Customers in any business and industry want the option to connect and communicate with the business and brand from their preferred channels. As a result, it is crucial for businesses to integrate various communication channels in their customer service. 

However, this is easier said than done and becomes a headache for businesses as they have to operate and monitor various channels. This is where the hosted contact center comes into the picture. With a hosted contact center, you no longer have to worry about clunky hardware, tangled wires, or frantic IT calls. 

So, in this blog, we will discuss what a hosted contact center & how it works. Let’s start 🚀

What is a Hosted Contact Center?

What is a Hosted Contact Center

Hosted call centers refer to call centers that use infrastructure outside of the company’s premises to handle inbound and outbound calls. The name “hosted” comes from the fact that this type of contact center is hosted by a third-party vendor either at their physical location, data center, or in the cloud.

📗Similar Blog: Everything You Need to Know about Multichannel Contact Center

How Does a Hosted Contact Center Work?

Here’s how a hosted contact center works:

Software as a Service (SaaS)

First and foremost, a hosted contact center offers Software as a Service or simply SaaS. It means that users can utilize these applications via the Internet without the need to install or manage them on their devices. Some of the most popular contact center software used by this host provider are

  • Customer Relationship Management (CRM)
  • Automatic Call Distribution (ACD)
  • Interactive Voice Response (IVR)
  • Workforce management tools

Pay-as-You-Go Model

Numerous hosted contact center solutions operate on a pricing model where organizations pay for the services they use following a pay-as-you approach. This method offers cost-effectiveness by removing the requirement for investments and granting financial flexibility.

Cloud Infrastructure

One of the biggest features of a hosted contact center is that it is operated via cloud infrastructure. Thus, a business does not have to worry about anything, including the networks, servers, and storage. 

Multi-Channel Support

Contact centers that are hosted usually offer support for a range of communication channels such as voice calls, emails, chat messages, social media platforms, and others. This allows businesses to interact with customers through their preferred means of communication, resulting in a more unified customer experience.

Remote Accessibility

Agents and supervisors have the convenience of accessing the contact center platform from any location as they have an internet connection. This feature proves to be particularly beneficial in today’s world, where remote work and globalization are prevalent, as it allows for a distributed workforce and offers flexibility.

Benefits of a Hosted Contact Center

Benefits of a Hosted Contact Center

1. Cost-Saving

Traditional call centers that are located on-site need to manage, set up, and update the infrastructure. This can become quite costly as the necessary equipment requires investment, in addition to ongoing expenses related to IT support. Furthermore, as the system ages and becomes outdated, it frequently fails to provide a return on investment.

However, opting for a hosted call center can greatly reduce these expenses. With the subscription model, you have the flexibility to pay on a yearly basis for the service, eliminating the need to invest in any equipment (except for devices and headsets for agents).

In short, you can save money on

  • Hardware
  • Software licenses
  • Hiring expert staff or contractors
  • Maintenance
  • Recurring vendor charges
  • Training

2. Excellent Scalability

Hosted call centers offer higher scalability compared to on-premises systems or traditional contact centers. They allow you to handle a volume of calls efficiently and ensure the satisfaction of an expanding customer base.

Furthermore, it is simpler to add agents as your business grows without the need to install physical phone lines. In case your business experiences fluctuations or anticipates a dry period, you can easily add extra users to your subscription and remove them when things calm down. 

3. No Technical Hassle:

The service provider (contact center host) takes care of all the aspects associated with the contact center software. A hosted contact center doesn’t require any expertise or knowledge from its team. This is an advantage for businesses since the provider handles all the technical aspects entirely, including

  • Server failure
  • Recovery support
  • Software upgrades
  • Regular backups

4. Features and Integrations

If you run an on-premises contact center, there is a chance that you will be limited in the use and accessibility of a limited number of call management features and integrations. However, if you have a hosted contact center, you can enjoy a number of features and integrations. Some include IVR, Call Monitoring, and Immediate Call Routing.

Likewise, you can have a separate communication ecosystem with the introduction of new channels, like

  • Video
  • Instant messaging
  • SMS
  • Email
  • Chatbots

🤔You might also be interested in What is a cloud contact center and How does it work?

