orget the “call center in a box.” It’s time to start thinking about the call center in a cloud. The cloud, that is, of the network itself.

For the first time, thanks to the emergence of IP as a switching platform, call centers have the option of dispensing with wide swaths of infrastructure. Many companies have taken steps to integrate IP into their call centers by putting it into their ACD or PBX, or migrating to an architecture that relies on IP for moving different kinds of data around.

But it’s also possible now to hire a partner to host all or some of the basic call center substrate in the network. Think about the possibilities: instead of investing huge sums into real estate, hardware and software, you can rent all the technology — in the form of IP applications — and operate anywhere in the globe for a per-minute price. It’s revolutionary.

“If someone wants or needs a call center in their business, before hosting they had two choices,” says CosmoCom’s (Melville, NY) Steve Kowarsky. “They could buy, build and operate one on premises; or go to an outsourcer who would buy, build and operate on their premises.”

Hosting, he says, provides a third alternative — one that involves your premises, but little or no technology. You get the technology — everything involved in the movement of the call from point to point, and the measurement of its results — as a service. Kowarsky says that hosted options have reached feature parity with premises-based equipment.

Given that parity, there are several advantages that come from hosting:

• Avoiding the capital expenditure of new equipment, which is considerable.

• Lowering the total cost of ownership also of the operating expenses: the care and feeding of that tech infrastructure.

• A lot more flexibility in terms of call handling capacity. If you are using a hosted model, you pay for what you actually use, rather than for your theoretical peak periods.

• And you achieve “location-independence” — IP hosting is unconcerned with where you locate your people. That means you can string together a network of mini-centers, move offshore, and explore different modes of operation, whatever business conditions dictate.

One sector where IP hosting is taking hold is among outsourcers themselves. Among mid-size outsourcers are many that were created through mergers and acquisitions that themselves own a hodgepodge of technologies from different vendors. Since the true core competency of an outsourcer is in agent management, using outside hosting relieves them of the technology headache and gives them more options for capacity management.

Also, outsourcers are beginning to offer hosting to some of their customers. Kowarsky describes it as an account-control issue. “Here you have an outsourcer that has a sales force out there, talking to call centers, talking about what projects they might outsource; they are in a good position to find projects that fit the hosted model, rather than the outsourced model, and they really know the call center business.”

According to a report last year from JupiterResearch, hosted IP call routing systems can be had “on a per-agent or per-port monthly fee, starting around $175, with a one-time setup fee of around $150 per agent.” That contrasts with an estimated cost of $175,000 to $225,000 for a 30-seat on-site IP call routing system. Jupiter calculates that pure IP becomes more affordable than hosted IP after about three years.

Hosting & Offshoring

Because it dramatically decouples location issues from operations, IP hosting is having an impact on the offshoring movement. And paradoxically, it may help integrate the offshore call center industry more tightly with the U.S. domestic industry.

EagleACD (New York, NY), for example, is an outsourcer that offers hosted IP tools to its clients globally. Currently, 65% of its traffic is headed offshore, primarily to India and the Philippines, according to EagleACD’s president and CEO, Kent Charugundla.

Charugundla says that initially, clients were requesting services that involved routing toll-free number traffic to India. But they soon realized that they were paying money for bandwidth to keep calls on hold in India. By using EagleACD’s hosted services, however, they could hold the call at the gateway in the U.S. and use bandwidth only when an agent is actually available.

That kind of cost-saving measure is just part of the attraction, he says. Using IP as the platform for hosting allows EagleACD to bundle value-added elements like Web chat functions, e-mail management, and predictive dialing, on top of the call routing substrate, using CosmoCom’s IP technology as the platform underneath its call center offerings.

And because IP allows the labor force to be distributed as widely as the client wants, even across continents, an offshore outsourcer can plausibly make the case to a potential U.S. end user that calls can be handled at whichever location is most appropriate. U.S. locations can be used for high value customers, offshore for lower value or less sensitive contacts. Location-independence allows the offshorers to offer India, Canada and the U.S. as part of a single multilayered package.

“The hosted model does not need to follow the offshore market,” Charugundla says. It enhances the role of home and remote agents, which he says is accelerating very quickly.

“They can use a virtual labor force and stay flexible to operate 24 hours a day without pigeonholing themselves into a physical box,” he explains. And by “box” he doesn’t mean the cabinet we used to think of as a switch. He’s talking about the building itself.