Cloud vs. on-premise: navigating the future of contact center solutions

January 08, 2024

The competitive nature of contact center performance has been pushing the communications industry toward new and (mostly) improved solutions. This onward march towards customer experience optimization has led to the debate of cloud vs on-premise solutions. Drawing upon my 25+ years of experience in this industry, I’ll touch on reasons for embracing the cloud, including the benefits for enterprises.

In this post, we’ll cover contact centers from the perspective of management, and examine the merits of both on-premise and cloud infrastructure, to help you find the solution that best fits your needs. As a call center manager, you’re not just a spectator – you’re at the helm of your team’s innovation. Your success (or failure) depends on understanding industry options and how they align with your strategies. 

The communications industry never stops evolving, cloud-based solutions are here to stay, but that doesn’t mean it’s the right option for everyone. So let’s reflect on the practical insights shared in this recent presentation, addressing the challenges and opportunities posed by advancing technology and meeting the ever-growing expectations of today’s customers.

What is a cloud contact center?

A cloud contact center is a virtualized, on-demand platform designed to manage both incoming and outgoing customer communications for enterprises. Infrastructure consists of computer system resources, distributed across shared data centers. Using internet-based technologies, cloud contact centers offer a wider set of tools, enabling superior customer service across diverse channels such as automation, web-based integrations, artificial intelligence and machine learning, among others.

VCC Live is a cloud contact center platform that offers such features and handles the full scope of contact center activities.

What is the difference between a call center and a contact center?

The distinction between the two is the scope of communication channels. Call centers exclusively focus on phone interactions, whereas contact centers adopt an omnichannel approach, offering various mediums such as phone, email, live chat, social media, and more. 

The type of technology used may also differ. Contact centers leverage CRM technology for personalized customer service, handling simple and complex tasks, while call centers primarily address straightforward tasks over the phone. 

The choice between them depends on factors like customer base size, issue complexity, the importance of personalized services, and the budget available for technology and software licenses. 
Contact centers, despite potentially higher ongoing costs, provide a more satisfying and flexible customer experience, leading to increases in Customer Satisfaction Scores (CSAT) and revenue from available services.

How have contact centers changed?

Over the past 25 years, communication has transformed dramatically, driven by the relentless evolution of communication technologies, societal norms, and industry dynamics. From the early days of emails and AOL- or ICQ-type instant messengers to today’s integration of various communication modes and devices, the journey of communication has been marked by significant jumps.

The rise of the internet has, arguably, played the most pivotal role, from simple text exchanges to sophisticated multi-modal interactions we experience today. The recent emergence of video, chatbots, and AI tech has further propelled communication, shaping the way enterprises engage with customers.

As we delve into the changing facets of contact centers, it becomes clear that adaptability is not just a choice but a necessity in meeting the dynamic expectations of modern consumers.

The question you should be asking yourself: Can you keep up?

Cloud contact center vs. on-premise contact center

The communications industry is not all dissimilar to others when it comes to the current user protections required for data handling and customer relationship management (CRM) tools used for processes. The debate that has been cycling back and forth between finance, engineering, and management teams in recent years has been whether or not to store and handle that data locally or use a service. Or in other words: on-premise vs. cloud. 

Cloud technologies and services have risen quickly, but like most new things, over-promising can lead some astray. The simple answer to the debate is that the cloud is great.. for the right use cases. For customer experience teams, this decision is central to their enterprise’s strategy so it shouldn’t be taken lightly. 

As we navigate through the intricacies of these two approaches below, the spotlight falls on understanding the fundamental differences, benefits, and challenges they present. The diminishing returns of on-site communications giants (along with their partners) and the rise of more innovative players underscore the severity for businesses to assess their contact center infrastructure.

The case for on-premise contact centers

On-premise centers have long been the stalwarts of the industry, providing a tried-and-true solution for enterprises seeking a sense of control and familiarity.

the case for on-premise contact center vs cloud

The case for on-premise revolves around the reliability of a system housed within the organization’s physical infrastructure. For businesses with stringent security and compliance requirements, on-premise centers offer a level of assurance that may be crucial in regulated industries; although, that’s not to say this level of security and compliance can’t be achieved with the cloud. 

