What Is a Hosted Contact Center? + Benefits and Key Features
By Danylo Proshchakov
| 11. April 2024 |
Call Center
By D. ProshchakovDanylo Proshchakov
| 11 Apr 2024 |
Call Center
    By D. ProshchakovDanylo Proshchakov
    | 11 Apr 2024
    Call Center

    Hosted Contact Center: What It Is, How It Works & Why You May Want One

    A hosted contact center solution gives your customers what they want: Multiple support channels, fast responses, and personalized experiences. And, it does it while streamlining workflows and saving your business money.

    As for the on-premises phone system? It simply can’t keep up. 

    By ditching your on-premises system for a hosted solution, you can improve contact center efficiency and accelerate global success. But wait, we’re getting a little bit ahead of ourselves here. 

    What exactly is a hosted contact center? What are its benefits and features? Let’s break it down to help you decide whether to make the switch.

    Key Takeaways:

    • A hosted contact center is housed and managed by a third-party provider, whereas an on-premises solution is housed on your business’s physical premises.
    • Hosted contact centers are cost-effective, scalable, easy to integrate, and have advanced features.
    • You must consider the features, pricing plans, security, and customer support provided when you choose a hosted contact center service.

    What Is a Hosted Contact Center?

    A hosted contact center is a communications solution in which all of the hardware and software are hosted off-site by a third-party provider. This could be at the provider’s physical location or, more typically, in the cloud. 

    The main purpose of a hosted contact center or hosted call center solution is to provide businesses with cost-effective, secure, and feature-rich customer communications. 

    Need a refresher on contact center vs call center? A contact center provides omnichannel customer support via multiple channels, including phone, social media, email, and live chat. A call center provides telephone support only.

    How a Hosted Contact Center Works

    With a hosted contact center solution, you pay a subscription fee to a third-party provider, who then gives you access to the hardware and software you need. The provider is responsible for updating and maintaining the solution, taking those concerns off your shoulders.

    Discover top contact center software providers to match your process optimization.

    On-Premises vs Hosted Contact Centers: The Fundamental Differences

    An on-premises contact center is one that’s located within your physical premises and managed by your company. A hosted contact center is housed (hardware, software, and infrastructure) off-site.

    Here’s a table that sums up the main differences:

    On-Premises Contact Center

    Hosted Contact Center

    Upfront Costs

    High—businesses must purchase expensive hardware, software, and licenses, as well as personnel to install and configure them.

    Low—all you need are VoIP devices, a monthly subscription, and an internet connection.


    Time-consuming setup and deployment that can take weeks.

    Easy setup and deployment that’s handled by your provider—you can be up and running in a matter of hours.

    Long-Term Maintenance Costs

    High—hardware must be manually maintained and upgraded.

    Low—providers are responsible for maintenance, updates, and patching.


    Basic calling features only.

    Advanced, modern calling features.


    Hard to scale.

    Easy to scale.


    Difficult to integrate with modern business applications.

    Can natively integrate with a wide range of applications.

    Benefits of a Hosted Contact Center

    Let’s dig deeper into the benefits of using a hosted contact center solution.

    Cut Operational Costs

    Hosted contact centers can drastically decrease your upfront investment as there’s no need to purchase expensive hardware or hire experts to install it. And, with no hardware to maintain, you don’t incur the related costs of utility bills, server rooms, upgrades, repairs, and all the other overheads that eat into your budget.

    Plus, hosted contact centers support remote working. It’s not only cheaper to onboard remote employees, but you don’t incur additional overheads, such as extra office space, equipment, and utilities.

    Scale Up and Down as You Need

    Scaling up and down with a legacy system is risky. If you want to accommodate more employees, add new features, or expand into global markets, you need to make costly, complex infrastructure changes. And if you want to scale down, you might be left with idle resources. 

    With a hosted system, you can add and remove new users and features to meet immediate demands and drive sustainable, even global, growth. 

    PlanRadar’s partnership with CloudTalk is a great example of how a hosted solution can help achieve this. 

    PlanRadar quickly realized that they were “in dire need of a reliable and flexible VoIP solution that could handle [their] international communication requirements”

    So, they traded their legacy VoIP system for CloudTalk and leveraged the 160+ international phone numbers on offer along with speedy number porting and streamlined number acquisition.

    The result was a 70% increase in call handling efficiency and, in 2023, the handling of 144,652 calls using 585 international numbers. That’s a growth of 122.14%.

    Integrate More Easily With Existing Tools

    Attempting to integrate legacy systems with other tools can result in data loss, corruption, security vulnerabilities, downtime, and a host of other risks.

    On the other hand, cloud-hosted phone systems are built for integration. Many providers—CloudTalk included—offer native integrations with business tools, including your CRM. 

    So, you can connect your customer data to your phone system to empower agents to provide personalized experiences.

    Access a Wider Range of Features

    On-premises systems can typically only provide basic calling functionalities. Hosted contact center solutions, on the other hand, are packed with sophisticated features that drive speed, efficiency, and quality customer interactions. 

    These features include things like smart IVR, customizable routing, and in-built analytics. Interested? Let’s discuss these features in more depth.

    Must-Have Hosted Contact Center Features

    What essential features should you keep an eye out for when you’re shopping around for a hosted contact center solution?

    Discover 12 crucial features that every worthwhile call center software has as part of its package.

    Interactive Voice Response (IVR)

    Interactive Voice Response is an automated system that interacts with your customers and helps direct them to the right department. 

    IVRs improve call routing, reduce average call duration by 40%, and boost customer satisfaction. Callers can input their reason for calling into the system, and be directed to the right department in seconds—no frustrating call transfers or repeated explanations.

