A decade ago, no self-respecting call center director would dream of using anything that even remotely resembled a cloud-based software solution. If the software and hardware weren't in your contact center, it wasn’t to be trusted. How else could you keep an eye on anything?
It may seem strange now, but cloud-based software wasn’t trusted for a number of reasons:
- Why change what’s broken? There weren’t any major issues with on-premise solutions so why change them
- Owners worried that by using the cloud they would lose control of their data
- There was a fear over security and data breaches
- It needed a reliable Internet connection to work
- Trusting someone else to provide a solution is harder than trusting yourself
But in the words of Bob Dylan, ‘the times, they are-a-changin.’
Today more than ever, people are swapping out their on-premise call center software for a cloud-based solution. And for good reason. Cloud solutions offer a level of flexibility, reliability, and support that on-premise solutions can’t match.
And here’s the kicker — they are WAY cheaper and more secure, too.
But just how many call centers are transitioning to cloud-based solutions? And why are they doing so in the first place? Let us enlighten you.
The Move To The Cloud
If you're still apprehensive about transitioning from a premise-based solution to a cloud-based platform, industry reports all indicate cloud-based contact center solutions are on the rise – proving just how many other people saw and currently experience al the advantages of the transition. For those still on the fence, here are the stats that may help reassure you:
- In the 2015-2016 Cloud-Based Contact Center Infrastructure Market Report, DMG Consulting indicated the total number of cloud contact center seats grew to 49.9%, from 1,302,788 to 1,953,249 between 2014 and 2015.
- The cloud-based call center market and demand is projected to expand from $4.15 billion in 2014 to $10.9 billion in 2019.
- The global cloud-based contact center market is expected to grow from $4.68 Billion in 2015 to $14.71 Billion by 2020, at a Compound Annual Growth Rate (CAGR) of 25.7%.
That’s a pretty good case for a strong cloud adoption trend, right?
Before we deep dive into a comparison between cloud and on-premise solutions and start telling you why you need to switch to the cloud, let’s take a minute to briefly cover how each solution works in a call center.
How Does On-Premise Software Work?
The name "on-premise" speaks for itself with these types of call center solutions. When operating an premise-based call center solution, everything (the software, hardware, servers, IT staff, etc.) is all located "on" your "premises." Running this type of operation means that everything from setup, maintenance, customizations, upgrades, etc. is handled by you and your team with either no outside support or costly external consultants. Why and why don't people choose to deploy premise-based systems?
I. The pros:
- You control everything
- You don’t have to rely on any third parties
II. The cons:
- Little to no support with your system
- High upfront setup/startup costs
- Little to no flexibility for quick horizontal scaling to support growth
Then Who Is It Good For?
Many large call centers still prefer to keep everything in-house. This is only possible because of the large amounts of data, long-standing and developed systems and processes, industry norms, existing in-house resources, and revenue that they generate. By keeping everything in-house these premise-based call center operations don’t have to share servers or software with anyone else and can even spend time developing their own. Often times, many of these large call centers with decades worth of data also don't have the flexibility in time to migrate all their data to a cloud-based system, not to mention fear of the potential risks of losing some data in the process. The other type of call center that suites on-premise software is one that has A LOT of sensitive information. We’re not talking phone numbers, here. We’re talking about medical or financial records. Understandably, these type of call centers won’t want to risk that data in the cloud, or don't have time to shop for a solution to fit their specific compliance needs.
How Does Cloud-Based Call Center Software Work?
With a cloud-based solution, everything is hosted in the cloud and provided by a third party SaaS provider. Call centers only need to pay for internet and headsets, the actual software is setup, maintained, customized (in some cases), supported, and upgraded by the call center software provider (like Convoso!). For most SaaS call center software providers all agents and admins need to do in order to login to the platform is a using a browser and an internet connection.
For call center platforms like Convoso, the softphone is fully-integrated within the system via WebRTC, which means no external softphone installation is required to start making and placing calls.
Additionally, many cloud-based call center platforms also have the advantage of being highly mobile – allowing admins and agents to access the platform through a mobile or tablet device in addition to desktops. The ability to access the platform with a tablet device has been a groundbreaking and highly sought after capability for call center managers. With this capability, call center managers can easily pull up the platform's real-time performance reports on their tablet and walk the call center floor, checking-in with their agents while also actively engaging and/or listening in to certain conversations.
