This is the second part of our two-part blog series on the 2025 trends contact center leaders need to know. Read Part 1 here.

We are continuing our 2025 outlook for the contact center, and AI remains at the forefront. While AI adoption is accelerating, the assumption that all contact center deployments are cloud is shifting. For CX leaders managing premise-based contact centers and looking to maximize AI’s potential this year, here are two trends to consider.

Trend 1: Shifting Contact Center AI Strategies & Mitigating Costs

Premise-based contact centers have been built with a mix of purpose-built applications and large-scale, complex deployments that have taken years to build. While cloud adoption has surged, there are many long-standing concerns about cloud security, reliability, scalability, and performance. In regulated markets like healthcare, finance, government, and education, premise-based systems provide the highest degree of control and protection over sensitive data associated with customer and patient records.

For 2025, there are additional factors causing CX leaders who have already gone to the cloud to rethink their decisions. Aside from the ongoing base costs reaching a breaking point – especially if CX results aren’t obvious – there are various hidden costs that were not factored in earlier, such as data transfer and the need for specialized IT services. Premise-based deployments may have a high upfront cost, but the ongoing costs are far more predictable, making this a more economical option in the long run.

Public cloud represents the path of least resistance, where contact centers can go to the cloud quickly and easily. With the bar for CX constantly evolving, contact centers soon find that public cloud deployments have limited ability to support customized needs or integrate new applications that weren’t used initially. Going to a private cloud is one way to mitigate or eliminate risks from public cloud deployments, but that approach is more costly, and most contact centers cannot justify the move financially.

For contact center leaders looking for cost predictability and the flexibility to innovate, revisiting on-premise models is a compelling alternative.

Trend 2: Expanding Contact Center AI Innovation for Cloud & On-Premise

In 2025, leaders will have more opportunities to expand contact center AI innovation across all deployment models, including cloud, hybrid and on-premise. This deployment flexibility is key to all contact centers needing to meet ever-evolving CX demands. With these deployment options, CX leaders can modernize their contact center and implement tailored AI solutions to meet their unique business needs and operational priorities.

Many premise-based contact centers are large-scale and have complex integration requirements that require a high degree of customization and expertise. Having flexible contact center AI solutions that can be aligned with an organization’s specific requirements will be key to delivering successful CX outcomes.

Both cloud and on-premise deployments offer distinct advantages, and there are several factors to consider to ensure the solution will meet your business requirements and goals, including flexibility, scalability, customization, control, security, and ease of integration. AI innovation is expanding on both platforms with enhanced automation and self-service capabilities, omnichannel support, AI-based insights and analytics, and AI-powered agent assistance and knowledge bases.

Supporting on-premise and hybrid contact centers with AI requires innovation and expertise. Vendors that offer adaptable solutions will be valuable partners in helping contact centers succeed with contact center AI in 2025.

Upstream Works provides advanced AI capabilities for on-premise, cloud and hybrid contact centers. Upstream Works Omni AI Hub is a centralized framework and suite of AI orchestration capabilities that allow contact centers to operationalize their choice of AI, accelerate innovation, and enable contact center automation. Learn more here.