Which is Better Option- On-Premises or Cloud-Based Call Center? Know the Difference Between the Two

On Premises Call Center VS Cloud based Call Center

Are you planning to set up a call center business? If yes, then this blog can be useful for you in determining the best call center requirements. 

Types of call center software

The most popular types of call center software are:

  • On-premises software 
  • Cloud-based call centers software

Let’s know a brief about both the on-premises and cloud-based call center software to get an idea of what exactly these are and how they work.

  • On-premises call center: On-premises call center is a traditional business phone system that involves physical equipment such as desk phones, wiring, servers, etc. The desk phones are usually linked to a server via a PBX system. Since all the things like equipment, wires, and other devices are located on the site (place of work), the software is also known as an on-site call center. It is important to note that the number of businesses using on-premises call center systems is declining day by day due to many reasons like complex setup, frequent maintenance, expensive tools, etc.
  • Cloud-based call center: A cloud-based system is completely different from an on-premises setup. With this type of system, businesses need not install any physical equipment at the place of work. The service provider manages all things. Several cloud-based call centers generally rely on a cloud-hosted PBX. All the calls (inbound and outbound) are made via a VoIP (Voice over Internet Protocol) connection. This allows the customer support team to make or receive calls via the internet instead of an analog phone system. Besides, a cloud-based system can be used with any personal device, including desktops, laptops, cell phones, etc. 

Difference between on-premises and cloud-based phone system

Let’s look at some of the key points that make a cloud-based call system different from an on-premises call center. Various things that make on-premises and cloud-based phone systems different from each other include: 

  • Installation and other costs: Traditional or on-premises phone systems usually have a higher installation cost. Along with the equipment cost, the installation cost at the workplace and other charges can make a traditional phone system even more costly. However, businesses can save you up to 60% of that cost with a cloud-based system in place. The reason is that a cloud-hosted PBX system is a virtual system.
  • Installation time: Since an on-premise call center needs physical equipment, businesses require the help of a technician to install the system. On the other hand, call center software works online. One doesn’t require an engineer to come to their workplace and set up the system. Just download a business phone app on agents’ devices, and they can start using the service without wasting any time. 
  • System maintenance and up-gradation: A traditional phone system uses physical phone equipment that demands frequent maintenance. Besides, the on-premises phone system needs to be upgraded every few years as phone technology downgrades. On the other hand, a cloud-based phone system doesn’t always need a desk phone. Instead, businesses can use softphones computer software that can be installed on any device). Moreover, if any issue arises, the service provider can fix the issue without coming to work. 
  • Productivity: On-premises phone solutions don’t comprise any advanced features like an auto-dialer. The agents need to keep in mind which numbers to call on their desk phone. This leads to wastage of time and distraction. However, a cloud center solution comes with various attractive features like auto-dialer, predictive dialer, auto-attendant, and many more. This helps to enhance the agent’s productivity by up to 25%. 
  • Scalability: An on-premises business phone system is hard to scale as per the growth of a business. The users need to spend extra money every time they add a new desk phone. Besides, new equipment installation requires wiring and an engineer to set up the system. However, a cloud-based phone solution is much easier to scale. It grows perfectly with a growing call center. It doesn’t require any additional hardware. Agents can make or receive calls from their existing devices. Users just need to add the new members to their online accounts to access the virtual call center. 
  • Reliability: Traditional business phone systems have the risk of downtime. The server might overheat, a wire may get damaged, the maintenance team may not be available on time, or any other issues may occur anytime. This can greatly affect the productivity and efficiency of a call center. Fortunately, cloud call center software can reduce the risk of downtime to a great extent. It allows agents to work seamlessly by eliminating most of the issues. 
  • Security: A business phone system is always at a risk of security as hackers can hack the system and access business data. On-premises phone systems are usually considered the most secure option as all the connections are in the workplace. A hacker would need to go through the office security system to gain access to important information. Also, when it comes to virtual call center software, businesses usually worry about the security feature. The good thing is that virtual call center software is also a secure option as several providers offer various security features to prevent hacking or data breach. 
  • Flexibility: Today, most businesses are letting their employees work remotely. This is not possible with an on-premises phone system as this system requires agents to be present in the office to receive calls. However, with a cloud-based phone system, businesses can hire remote support agents. Agents can work freely and make/receive calls from anywhere. 
  • Collaboration: In the case of a traditional phone system, employees need to remember complex line extensions for each team member to connect with them. It is not possible to remember each member’s extension. However, virtual phone systems come with an Automatic Call Distributor (ACD) feature that automatically routes a customer to the most relevant support team based on their query. Automatic call forwarding makes collaboration much easier and efficient. 
  • Integrations: On-premises call center software doesn’t support integrations of various other tools and software. It can only be used to make and receive phone calls. On the other hand, a cloud-based phone system allows easy integration with various smart tools and software. This helps in enhancing the productivity and efficiency of a call center. 
  • Analytics: On-site system doesn’t show any metrics that can be used to measure the performance of a call center. On the other side, a cloud-based system allows businesses to measure their agents’ performance with real-time analytics. This helps in accurately tracking call center agents’ performance to be rewarded based on their performance. 
  • Customer experience: With an on-premises call center system, users don’t have access to advanced features that help in the quicker resolution of customers’ queries. On the other hand, a cloud-based system offers various advanced features such as Interactive Voice Response (IVR), auto-attendants, call forwarding, and more that help fast resolve customer issues. Thus, it results in a better customer experience. 


To conclude, it would be right to say that cloud-based call center software is much more efficient than a traditional one. Hope you’ll find the above guide helpful in determining the best phone system for your business requirements. 

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