Call Center vs. Hosted Contact Center

The difference between a call center and a hosted contact center is tabulated below:

BasisCall CenterHosted Contact Center
Location of InfrastructureCall centers are usually located on-premises.Hosted contact centers are cloud-based.
ScalabilityThe call center offers limited scalability and may require substantial upgrades for expansion.Hosted contact centers are highly scalable and can add or reduce resources based on requirements.
MaintenanceRunning a call center requires an in-house IT team for maintenance and updates.The service provider manages hosted contact centers; automatic updates and maintenance.
InvestmentOperating a call center usually requires significant upfront investment in hardware and software.There is no upfront investment in a call center, as it is  hosted on cloud infrastructure.
Cost StructureA Call center comes with a high initial capital expenditure and ongoing operational costs.Hosted contact centers are pay-as-you-go or subscription-based, with lower or no upfront costs.
AccessibilityThe accessibility of the Call center is restricted to on-premises or specific locations.Hosted contact centers are accessible from anywhere with an internet connection.
CustomizationThe call center has limited customization options.The hosted contact center offers a number of customization options to meet specific business requirements.

Factors to Consider Before Switching to a Hosted Contact Center

Factors to Consider Before Switching to a Hosted Contact Center

1. Required Features

Make a list of the features for your business communication. It is crucial to find a solution that offers an omnichannel approach. Omnichannel allows you to manage all your communication channels effectively. Or you can look for a solution that has the flexibility to expand into ones as necessary. Otherwise, you may find yourself in a situation where you need to switch providers as your needs evolve.

We suggest that you include the following features in your hosted contact center:

  • Automation and Intelligent Routing
  • IVR (Interactive Voice Response)
  • Automatic Call Distribution (ACD)
  • Predictive Dialers.

2. Customer and Agent Experience 

While switching to a hosted call contact center, it is essential for businesses to consider how the customer and agent experience will be. Your customer service solution encompasses not your customers but your agents, as they rely on each other.

When selecting a contact center solution, it’s crucial to take into account the needs and experiences of your agents. Agents play a role in interacting with your customers, so it’s important to provide them with tools. If your customers and agents do not have the best experience, the hosting provider might not be for you. 

3. Security Policy

When evaluating contact center vendors, it’s important to inquire about the measures they have taken to safeguard your data. Ask them about their disaster recovery plan, redundant data centers, clock monitoring, and real-time network status updates. 

It’s also crucial to verify that each provider holds certificates and complies with regulations. These regulations include:

  • HIPAA (The Health Insurance Portability and Accountability Act)
  • GDPR (The General Data Protection Regulation)
  • PCI (Payment Card Industry)
  • SOC 2 (Service Organization Control Type 2)
  • ISO/IEC 27001 (International Standard on requirements for information security management/  International Electrotechnical Commission)

4. Cost Structure

Take a moment to compare the cost structure of the hosted solution with your setup. It’s essential to consider factors, including costs, ongoing fees, and potential savings in terms of managing your infrastructure. If the cost of ownership is higher than your budget, you might want to consider another alternative available in the market. 


Summing up, implementing a hosted contact center in your business communication might be the one-stop solution for your business if you are facing issues with handling various communication operations or your communication cost is simply too high. 

If you are still having second thoughts about using this contact center or not, it might be a wise idea to cover the benefits we have mentioned above. However, if you have made up your mind to implement this contact center in your business, we suggest you learn everything from how it works to factors to be considered before implementation. 

Frequently Asked Questions (FAQs)

What is a hosted contact Centre?

Hosted contact centers are customer service solutions where the infrastructure and software are managed and hosted by a third-party vendor rather than on your own premises. To be more clear, it is like renting a call center. 

How does a cloud contact center work?

A cloud center is an enterprise’s central point of communication with customers and is hosted on an Internet server. So, cloud contact centers work by making interactions through voice, email, social media, and the web accessible from virtually anywhere.

What are the functions of a contact center?

A contact center has many functions. However, the major ones include: 

  • Handling inquiries and requests.
  • Providing information and support
  • Upselling and cross-selling
  • Ensuring compliance
  • Improve customer satisfaction and loyalty

What is the difference between a call center and a contact center?

The fundamental difference between a call center and a contact center is that a call center focuses primarily on phone call communications, while a contact center focuses on multiple channels of communication. 

Sandipan Khadka is an Associate Content Writer at Dialaxy with the knack of writing content that is appealing for the readers. He has written broadly in the area of VoIP and call center solutions.