As technology evolves, businesses are confronted with multiple decisions regarding their IT infrastructure. One such decision is whether to use on-premise or cloud-based systems. Both have their strengths, but the choice depends on the business’s specific requirements. In the case of contact centers, some compelling arguments favor on-premise over cloud solutions.
Traditionally, businesses have used on-premise systems, where the IT infrastructure, including hardware and software applications, resides within the physical office space. This setup requires businesses to maintain in-house servers, hire IT personnel for regular system maintenance, and shoulder the responsibility for security management. While this approach demands higher initial investments and ongoing maintenance costs, it offers full control and can be customized to specific needs.
On-premise solutions, occasionally called “Shrinkwrap software,” require a license per server, after which the company fully owns and operates the servers. The system also offers a degree of robustness and reliability not always available with cloud solutions because it doesn’t depend on internet connectivity for operation.
Let’s understand why and when on-premise is better than Cloud.
1. Data Security and Privacy
Security is critical for contact centers, which often handle sensitive customer information. Cloud service providers store data in their servers, often in multiple locations, sometimes even in different countries. This can lead to compliance issues, particularly for contact centers dealing with sensitive data subject to strict regulations (like GDPR, HIPAA). Furthermore, data stored in the Cloud may be more vulnerable to cyber-attacks and breaches, causing potential security concerns.
In this aspect, on-premise solutions have an edge over cloud systems. On-premise solutions offer superior protection because the data is physically located within the business premises and can only be accessed by authorized personnel. Unlike cloud storage, which external parties can potentially access, on-premise servers offer additional layers of security, making them especially appealing to businesses in sectors like finance and healthcare that handle sensitive data.
2. Full Control
On-premise systems offer a higher level of control over data and resources. Businesses can make decisions based on their specific needs, from maintenance schedules to system upgrades, without relying on external service providers. This level of control is particularly vital for contact centers, which require system reliability and continuity to offer quality customer service.
3. Independence from Internet Connectivity
Internet connectivity is a critical requirement for cloud systems. Cloud-based solutions are heavily reliant on reliable and high-speed internet connectivity. Any interruption in connectivity or problems with bandwidth can directly impact the contact center’s operations, leading to customer dissatisfaction and potential loss of business. Furthermore, network latency and data transmission delays can hinder real-time communication, which is crucial for call center operations.
With an on-premise system, contact centers don’t have to worry about internet downtime, which could disrupt operations and negatively impact service delivery. Although many businesses today rely heavily on the internet, having a solution that can operate without it offers a level of dependability that’s crucial for contact centers.
Cloud solutions are typically designed to cater to a broad range of businesses. While this makes them highly versatile, it can also limit their ability to be tailored to a specific contact center’s unique needs. While some customization might be possible, it may not be to the extent that an on-premise solution would allow, potentially limiting the contact center’s efficiency or effectiveness.
Meanwhile, on-premise systems give businesses full control over their data, hardware, and software applications. Companies have the power to customize these systems according to their specific needs and can oversee the maintenance processes firsthand. They also have the authority to decide when to upgrade or modify these systems. Such absolute control is rarely possible with cloud systems, where the service provider largely drives maintenance and updates.
Companies using on-premise solutions don’t need to invest in high-speed, premium internet services necessary for cloud-based solutions. Reduced demand for high-speed internet leads to cost savings and ensures that contact centers can function smoothly without worrying about bandwidth issues.
While cloud solutions are often touted for cost-effectiveness, hidden costs can be hidden. Pricing models for cloud services can be complex, involving various factors such as the number of users, data storage needs, additional features, and more. As a result, contact centers might pay more than anticipated, particularly if their usage or needs change over time.
In contrast to cloud solutions, on-premise solutions come with an upfront cost that is typically higher due to the need to purchase and install hardware, software licenses, and the infrastructure necessary to host and manage the system. However, these costs are mostly one-time investments, and the subsequent operational costs are more predictable.
The cost structure of on-premise solutions is simpler and more transparent. Since you own the servers and software, you clearly understand what you are paying for. There’s no need to calculate costs based on the number of users, data storage requirements, or additional features, as these are all within your control. While the upfront costs of on-premise solutions can be more substantial, businesses gain an asset that they control and can serve them for several years. Additionally, on-premise solutions do not have recurring subscription fees, which can significantly increase over time in a cloud-based model.
The choice between on-premise and cloud systems is strategically influenced by several factors, including the nature of the business, its size, budget, and specific operational requirements. Although cloud systems offer scalability and flexibility, on-premise systems provide a high level of control, security, and reliability. For contact centers, especially those dealing with sensitive data, on-premise systems can often prove a better choice, providing robust, secure, and reliable service delivery.