The ability to enjoy unique customization and integrate with legacy platforms is another compelling factor, allowing businesses to tailor solutions to their specific needs or proprietary technology. However, the comfort of total control comes hand-in-hand with the responsibility of managing software patches, ensuring compliance, and hiring support staff.

The case for cloud contact centers

Although similar in some regards, cloud contact center technologies are a shift towards agility, efficiency, and rapid innovation. The cloud presents an array of benefits, including flexibility, scalability, and the ability to adopt the latest industry tools and technologies – quickly.

the case for cloud contact solutions vs on-premise

Cloud-based contact centers empower businesses with out-of-the-box integrations for many commonly used business applications, enabling quick adaptation to customer preferences. The efficiency of remote work, productivity enhancements through intelligent chatbots and machine learning, and the transparent cost structure with pay-as-you-go models make cloud solutions a strategic choice for businesses aiming to outcompete in the dynamic market.

From legacy to agility: Witness the Decathlon success story in a cloud migration case study.

Please note that some cloud providers may not offer such clear maintenance costs or hidden fees; you should proceed with caution when reviewing options.

While the cloud relinquishes certain levels of control, it offers a maintenance-free approach, allowing organizations to focus on their core competencies without the burden of managing complex IT infrastructures.

Business Process Outsourcing (BPOs) and cloudy market forecasts

The cloud, data processing, Business Process Outsourcing (BPO), and internet content hosting services Industry in the U.S. is gearing up for an extraordinary journey, projected to hit a staggering $3 trillion by 2030. With the customer experience industry hitching a ride, the future holds the promise of robust growth.

And as on-premise enterprises continue to face turbulent market evaluations, more agile enterprises adopting cloud services are positioned to absorb those market shares. As cloud services ascend to the forefront of contact centers in BPOs and other industries, agility and adaptability will determine who wins big and who falls behind.

Keeping contact center tools and technologies up-to-date

The rapid progression of communication technology and its adoption helps successful teams outperform their competitors. On-premise centers may face challenges in this regard, as updates and upgrades require dedicated time and resources. But the need to maintain those existing tools and implement new ones, should not be overlooked. 

In contrast, cloud contact technologies offer a distinct advantage through automatic updates. This ensures that enterprises consistently benefit from the latest features and security enhancements without manual interventions (i.e. no missed opportunities from human error). This continuous integration/continuous deployment evolution better positions teams to handle the ever-growing expectations of customers and adapt to optimization pressures.

A good example is how VCC Live provides monthly updates on developments made to our cloud contact center software and its features – in the cloud. Every time users log into VCC Live, they receive automatic notifications for updates to get the latest version, along with additional resources. Meaning, agents and supervisors always have the best possible tools at their disposal.

Total cost of ownership for on-premise vs. cloud contact centers

The overall cost of technology can be a key factor, and it’s easy to overlook future expenses that aren’t included in the initial price. On-premise centers often demand substantial upfront investments in infrastructure, hardware, and maintenance, along with ongoing costs for upgrades and compliance. Cloud contact technologies, with their pay-as-you-go models, provide cost transparency, allowing businesses to scale their operations efficiently without unnecessary expenses during periods of lower demand. 

total cost of ownership comparison of on-premise contact centers vs cloud solution


  • On-premise initial setup involves substantial capital, requiring investment in hardware, software licenses, dedicated infrastructure and personnel. Proof of concept may involve lengthy procurement processes, and deployment timelines can be extended due to physical setup requirements.
  • Cloud setup costs are significantly lower as there’s no need for upfront hardware investments for setup. Cloud providers offer various, scalable solutions, allowing for quicker proof of concept and allowance for proof of value; in short, enabling a faster transition from planning to deployment.


