Call Centers: Hosted or On-Premise

In an article about hosted or on-premise call centers, Cindy Waxer at InsideCRM posed a handful of considerations for comparing the two methods.

While Cindy does a decent job of laying out the pros for each type of call center solution, there are some additional advantages to a premise-based solution that are not mentioned in her article, and call center managers should seriously consider these when weighing options.

1. Premise-based solutions do, in fact, typically carry a higher up-front investment, and therefore companies who go this route can avoid the capital expenditure. However, the purchase of a premise-based system allows your company to take advantage of depreciation of such an asset, which hosted models do not provide.


2. For small companies, Section 179 of the US tax code allows those small business owners - who acquire equipment for their business - to deduct the cost of such hardware in a single business year rather than over time. Companies that spend less than $450,000 a year on qualified equipment can write off a certain amount in the year in which the equipment purchase is made.

3. Premise-based solution providers can often offer leasing options, allowing the company to stretch payment over time and negating the up-front cost concern.

4. Ongoing maintenance and upgrade costs for hosted solutions can add-up over time, and can ultimately result in costing more - sometimes significantly more - than a premise-based solution.

So, while hosted options are certainly less expensive up-front, time can negate this benefit.