Contact center software unifies communication channels to help your company serve customers better. However, hosting a contact center on-premise can be an expensive hassle. That’s why many of today’s companies use hosted contact centers as a simple, cost-effective customer service solution.
A hosted contact center is a customer-service communication platform hosted off-site by the provider rather than onsite by the user.
This article will outline hosted contact centers in detail, including what they are, how they work, the benefits, and the top providers.
- What it Is
- How it Works
- On-Premise vs Hosted
- Benefits
- Features
- Who Should Consider
- How to Choose
- Providers
- Video Overview
What is a Hosted Contact Center?
Hosted contact centers are communication systems managed offsite by a service provider, either through the cloud or via remote data centers. A hosted contact center gives companies a way to streamline operations while cutting expenses from maintaining physical hardware like PBX systems or data servers. Most hosted contact centers operate as Contact Center as a Service (CCaaS), though some providers manage them in dedicated facilities.
When stacked against on-premises contact centers, a study found that hosted solutions lower operational costs, declutter office space, and cut IT staffing needs. Businesses that switch to cloud-based contact centers see a 35% reduction in IT management time and cut overall IT costs by half.[*]
How Does a Hosted Contact Center Work?
A hosted contact center moves all of the call center’s hardware, storage, and equipment offsite–usually to the cloud. This allows your company to quickly sign up, download the app, and begin using the contact center tools.
Let’s break hosted contact centers down into a few key sections:
- Remote hosting
- Signup and contact center access
- User experience
Remote Hosting
Hosted contact centers are managed remotely by the provider, who stores and maintains all the hardware. Most of today’s contact center providers manage data and equipment in the cloud, offering service via software known as Contact Center as a Service (CCaaS). Popular CCaaS providers include names like Five9, Nextiva, RingCentral, Dialpad, Genesys, and Talkdesk.
When companies use the CCaaS app, all their data, calls, and communication activity goes through the service provider’s data center. The service provider establishes SIP connections between users, stores call logs and records for all users, and even maintains messaging conversation histories.
Signup and Contact Center Access
Company administrators sign up for hosted contact centers in minutes, registering users and inviting them to join by email. Admins can purchase phone numbers across the United States or globe.
Agents and supervisors can immediately download the provider’s desktop application and log in, to begin communicating with customers on multiple communication channels.
User Experience
While call centers support voice only, hosted contact centers also offer multichannel and omnichannel solutions that unify dozens of communication channels in one interface. Customers can contact your company through any touchpoint and agents can handle tasks across a variety of channels.
This user convenience is part of why omnichannel solutions have an anticipated 13.6% annual growth rate over the next decade.
Key Components of a Hosted Contact Center
A hosted contact center comprises of these essential ingredients:
- Cloud-based Infrastructure: No on-premises hardware required; all operations run on the provider’s servers
- SIP Trunking and VoIP Connectivity: Ensures seamless, high-quality voice communication over the internet
- AI-Powered Tools: Features like chatbots, speech analytics, and sentiment analysis enhance automation and efficiency
- Advanced Call Routing: Intelligent routing options like IVR (Interactive Voice Response), skills-based routing, and automated call distribution
- Security & Compliance: Providers ensure data encryption, compliance with regulations like GDPR, HIPAA, and PCI-DSS, and secure access controls
On-Premises vs Hosted Contact Center Solutions
On-premises contact centers are maintained and stored in the user’s office building, while hosted contact center solutions are managed off-site by the service provider.
The table below compares the two types of infrastructure:
| On-Premises Contact Center | Hosted Contact Center | |
| Who manages the hardware | The company using it | The service provider |
| Hosting location | In the company’s office | Offsite at the provider’s location or in the cloud |
| Maintenance requirements | Company must manage:
|
No maintenance requirements for the company |
| Setup time | From several days to several weeks | Instant |
| Total Cost | Between $15,000 to $20,000 to set up, plus $150 to $300 monthly per user.
|
$50 to $250 monthly per user, depending on your provider and pricing tier. No setup cost. |
| Popularity | Rapidly declining in popularity | Rapidly increasing in popularity |
| Features | Basic features:
|
Advanced features:
|
| Accessibility | Built into office computers | Accessible through a desktop app on any internet-connected computer |
| Use cases | In-person call centers that only need basic features and already have on-premise equipment | Call or contact centers based in-person or remotely, of any size, who want advanced features and scalability |
Hardware and Equipment Management
On-premise contact centers are managed on-site by the company using them. The company’s staff must store and maintain the data servers, phone service connections, PBX hardware, and any other equipment required for the contact center to work.