    Call Flow Designer

    A call flow designer is an interactive contact center tool that lets you build custom call flows. Using what you know about your customers, you can create an inbound calling journey that’s optimized for them—and your business. 

    CloudTalk’s Call Flow Designer has 20 different routing options. So, you can create consistent, reliable experiences that drive faster resolutions and increased satisfaction.

    International Phone Numbers

    International numbers help you gain your customers’ trust and establish a local identity—even if you’re based on the other side of the world. Plus, they reduce international calling fees.

    When you’re choosing a call center solution, opt for a provider that offers lots of international numbers. Make sure they cover the countries you currently serve, as well as any countries you’re looking to expand to. 

    You can’t go wrong with CloudTalk and its best-in-market 160+ international numbers to propel your global growth.

    Call Monitoring

    Call monitoring features give managers and supervisors the power to listen in on live calls and offer support to agents. 

    The three main call monitoring features to look out for are:

    • Call listening: Supervisors can listen in on agents’ calls to evaluate their performance and identify training opportunities.
    • Call whisper: Supervisors can join the call and offer support to agents without the customer being able to hear it, driving faster resolutions.
    • Call barging: Supervisors can jump in on live calls to talk to the customer themselves, preventing calls from heading south and improving satisfaction.

    Customizable Call Routing

    Effective call routing optimizes your resources. It ensures that calls reach the right destination as efficiently as possible while preventing bottlenecks and balancing call distributions. 

    The best hosted call center services offer a range of call routing options, including:

    • Skills-based routing
    • Fixed order routing
    • Round robin routing
    • Percentage routing
    • Smart caller-based routing

    Try to find a solution that offers maximum customizability by letting you route according to your own custom rules.

    Call Recording and Transcription

    Hosted contact center providers securely record and store your calls so that you can access them later for evaluation, training, and compliance purposes. 

    Of course, trawling through recordings can be inefficient if you’re looking for something specific. AI-powered VoIP solutions can transcribe your calls into text, allowing you to simply scan the transcript to find the information you need. Plus, they can automatically export call transcripts into your integrated tools.

    Power Dialer

    Power dialers are automated dialing systems that agents can leverage to improve high-volume calling campaigns. 

    They automatically dial numbers for you, eliminating manual dialing and giving agents more time to digest customer information and focus on their sales strategy.

    The best dialers for call centers can help your agents reach three times as many prospects each day.

    Workflow Automation

    Hosted contact center services provide functionalities that automate the time-consuming, repetitive tasks which can drain productivity and frustrate your agents. 

    Take manual data entry, for example. As well as being tedious and time-consuming, human errors when it’s done manually taint the quality of your data and, in turn, your insights. 

    Workflow automation eliminates manual data entry to improve productivity, data quality, and employee satisfaction. Other possible automations include after-call work activities, transcriptions, follow-ups, and ticket creation.

    Built-In Analytics

    Hosted contact center solutions collect real-time data that you can use to make strategic, data-driven decisions. 

    Using CloudTalk, you can view a range of metrics, including:

    • Total calls
    • Total number of calls answered
    • Average talk time
    • Number of missed calls
    • Outbound call success rate
    • Average answer time

    CRM Integrations

    An integrated CRM and phone system centralizes data and functionalities, streamlining workflows and empowering agents to deliver better customer experiences. So, look for a solution that offers one-click integrations with your existing CRM. 

    Most providers integrate with popular CRMs like Salesforce, HubSpot, and Zoho. But if you use a different CRM, such as Onpipeline or Kommo, double-check that the provider supports it.

    What Else to Consider When Choosing a Hosted Contact Center Provider

    Besides features, what else should you bear in mind during your search for hosted contact center software?

    Pricing Plans

    Hosted phone system pricing plans vary significantly, so you’ll want to establish a clear budget. It’s also wise to make a list of all the features you’ll need, as most providers have three or four different plans.

    Security and Compliance

    Triple-check the security measures put in place by your provider. For reference, CloudTalk secures your data with a range of strict cybersecurity measures: end-to-end encryption, multi-factor authentication, global data centers, penetration testing, regular software patching/updates, and more. 

    Don’t forget about compliance, either. Check whether your solution is compliant with industry regulations like STIR/SHAKEN and MAN.

    Reliable Help and Customer Support

    Verify that the provider offers accessible and responsive support by answering the following questions:

    • Availability: Can you get support around the clock, or is it on a 24/5 basis?
    • Accessibility: On what platforms can you access support? Are there self-service options?
    • Timeliness: How quickly does it take for support to respond? For reference, CloudTalk’s average response time is less than one minute.

    Cut Costs and Improve Productivity With a Hosted Contact Center

    With a hosted contact center, you migrate your communications software to the cloud without the expensive, time-consuming hassle of setup and maintenance. 

    Not only does this cut short and long-term costs, but it allows agents to leverage rich features and workflow automations that power productivity. 

    Eager to get started?

    Get in touch with our friendly sales team to learn more.

    Hosted Contact Center FAQs

    Who Should Consider a Hosted Contact Center?

    Any company that wants to deliver exceptional customer service without incurring high costs should consider using a hosted contact center.

    Is a Hosted Contact Center the Same as a Cloud Contact Center?

    Contact or call center hosting is when the contact center hardware and software are housed by a third-party provider. This could either be on the third party’s physical premises, or in their cloud data centers. 

    A cloud contact center specifically describes a solution housed in the cloud—whether it’s company-owned or hosted by a third party.

    How Can I Set Up a Hosted Contact Center?

    Once you’ve subscribed to a solution, the provider will walk you through the setup process. All you need to get started are VoIP-capable devices (PCs, laptops, mobile phones, etc.) and an internet connection.