Hosted contact center sales are up, lifted in part by the growing awareness and acceptance of cloud services generally, but also due to benefits that cannot be matched by a premises-based contact center, specifically. For telecom agents, hosted contact center presents an opportunity offer more value to call centers than just cheaper long-distance.
Hosted contact center service providers interviewed by Channel Partners reported significant sales increases over the last 12-24 months. Interactive Intelligence, for example, claimed its cloud-based contact center sales grew about 300 percent from 2009 to 2010. InContact Inc. said fourth quarter of 2010 was its third straight quarter of record bookings, with an increase in year-over-year revenue of 98 percent. CosmoCom Inc., which has a dozen years providing hosted contact center platforms to telcos, noted telco pipelines had increased 4X during the last 18 months. And, it started offering its own hosted service two years ago because customers started asking for it.
While individually these reports are noteworthy, collectively they signal that businesses are embracing hosted contact center technology in unprecedented numbers. The drivers, experts say, fall into a few buckets: lower cost, greater flexibility and increasing comfort with cloud models.
Total Cost
The initial lure of hosted contact center is the low cost of entry when compared to a premises-based solution. Because cloud solutions are subscription-based, customers don’t need to come up with a lot of capital to implement the solution. Inability to get and/or spend capital has been a conundrum for businesses since the economy tanked in 2009. All cloud services, including hosted contact center, have been beneficiaries of businesses’ increased willingness to entertain operational expenditure models as an alternative to capital expenditures.
“Upfront cost is the biggest driver, especially given the economic situation over the last several years. People are looking to not make a capital investment upfront, but to spread the costs over time," said Steve Kaish, vice president of product management and marketing for CosmoCom, which offers both hosted and premises contact center solutions.
The holdouts on hosted contact center argue that the cost benefit can only diminish over time since the subscription fees continue in perpetuity while the premises purchase is a fixed amount. The larger the customer, the more likely they are to buy into this reasoning and opt for a traditional equipment plus software deployment.
New research from Frost & Sullivan, however, suggests that assumption is flawed. According to its new report, “Premise vs. Hosted Contact Center: Total Cost of Ownership," the cloud-based model proved to save money over time – the study looked out five years – and to be greater for deployments as they grew in size and complexity.