Hosted contact centers are managed off-site by the contact center service provider. Most modern service providers host virtual call center software in the cloud, offering a Contact Center as a Service (CCaaS) application to the end user.
Setup Time
Since an on-premise contact center involves setting up physical equipment in the office, it has a lengthy setup process that can take up to several weeks.
A hosted contact center requires no setup on behalf of the company using it, generally up and running within minutes of signup. Companies can begin making outbound calls as soon as agents download the CCaaS software and purchase a virtual phone number.
Cost
On-premise contact centers generally have a setup cost between $15,000 and $20,000, plus an additional $150-$300 monthly per user. In total, an on-premise call center can cost a company anywhere from $20,000 to over $100,000 per year, depending on location and staff size.
Hosted contact center service costs from $50 to $250 monthly per user, depending on several factors: the provider you use, the pricing plan, and if your company purchases hardware or devices for agents. Since cloud-hosted contact centers don’t require hardware, there are no setup fees, equipment costs, or IT staffing expenses.
Popularity
Due to their higher costs and maintenance requirements, on-premise contact centers have rapidly declined in popularity over the past decade. Many companies have also transitioned from landline phone systems to software-based VoIP, which integrates nicely with a cloud-based or hosted contact center.
Cloud-based contact centers are the most popular choice for modern companies–due to their low cost, scalability, advanced features, and the fact that they support remote work.
Features
On-premise contact centers features are generally limited to the basics: voicemail, call controls like transfer and hold, and an interactive voice response (IVR) or auto attendant menu. A company can split phone numbers into multiple extensions, using the IVR menu to route inbound calls to the right department.
By contrast, hosted call centers usually include a wide variety of advanced digital features. CCaaS software systems unify multiple communication channels–including voice, SMS, email, and live chat–into one application interface.
Accessibility
On-premise contact centers are only accessible on desktop computers in the building where the phone system operates. Agents cannot work from home or on the go.
Hosted contact center technology is accessible from any internet-connected desktop or laptop. Companies can hire agents based anywhere around the globe, and agents can work remotely.
Use Cases
On-premise contact centers work best for in-person teams that use voice calling as their primary way of connecting with customers.
Hosted contact centers serve remote or in-person teams of any size, including teams that plan to scale and grow. Call centers and multichannel contact centers can each benefit from cloud-based CCaaS software.
Benefits of a Hosted Contact Center
There are several reasons why most of today’s companies prefer hosted contact centers over on-premise. Here are the primary benefits of using a hosted contact center:
- Cost-effective
- Scalable
- Supports remote workforce
- Easy setup and low maintenance
- Advanced features and AI Tools
- Better customer experience
- Improved team collaboration
- Security and Reliability
- Easy Integration with Other Systems
Cost-Effective
Hosted contact centers have substantially lower business costs than on-premise contact centers. Cloud-based software involves no setup or equipment costs, and hosted software also reduces staffing and maintenance expenses. Teams are able to save tens of thousands of dollars by switching from on-premise to a hosted contact center infrastructure.
Scalable
Companies can easily add new users to a hosted solution, making it more scalable than an on-premise infrastructure.
Supports Remote Workforce
Agents can access a cloud-hosted contact center solution from a desktop anywhere, enabling a more flexible workforce. Companies can hire sales and support staff in multiple time zones or from countries across the globe. Teams aren’t forced to pay for office space and can let employees work from home.
Easy Setup and Low Maintenance
Hosted contact centers involve minimal setup or maintenance, saving time and hassle for your company. Users can begin utilizing the software immediately. The contact center provider maintains all the hardware, maintenance, and software upgrades–while your company is only responsible for the computers and internet connection.
Advanced Features
Cloud contact center software provides your business with a wide suite of advanced digital features, which improve customer interactions and agent efficiency. CCaaS applications bundle multiple communication channels, advanced analytics, customer self-service features, and advanced call monitoring tools to support call center supervisors.