  • Traditional, on-premise systems may face roadblocks in adapting to evolving operations, often requiring additional investments for updates. Scaling up or down can be time-consuming and interrupt ongoing workflows.
  • Cloud solutions are more forgiving for those in need for more scalable or adjustable workflows. Turnaround from updates is often a matter of minutes, to update or launch new features.


  • On-premise facilities limit accessibility, particularly for remote teams or hybrid teams requiring off-site access. This might result in productivity challenges, hinder collaboration, or place higher reliance on IT support.
  • Cloud solutions allow authorized users to access systems from anywhere with an internet connection, promoting remote work capabilities. However, access to the underlying code is likely not possible as most providers do not open-source their software. To make alter or customize available solutions, users typically can use drag-n-drop interfaces, purchase new features, or submit ticket-systems for the cloud contact center provider to develop.  


  • For on-premise facilities, security is solely the responsibility of the organization. This requires dedicated resources for monitoring, updating, and compliance control. While a double-edged sword there are benefits with no other, or a limited number of, 3rd parties involved; notably, full control and ownership of all areas can be achieved.
  • Cloud providers can be selected based on campaign-specific security needs and adjusted more easily, from data encryption to industry-specific updates and compliance certifications. Similarly to on-premise, shared responsibilities is a double-edge sword, with the provider handling infrastructure and security, reducing the burden on the organization, but the organization has less control. With the ability to update frequently, advanced security features contribute to a more resilient system.

While on-premise centers may offer a sense of control over costs, cloud solutions bring a level of financial flexibility and predictability, enabling businesses to align their expenditures with their operational needs more effectively. Assessing the TCO comprehensively is crucial in making an informed decision that aligns with the long-term goals and financial strategy of the enterprise.

What’s the future of contact centers and communications?

Future solutions used in communications will certainly surprise us. Maybe the AI hype will implode or maybe augmented reality and the metaverse will make a comeback. Maybe even Star Trekesque transporters will popularize face-to-face interaction. While the extent of AI’s influence and ‘Sci-Fi tech’ remain uncertain, some short-term trends are evident:

  1. On-premise centers will face hardship: With some of the biggest names in the communications industry facing plummeting valuations in recent years, it will take time before the market is willing to revisit these on-premise powerhouses. Agile and efficient will be the motto of the future.
  2. Automation will improve: One of the undeniable trajectories is the continuous improvement of automation. This will include improved efficiency of contact center agents and analyzing consumer data.
  3. Integration of AI and machine learning: The investment in AI and its prevalence in automation will prove to be pervasive, at least in the short term. AI and machine learning solutions, from voice to text, are anticipated to make a significant impact on customer experience and optimizing business operations. How far it will go and how quickly it will evolve is ‘up in the air.’
  4. Increased embrace of remote work: The advantages for remote agents and contact centers is hard to pass up on. From expanded labor pools, reduced expenses on IT equipment, and seasonal flexibility to scale staff, remote work is an easy option for enterprises looking to capitalize on recent changes.
current state of cloud services for contact centers

Rapid expansion of data utilization: Like most industries, communications’ revolution came with the dawn of big data. Being able to analyze large volumes of consumer data and contact agent performance allowed for massive gains in business process improvements and algorithms.

How to migrate cloud contact centers successfully?

Your business is unique and what sets you apart from your competition means a generic, one-size-fits-all solution won’t cut it. Cloud contact centers can improve your contact center’s cost savings. From onboarding remote teams quickly to integrations for your preferred tools, VCC Live can help.

Our goal is to ensure your success with the cloud. 

Why opt for VCC Live as your cloud contact provider?

  1. Proven expertise: With a demonstrated history of empowering contact centers, VCC Live brings extensive experience to the forefront. We help teams transition to the cloud.  
  2. Discovery calls: Acknowledging the unique nature of each enterprise, our support team formulates solutions aligned with your specific requirements.
  3. Innovation at your fingertips: Stay at the forefront of industry advancements with VCC’s cloud contact solution, give your team the tools it needs to perform.

Embark on a journey where success is the ultimate destination. Connect with VCC Live’s support team today and let’s navigate the future together.

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