I. The Pros:
- No upfront capital expenditure in hardware
- Much lower startup and maintenance costs
- The solution will scale with your business
- 99.9% uptime and SLAs guarantee reliability
- Multiple redundant servers and redundancy plans wherever you are located
- Round-the-clock concierge support
II. The Cons:
- Requires a reliable internet connection
Who Is It Good For?
A cloud-based solution is suitable for any type of call center from small to enterprise. It is particularly useful for const-sensitive businesses that don’t want to pay or can’t afford the high startup costs associated with on-premise solutions. It also allows them to scale at will, adding new agents with ease to accommodate their growth.
On-Premise Contact Center Software vs. Cloud-Based Contact Center Software
Why are so many call centers making the switch to a cloud-based solution? We analyze the benefits by putting cloud and on-premise solutions head-to-head in the factors that matter most to call center managers.
When your business relies on your staff making or receiving calls, any disruption is going to cost you financially. Whatever solution you choose, you need it to be as reliable as possible.
- On-premise: These solutions were traditionally thought of as the most reliable because contact center staff are always in control. But staff might not be the best people for the job, especially if they are not IT minded. All equipment fails at some point and it’s the speed at which solutions get implemented that really counts. For on-premise systems, this means employing an expert to watch over everything in case of failure. Even then, you have no plan B. What if your IT staff can’t fix the solution? Then what happens?
- Cloud: While these systems rely on the internet, they are statistically more reliable. The solutions hand huge amounts of data for hundreds or thousands of clients. This means that they have high-level redundancy plans in place. Should downtime occur on one server, there are other servers spread across the globe that can take up the slack. While they are doing that, the SaaS provider has IT experts working to fix the problem. It is in everyone’s interests for the problem to be fixed as quickly as possible. It’s also why these providers are able to promise 99.9% uptime and guarantee it with a Service Level Agreement. Of course, because the solution relies on an internet connection, latency might become an issue. This typically isn’t the vendor's fault, though. Upgrade your Wifi and latency should go away.
Call centers are fluid beasts. One moment you have a sudden influx of clients and you need more seats and more agents. The next, you need to downsize to reduce costs. This can be tricky when you have an on-premise solution that offers an inflexible solution. That’s why so many owners are choosing the cloud.
- On-premise: These solutions are notoriously inflexible for a number of reasons. Consider the following:
- You need to increase or minimize staff. You buy the solution based on your current needs, if these change, you’ll need to purchase more equipment or you’ll be left with expensive equipment that isn’t being used.
- If devices break, you’ll need to buy the exact same model to insure the software works properly
- Change your CRM system and you might have to change your entire software package
- If you rely on an on-premise solution, you better hope your situation doesn’t change for years.
- Cloud-Based: A cloud-based solution is different. It is designed to fit seamlessly into any system and with the majority of third-party CRM providers. If you change a supplier, the software can account for this and change instantly to reflect it. The software can also be run on any device as long as it has an internet connection. It will also make sharing work much easier. The system is also perfect for splitting over multiple locations. It offers the same experience everywhere and opportunity to share data across wide geographical distances. If you suddenly need more staff, the system can scale with ease to accommodate new users. Vice-versa, you can shrink your requirements and pay less if need be. If you want to promote remote working, cloud software makes it possible.
New technology, machine learning and artificial intelligence (AI) mean that call center software is changing more rapidly than ever before. If you want your call center to remain at the forefront of the industry, only one software will help.
- On-premise: When you choose an on-premise solution, you get the software you pay for and nothing else. Sure, this is suitable for the present, but it can age quickly. Consider Windows XP v Windows 10. The difference is shocking. When major changes occur in the industry, the software could be redundant. And those major changes could happen within a few years. When you have an on-premise solution, upgrading means forking out for a completely new system, and all of the additional costs and disruptions that go with it.