Reduced Staffing Needs
With features that promote user efficiency and reduced maintenance requirements, hosted contact centers allow companies to reduce their staffing needs. Companies no longer need to devote IT staff to equipment maintenance. CCaaS software includes call monitoring tools and omnichannel agent dashboards, which help supervisors and agents serve more customers during the workday.
Advanced Features and AI-Driven Tools
CCaaS platforms offer a suite of powerful features, including:
- Omnichannel communication (voice, chat, email, SMS, and social media)
- Intelligent call routing (skills-based routing, IVR, auto attendants)
- AI-driven automation (chatbots, speech analytics, sentiment analysis)
- Call monitoring and analytics for enhanced performance tracking
Better Customer Service
Hosted contact centers include several features that improve an agent’s ability to provide customer service. The multichannel and omnichannel interface lets customers contact your company through the channel of their choice, providing more convenience. This matters to customers, as 87% of millennials say that convenience is very important to them.
Improved Team Collaboration
Several hosted contact center features improve team communication, for better customer satisfaction. Cloud-based platforms often have built-in team chat functionality, enabling agents to message each other. Call center agents can use warm transfers to warn each other before transferring calls, and ring groups enable agents to share inbound call responsibility.
Security and Reliability
Leading CCaaS providers offer enterprise-grade security, including data encryption, compliance with GDPR, HIPAA and/or PCI-DSS, and built-in disaster recovery to prevent downtime. Cloud-based platforms also provide geographically redundant data centers, ensuring carrier grade 99.99% uptime and business continuity.
Easy Integration with Other Systems
Hosted contact centers integrate seamlessly with CRM platforms (like Salesforce, HubSpot, Zoho), helpdesk software (think Zendesk or Freshdesk), and productivity tools (like Slack, Microsoft Teams). This allows businesses to centralize customer data, automate workflows, and enhance operational efficiency.
Hosted Contact Center Features
Hosted contact centers software includes dozens of digital features that improve customer support, sales efforts, and team communication. Let’s take a look at the most prominent contact center features:
- Omnichannel or multichannel dashboard
- Call queues
- Interactive voice response (IVR)
- Chatbots and virtual agents
- Real-time analytics
- Call transcription and AI conversation analysis
- Call monitoring
Omnichannel or Multichannel Dashboard
Hosted contact center solutions offer agents an omnichannel, multichannel, or call center dashboard to handle all inbound tasks and queries. Depending on the CCaaS plan and provider you choose, your dashboard will unify multiple communication channels: voice telephony, SMS texting, email, live chat, and social media messaging.
When a customer contacts your company through one of these channels, the routing system navigates the query to an agent. In their desktop app dashboard, agents receive notifications for all inbound queries and can respond to customers across all channels.
Call Queues
Call centers can use hosted software to create call queues that separate agents into departments. When you receive an inbound call, your IVR menu or automated call distribution (ACD) system can route the call to the appropriate department.
Call queues organize inbound calls into a list, holding extra callers in line when all agents are busy. Agents can view their queue from the dashboard. Some CCaaS software lets you set queue callbacks, to automatically dial customers when their place in line comes up.
Interactive Voice Response (IVR)
Create a self-service IVR menu that greets inbound callers and provides them with menu options to choose where they want to navigate. Most hosted contact centers provide a drag-and-drop designer where you can link users, queues, departments, announcements and submenus.
Chatbots and Virtual Agents
Chatbots and intelligent virtual agents (IVAs) are conversational bots that converse with customers through digital channels like live chat. These self-service bots use natural language understanding (NLU) to automate conversations.
Use CCaaS software to integrate IVAs and chatbots into your website and app. Build conversation flows that customize and guide customer conversations. Conversational AI provides 24/7 customer support and reduces staffing needs. In fact, it’s predicted to reduce labor costs by $80 billion in 2026.
Real-time Analytics
Hosted contact center platforms include analytics portals where supervisors can track hundreds of real-time and historical KPIs. Supervisors can view agent performance, call and channel usage activity, customer sentiment scores, queue reports, and more.
Call Transcription and AI Conversation Analytics
Many of today’s hosted contact centers include advanced tools like call transcription and AI-powered conversation analytics. The software uses lateral language detection (NLD) to transcribe calls in real-time, using this information to analyze each conversation’s sentiment and topics.
