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On-Premise vs. Cloud Contact Center: How to Choose the Right Phone System

smiling contact center agent wearing headphones

Contact centers play a vital role in business communications and customer relationships. However, organizations are usually conflicted on whether to go for an on-premise or a cloud-based solution when it comes to setting one up.

This article will simplify your decision-making by comparing the two contact centers based on their differences, advantages, and disadvantages.

What is an On-Premise Contact Center?

An on-premise contact center is a traditional contact center where all the hardware, software, servers, and other physical equipment are stored at the company’s location. This requires you to have a specialized team to handle the installation, maintenance, and upkeep of everything from servers to headsets to integration support.

What is a Cloud Contact Center?

A cloud contact center hosts your business or call center’s data in the cloud while the servers belong to the business phone service provider. This relies on internet connection and users can access data through a desktop or mobile app. A cloud contact center does not need a heavy investment in physical infrastructure like an on-premise center.

On-Premise vs. Cloud Contact Center

Here are some areas organizations can use to compare and differentiate cloud and on-premise call centers:


Setting up an on-premise call center with the hardware, licenses, and compatible software can take several months. On the other hand, setting up cloud-based call centers features minimal hardware requirements. It is as easy as installing a mobile or desktop app that functions right away.


On-premise contact centers have the traditional call features, including call transfers, hold, wait music, conferences, and call logging. Cloud call centers have advanced features and capabilities such as call monitoring, IVR, click-to-call, voicemail to email, customized solutions, CRM integrations, etc. 


On-premise call centers require upfront costs for hardware, licenses, and other on-site equipment the other hand, Cloud contact centers do not require significant upfront installation costs but ongoing monthly subscription costs. They offer a pay-as-you-use option, meaning you only get charged for what you use. 


As business requirements change, on-premise contact centers must be upgraded or downgraded manually. Scaling up is tedious as you may need additional physical phone lines. However, a cloud contact center solution can be done with a few clicks on your dashboard. 


On-premise contact centers may have more stability in terms of call lag. Traditional phone services tend to avoid shaky call quality. However, call quality is as good as the technology and hardware being used. Also, physical equipment may break down at any time. For cloud contact centers, high call quality is as good as the strength of the internet connection. 

Advantages & Disadvantages of On-Premise Contact Centers 

Here are the benefits and drawbacks of an on-premise contact center solution:

Advantages of On-Premise Contact Centers 

  • Maximum control and access to your functions
  • In-house storage of data
  • Peace of mind over your confidential data 
  • Complete ownership of hardware and maintenance
  • Up-front costs that are paid off instead of ongoing payments 

Disadvantages of On-Premise Contact Centers

  • No working from home 
  • No remote agents or mobility 
  • Scaling is not easy 
  • No emergency sign-ons 
  • Regular maintenance of hardware
  • Hardware is vulnerable to physical damage or natural disaster 
  • Need to hire additional staff for hardware upkeep
  • Physical presence is a must for call monitoring 

Advantages & Disadvantages of Cloud Contact Centers 

Here are the benefits and drawbacks of cloud contact center solution:

Advantages of Cloud Contact Centers:

  • Higher ROI 
  • Pay only for what you use
  • Easy scalability and flexibility
  • Fast deployment
  • Multichannel contact center
  • Deliver better customer experiences
  • Optimize employee productivity and efficiency
  • Save costs 
  • Call center management
  • Advanced features and capabilities

Disadvantages of Cloud Contact Centers

  • No ownership of the software

Choosing Between On-Premise and Cloud Contact Center for Your Business 

Now that you have seen the differences, advantages, and disadvantages of both on-premise and cloud contact center solutions, it is time to decide. Investing in contact center technology is a huge decision and hopefully, with this guide, you will be able to choose the right phone system for your business.

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