TCO of the Cloud

Every now and again you get to be a part of something that's truly great. I've had such an opportunity this year as I've had the pleasure to work with Frost & Sullivan as they put together their "Premise Vs. Hosted Contact Center: Total Cost of Ownership Analysis". The report analyzes and compares the TCO of the general hosted and premise markets for contact centers. Much like listening to albums of your favorite band for years, and finally seeing a live show, I had the pleasure of hearing Ashwin Iyer, Global Director of the Contact Center Practice at Frost & Sullivan, present on the study recently.

Ashwin began his presentation by stating that most contact centers today are tasked with three primary goals:

  • Reduce customer service / support costs
  • Improve customer satisfaction
  • Increase revenue

At first glance, those goals seem like they wouldn't work well together. How can you improve customer satisfaction, for example, while lowering costs? If you lower costs, won't that reduce the ability to respond to customer needs?

One way that contact centers are working to accomplish these goals together is by looking to the cloud. As the results of the TCO study show, by moving the majority of the contact center applications to the cloud, the overall TCO of the system goes down significantly. Part of that cost reduction is in the time that personel have to dedicate to maintaining the system - time that they can spend instead on strategic goals.

5 year TCO Hosted Cost Savings Over Corresponding Premise Deployment
ACD Only 9% 10% 19%
ACD+ 21% 28% 39%
Full Function 23% 34% 43%

The cloud continues to grow as a strategic delivery mechanism for contact center solutions; as Ashwin's data illustrated, it continues to grow year over year. Many are making the shift not only for the TCO, but also for the scalability, built-in disaster recovery, and depth and breadth of the solutions, to name a few.