Call Monitoring
Hosted contact centers support supervisors with a call monitoring dashboard. Call center supervisors can view each agent’s activity, including all active calls, with the ability to join calls with the click of a button. Supervisors can listen quietly, whisper private guidance to the agent, or join the call as a third party.
Who Should Consider a Hosted Contact Center?
A hosted contact center greatly benefits businesses of all sizes and industries giving them scalability and advanced customer engagement tools in a cost-effective way. Below we’ll discuss how different industries and businesses of different sizes can maximize these cloud-based solutions to bolster their operations.
Industries That Benefit from a Hosted Contact Center
Hosted contact centers offer flexibility, scalability, and smart automation—making them ideal for industries with complex customer needs, compliance demands, or high interaction volumes. Here’s how leading sectors like retail, healthcare, finance, and tech can benefit from implementing hosted contact center solutions.
Retail and E-Commerce
- Why it’s Valuable: Retailers need a way to bring customers a seamless omnichannel experience that’s interactive and meets users’ preferences (email, chat, social media, etc.). A hosted contact center brings a better customer experience, faster response times, and AI-powered personalization
- Challenges Solved: Peak season’s high call volumes, unorganized and fragmented communication across different channels, and issues that arise when scaling support teams
- Key Features: AI-powered chatbots, workforce management tools, CRM integration, and omnichannel support
- Statistical Evidence: 86% of buyers say they are willing to pay more for a better customer experience.[*]
Healthcare
- Why it’s Valuable: Healthcare providers need secure and smart communication when it comes to handling patient inquiries, telehealth services, and scheduling appointments
- Challenges Solved: Compliance with HIPAA and data security regulations, handling high call volumes, offering 24/7 availability for emergencies and customer convenience
- Key Features: Secure communication that combats cybersecurity threats, automated appointment reminders, AI-powered patient support, and self-service IVR
- Statistical Evidence: Over 60% of surveyed patients experiencing symptoms that were not of high concern say they would prefer to contact hospitals via telephones or technology.[*]
Finance and Insurance
- Why it’s Valuable: Clients expect real-time and secure support for their banking needs whether it’s transactions, processing claims, or fraud prevention cases
- Challenges Solved: Fraud detection, lofty expectations for instant customer support, and the need to comply to strict security standards
- Key Features: Call encryption, intelligent call routing, secure authentication
- Statistical Evidence: 73% of customers say that they expect their financial institution to anticipate their needs, only 37% asked said they believed theirs did.[*]
Technology and SaaS
- Why it’s Valuable: Tech and SaaS companies must provide their customers with exceptional customer support, manage global customer relationships, and handle technical troubleshooting. Hosted contact centers bridge the gaps between these needs
- Challenges Solved: Heavy technical query volumes (particularly after a product launch), demand for global 24/7 customer support, integration with CRM and helpdesk tools
- Key Features: Automated knowledge base management, multi-lingual support, AI chatbots
- Statistical Evidence: In a recent study regarding SaaS adoption and declining rates as of late, 52% of those surveyed said there’s more scrutiny in SaaS purchasing than ever before.[*] Not being equipped to handle customer needs can lead to lost sales and revenue.
How Different Business Sizes Benefit
Hosted contact centers aren’t one-size-fits-all—they offer tailored benefits depending on the size and needs of the business. From small startups to global enterprises, here’s how organizations at different stages of growth can take full advantage of hosted solutions.
Small and Medium Businesses (SMBs)
- Why it’s Valuable: Hosted contact centers give SMBs the chance to provide customers with support that rivals those of enterprise-level operations without needing big IT expenditure. Cloud-based solutions give them scalability and flexibility as they grow over time
- Challenges: Limited IT resources, need for cost-effective solutions, scalability concerns
- Benefits: Pay-as-you-go pricing, easy deployment, automation tools, integration with CRM and helpdesk software
- Statistical Evidence: 80% of SMBs say technology adoption helps them grow, with cloud-based solutions being stated as being a top priority.[*]
Enterprises
- Why it’s Valuable: Enterprises gain access to advanced analytics, AI-powered automation, and the chance to support their global customer bases while complying with regulatory and data security standards
- Challenges: Managing large-scale customer interactions, compliance, and data security
- Benefits: AI-powered analytics, real-time monitoring, workforce optimization, omnichannel routing
- Statistical Evidence: 74% of enterprises say digital transformation is a top priority and 77% have stated they’ve already taken steps to start that journey.[*]
How to Choose a Hosted Contact Center Solution
When choosing a hosted contact center for your company, use the following steps:
Identify Your Communication Channels
Before comparing providers, determine the communication channels your company must have. Consider why you communicate with customers–such as sales or customer support–and how your customers would like to reach you.
