Companies in Europe, Middle East and Africa are warming to the concept of hosted contact centre operations, new research suggests.

Revenues at hosting firms topped €277.9m in 2007 and will reach an estimated €1.45bn in 2014, according to figures from analyst firm Frost & Sullivan.

The biggest factor driving growth is the ability of companies to shift contact centre costs from capital to operational expenditure.

This reallocation, combined with reduced maintenance costs and ease of provisioning multi-sourced contact centres, makes hosted platforms an attractive proposition.

"Leasing contact centre technology allows organisations to deflect high upfront capital expenditure," said Kunal Kakodkar, a research analyst at Frost & Sullivan.

"This is an attractive business proposition for small and mid-sized enterprises that seek contact centre technology but do not have access to the capital expenditure required for expensive premises equipment."

A significant percentage of the total cost of ownership in a standalone contact centre is tied to ongoing maintenance, support and upgrades, explained Kakodkar.

Organisations also need in-house IT staff to man contact centres at each location, even if these human resources are not being fully utilised.

These costs can be reduced in a hosted environment since service providers can pass on cost savings from the economies of scale of shared resources to the enterprise.

However, Kakodkar warned that it is not all plain sailing for the hosted market. There is widespread perception that companies lose control over operations and compromise the security of critical customer data once they adopt the hosted model.

"Hosted contact centre suites have matured to a point where several technology vendors offer robust, secure multi-tenant solutions with tenant self-administration and enhanced data security," he said.

"The market can grow further once these technology advances are communicated to end users."