- Cloud-Based: With a cloud-based solution, you’ll remain up-to-date at all times. Updates and changes are handled by the provider and delivered seamlessly to your platform. Don’t think you’ll miss out on anything, either. It is in the provider’s interests to update the software with the latest technology to ensure that customers remain with them. As a result, contact centers can get the latest solutions before (or at least at the same time) as others. No new servers or storage capabilities need to be created to allow for upgrades either, everything happens online.
Which do you think would be the most secure option? Go on, guess.
We’ll forgive you if you thought it was an on-premise solution. After all, what could be more secure than a system you have in-house that you can keep an eye on each day? Well, it turns out that cloud systems are much more secure, and here’s why:
- On-premise: When you run a call center, you’re reliant on an awful lot of data. The security of that data, therefore, becomes a key issue. Keeping it on-site seems like a safe bet, right? But contact centers with onsite software are 31% more likely to experience data security issues. That’s because the vast majority of data breaches are down to human error or misjudgment. Forget the Hollywood image of bedroom hackers trying to break into your call center. The majority of attacks are likely to come from phishing emails. They only work if your staff fool for them and once they are in, all of the ‘secure’ data that you hold in-house is up for grabs. It’s not just human error you have to be concerned about. What about if your servers get destroyed by a fire, a flood or another disaster? If you don’t have a cloud backup of your data, it can be virtually impossible to retrieve it once destroyed.
- Cloud-Based: Cloud-based solutions are only viable if they can promise customers an exceptional level of security. Choosing a top vendor, then, means choosing the kind of security protection that you couldn’t implement in-house on your own server. Encrypted cloud storage makes data breaches far less likely than if you were storing data on your own server. Data recovery is much more straightforward, too. The data is only ever stored in the cloud and there’s very little chance of it being deleted or corrupted. In fact, you could access it from any part of the world.
One of the main criticisms of cloud-based call center software is the pricing structure. Many companies are reluctant to continue paying a subscription fee once they have the system in place. After all, it’s never something you had to do with an on-premise solution. What a lot of owners and managers don’t realize, however, is that the subscription model means that a lot of the significant upfront investment is eliminated. Subscription-based cloud solutions can actually work out a lot cheaper in the short term and the long term.
- On-premise: The first big problem with on-premise solutions is that the software and hardware must be paid for upfront and in full. This is typically only possible if you are a large company with sufficient financial resources. It puts on-premise solutions virtually out of the question for smaller startups. They can’t afford it. There are hidden ongoing costs, too. Typically, the software will be tied to one machine. That means if equipment fails, companies have to pay in full to replace it. If they can’t pay quickly, this can have a dramatic impact on service. If you suddenly take on more staff, you’ll have to pay a whole lot of huge setup costs all over again. When you have your own on-premise solution, you’ll usually need to have a server in-house. At the very least this means hiring a full-time IT expert to maintain your infrastructure. They don’t come cheap. Finally, as any call center director will know, you have to continually upgrade in-house solutions so that they remain relevant. That means the costs will be repeated every five to seven years.
Example Costs of On-Premise Software:
- Upfront costs include:
- Relevant equipment to run solution on
- Server acquisition and setup
- Licenses and software
- Professional installation
- Total cost: upwards of $700,000
- Ongoing costs include:
- Maintenance fee of 20% of upfront costs
- Server expenses (electricity, licenses etc)
- In-house IT support salary
- Total cost: Over $300,000
- Cloud-Based: With a cloud-based solution, the call center only pays for what it needs. When everything is hosted in the cloud, there’s no need to pay for hardware or fixed storage. There’s also need to pay for the cost and associated costs (electricity) of in-house servers to support on-premise software. Or the cost of a dedicated IT technician. Rather than a large upfront investment, pricing is more flexible and can be paid monthly. This aids cash flow and makes it possible for contact centers to predict future costs. It also means startups can get off the ground with minimal upfront investment.
Example Costs of Cloud-Based Software:
- Upfront costs include:
- One-off payment to start service
- Total cost: $25,000
- Ongoing costs include:
- Monthly subscription fee
- Total cost: $25,000
When it comes to costs, it’s a no brainer. Pay substantially more for an inflexible system that will have to be changed every five years, or substantially less for a system that will be upgraded for free and scale with your business.
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