Determine the Features You Want
List the must-have features that will improve your contact center’s efficiency. Consider:
- AI & Automation Requirements: Do you need AI-powered call routing, chatbots, real-time sentiment analysis, or speech analytics?
- Call Management Tools: Do you need IVR, call queues, automated callbacks, or skills-based routing?
- Supervisor & Agent Support: Should the solution include call monitoring, whisper coaching, or real-time agent assistance?
- Customer Self-Service: Will you offer chatbots, AI-powered virtual assistants, or knowledge base integrations?
Evaluate Security & Compliance Standards
Security is critical when handling sensitive customer data. Ensure your provider meets industry-specific compliance requirements, such as:
- PCI-DSS: Required for businesses handling credit card transactions
- HIPAA: Essential for companies in healthcare managing patient data
- GDPR & CCPA: Data protection regulations must be followed if your business operates in certain regions
- SOC 2 & ISO 27001: Indicates strong security and data protection measures
Also, check for data redundancy, encryption standards, and failover systems to ensure uptime reliability and protection against data loss.
Assess Integration & Customization Options
A hosted contact center should seamlessly integrate with your existing business systems. Check if it connects with:
- CRM platforms (Salesforce, HubSpot, Zoho, Microsoft Dynamics)
- Helpdesk & Ticketing Tools (Zendesk, Freshdesk, ServiceNow)
- Marketing & Sales Automation (Marketo, Pardot, Outreach)
- Workforce Management (WFM) & Analytics Platforms
If your company requires a customized setup, ask if the provider offers APIs or low-code integrations to tailor the system to your needs.
Set a Budget
Determine your monthly budget per agent and compare pricing models. Many CCaaS providers offer pay-per-user, pay-per-minute, or usage-based pricing. Be aware of hidden costs, such as add-ons for analytics, AI features, or advanced integrations.
Take Advantage of Free Trials
When comparing hosted contact center software, request free trials and demo videos from several top providers. Ask your agents to use these platforms, getting a feel for the interface and features. Note how often you use each channel and how much value you get from each feature.
Review Customer Support & SLAs
Reliable customer support is critical for resolving technical issues quickly. Check for:
- 24/7 technical support availability (phone, chat, or email)
- Guaranteed uptime & Service Level Agreements (SLAs) (99.99% uptime is ideal)
- Response time commitments for technical issues and outages
Read Reviews
There are thousands of companies out there that have written about their experiences with each contact center provider on the market. Compile research online, read reviews, and ask your peers about their experiences with contact center solutions.
Top Providers of Hosted Contact Center Solutions
RingCentral
RingCentral is a cloud-based solution that combines voice, digital engagement, and AI-powered automation to enhance customer interactions. It offers omnichannel routing, real-time analytics, and intelligent call management tools to streamline workflows. Businesses can integrate RingCentral with popular CRM platforms like Salesforce, Zendesk, and HubSpot to create a unified customer experience.
- Omnichannel customer engagement: Support voice, chat, email, SMS, and social media messaging in a single platform for maximum ease
- AI-powered call routing: Use machine learning to route customers to the best agent based on sentiment, intent, and skills matching
- Workforce engagement tools: Includes AI-driven workforce forecasting, performance analytics, and agent coaching capabilities
- Real-time reporting & analytics: Customizable dashboards track call volumes, agent efficiency, and customer satisfaction scores
- Seamless integrations: Pre-built plug-ins for leading CRM, helpdesk, and collaboration tools
Best for: Businesses checking for a highly scalable, AI-powered contact center with omnichannel capabilities and deep CRM integrations.
Nextiva
Nextiva is a user-friendly CCaaS platform designed for scalability, reliability, and automation. It offers carrier grade 99.999% uptime, ensuring high availability for customer interactions. Nextiva includes advanced AI-powered tools for speech analytics, sentiment analysis, and intelligent call routing.
