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Report: Hosted Contact Center Solutions Becoming Mainstream
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Report: Hosted Contact Center Solutions Becoming Mainstream

September 15, 2008

By Susan J. Campbell,
TMCnet Contributing Editor

Hosted solutions once caused certain anxieties among contact center managers as they were considered unstable and even “too good to be true.” These same managers are taking a new look at such offerings as budget constraints are forcing contact centers to make measurable changes while still producing results.

Hosted contact center solutions are becoming more mainstream as not only do they fit in well with tight budgets, they also offer easy deployment and greater operational flexibility.

For contact centers, hosted technology represents a viable and more popular alternative to refreshing legacy premise equipment. Contact center “virtualization” is now much more commonplace and geographically dispersed multi-sourced contact centers are becoming more the norm.
According to new analysis from Frost & Sullivan (News - Alert), North American Hosted Contact Center Markets, the market has earned revenues of $28 million in 2007 and estimates that it will reach $1.1 billion in 2014.

Hosted solutions offer such inherent advantages as flexibility, low cost of entry and scalability. These benefits help to drive the deployment of hosted contact center solutions across North America.

When contact centers lease technology, this allows the organization to deflect the high upfront capital expenditure normally associated with premise deployments. This is considered a particularly attractive business proposition for smaller companies seeking to access the same advanced technology as large enterprises, but at affordable prices.

“Frost & Sullivan believes that the market is witnessing a fundamental shift in the contact center agent population from a fixed brick and mortar environment to one that is becoming ‘virtualized’; distributed geographically with much more flexibility to manage seasonal peaks and valleys,” noted Frost & Sullivan Strategic Analyst, Michael DeSalles, in a Monday statement.

“The hosted model supports this movement and offers cost savings that can be significant in a multi-site environment.”

The hosted model is not all advantages and benefits; it also has its share of challenges. For one, there is a perceived lack of control over operations and the security of critical customer data.

“Many slow adopters are hesitant to hand over control of the technology to someone outside of the four walls of the contact center,” explained DeSalles. “Hence, end-user education on the benefits of hosted contact center solutions along with documented successful implementations is essential to drive greater acceptance and uptake.”

To overcome these challenges, hosted providers have included tenant self-administration capabilities in newer releases of the technology, along with process/methodologies with enhanced security options. Such measures play a critical role in overcoming reservations around security and ease-of-use initial deployment.

As time moves on, the likelihood of hosted contact center solutions gaining more market share is certain. The benefits greatly outweigh the risks of making such a move and contact centers are under increased pressure to improve performance while decreasing costs.

Such a platform also allows contact centers to make expansions where they were physically limited in the past and move into newer markets. The functionality of the hosted model will help to further drive innovations in the industry, growing demand and adoption.
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Susan J. Campbell is a contributing editor for TMCnet and has also written for To read more of Susan's articles, please visit her columnist page.

Edited by Stefania Viscusi
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