-drop dashboard design all day, but there’s a whole lot more to this software than a pretty interface. A standout suite of call management features makes it perfect in situations when you’ve got several customers trying to get through.

Supplier Rating:

▶ Read more: Top Call Center Software Solutions 2020

Next Steps

When you think about it, the term ‘call center’ is a bit of a misnomer nowadays. After all, what’s ‘central’ about software distributed from the ether to agents scattered across the globe?

By comparison, the constraints of traditional on-premise call centers mean it’s hard to make a case for them in 2020. Cloud call center solutions are the present and the future, and whether you’re refitting your existing call center or opening a new one, there's never been a better time to upgrade.

For call center software quotes, check out our free supplier quotes service.

Aimee profile image
Aimee Bradshaw Writer and researcher

Aimee is Expert Market’s resident telephone systems, point of sale, and field service software go-to. If she’s not writing about business products, you’ll find her daydreaming about Dorset beaches.

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