- Intelligent call routing: AI-driven call distribution based on agent skills, past interactions, and customer needs
- Omnichannel communication: Connect with customers via voice, email, live chat, SMS, and social media
- AI speech analytics: Analyze customer sentiment and detect keywords to enhance interactions and improve coaching
- Drag-and-drop IVR builder: Allow easy customization of automated menus and self-service options
- Real-time monitoring & alerts: Management can track agent performance and customer satisfaction metrics in live dashboards
Best for: Small to mid-sized businesses looking for a cost-effective, AI-powered contact center with high uptime and strong automation tools.
Five9
Five9 is a comprehensive enterprise-grade contact center solution known for its AI-driven automation, workforce optimization tools, and omnichannel engagement capabilities. It leverages predictive dialing, natural language processing, and real-time analytics to enhance customer service and sales team outreach.
- AI-powered virtual agents: Automate interactions with chatbots and IVR to reduce call volumes
- Predictive dialing & outbound automation: Increase agent efficiency by connecting them only to live calls
- Real-time analytics & coaching: Supervisors can listen in, whisper, or take over calls with AI-driven insights
- CRM & AI integrations: Seamlessly connect with Salesforce, Microsoft Dynamics, and other enterprise platforms
- Scalable cloud infrastructure: Designed to support contact centers of all sizes, from startups to global enterprises
Best for: Enterprise-level contact centers needing AI-enhanced automation, predictive dialing, and advanced analytics.
Talkdesk
Talkdesk is a highly customizable cloud contact center offering AI-driven automation, self-service capabilities, and omnichannel engagement. It’s built for flexibility, allowing businesses to design workflows and integrate with CRM and business intelligence tools.
- AI-powered customer self-service: Use virtual agents and chatbots to handle routine inquiries
- Omnichannel engagement: Supports voice, email, SMS, chat, and social messaging in a single platform
- Workforce engagement & quality management: AI-powered tools improve agent training, performance, and productivity
- Real-time & historical analytics: Offers deep insights into customer interactions and operational efficiency
- Industry-specific solutions: Includes tailored contact center features for healthcare, finance, and retail
Best for: Companies who want a highly customizable, AI-enhanced contact center with strong self-service and workforce optimization features.
Genesys Cloud CX
Genesys Cloud CX is a feature-packed, AI-powered contact center solution designed for scalability, omnichannel engagement, and predictive analytics. It offers real-time and historical reporting with customizable dashboards, allowing businesses to track KPIs like agent performance, queue activity, and customer sentiment.
- Customizable dashboards: Drag-and-drop widgets, graphs, and charts for a personalized analytics experience
- Advanced filtering & drill-down reports: Refine data views by agent, queue, time period, or other key metrics
- AI-driven predictive analytics: Use machine learning to forecast call volumes, optimize staffing, and detect trends
- Real-time alerts & anomaly detection: Automated notifications highlight deviations from performance benchmarks
- Omnichannel analytics: Track customer interactions across voice, chat, email, and social channels for an all-around and comprehensive view
Best for: Enterprise contact centers seeking AI-enhanced reporting, predictive analytics, and customizable data readouts and reporting.
Nice CXone
Nice CXone is an AI-driven cloud contact center designed for large-scale operations requiring advanced automation, analytics, and workforce optimization. It integrates AI-driven predictive analytics, speech recognition, and omnichannel routing to improve customer experiences.
- AI-powered call routing: Use real-time data to match customers with the best agent based on sentiment and intent.
- Advanced speech analytics: Analyze customer conversations to detect trends, compliance issues, and coaching opportunities.
- Omnichannel experience: Combine interactions across voice, SMS, email, chat, and social media.
- Workforce engagement & automation: Includes scheduling, performance tracking, and AI-driven coaching tools.
- Proactive customer engagement: Use AI to predict customer needs and initiate proactive support.
Best for: Large enterprises and regulated industries that need AI-driven analytics, proactive customer engagement, and compliance-grade security.
Prefer a Video Overview? We've Got You
Compared to an on-premise call or contact center, hosted contact centers simplify the whole company’s experience. They’re easy to manage, they optimize agent performance, and they include advanced features like outbound auto dialers. Use the list above to choose the best CCaaS software solution for your company.
