When Ray Valentine first started managing technology for major call center providers 20 years ago, you had do everything yourself. "I came up through the old, big, Avaya premise-based heavy iron solutions," Valentine says. "You had to have dedicated support teams to manage, install, and configure all of that infrastructure," says Valentine says. "Then you had to have the data centers with all the infrastructure to support those systems and keep them reliable." [Related: Big Data Analytics Gold for the Call Center]The environment tended to be inflexible and--without the proper redundancies in place--unreliable. More importantly, the capital costs were so high that large companies with big pockets dominated the call center industry.Reaching for the CloudToday, as CTO for call center operator KM2 solutions, Valentine has wholeheartedly embraced the cloud. The Atlanta-based company, which operates call centers in the Caribbean and Central America, was an early adopter of InContact's hosted contact center software four years ago. "We're pretty big on the cloud as a strategic direction," says Valentine. "We wanted a cloud provider with the ability to say yes when we asked them to add 100 seats tomorrow." \n[Related: 5 Ways Enterprise IT Can Embrace the Cloud]\nKM2 had made previous attempts to implement hosted or a combination of hosted and on-premises software with little success. They ran into some scalability and reliability issues. In addition, "a lot of folks say they offer cloud services, but it's not really cloud. They take their legacy, on-premises-based solutions and put them in a cloud-like scenario, but it's not built to be in a shared infrastructure environment," Valentine says. "You find yourself limited in the features you might want to use because when you turn something on it impacts someone else on the shared hardware."KM2 needed full-featured software that could expand and contract based on business needs and enable the company to serve a number of vertical industries; two of the company's biggest niches are auto lenders and newspaper publishers.[Related: 7 Lessons of the Offshoring Pioneers]Moving to the cloud enables Ray and his team to focus on "customer differentiating factors as opposed to me managing telco providers and dealing with ordering T1s," he says. Today, he's more likely to be helping a customer devise a social media strategy or a multi-channel communication plan than dealing with PBXs or routers.[Related: 7 More IT Outsourcing Lessons From Offshoring Pioneers]That's still unusual in the call center industry, says Valentine, where many technology leaders are loathe to let go of the technical reins. "It's something I talk about a lot with my peers. They fear that loss of control," Valentine says. Learning to Let Go"You have to have a very good relationship with your vendor. But a lot of [call center providers] have so much sunk cost in legacy infrastructure that it's really cost prohibitive for them to move," Valentine says. "And to let go of knowing exactly what's going on with this particular T1 is a challenge for some CTOs." KM2's move to the cloud has enabled it to expand quickly, from its first delivery center in St. Lucia--a South Caribbean location it liked for the accent-neutral English among the population--to three more locations. Most recently, KM2 set up shop in Honduras, where the company can provide English and Spanish contact center services and enjoys a workforce largely either in college or with bachelor's degrees. "We offer a very competitive wage and nice work environment," says Valentine. "In the U.S., a call center job is a first job and, typically, a stepping stone. There's a tremendous amount of turnover." At KM2's Caribbean and Central American locations, turnover is 25 percent versus 100 percent stateside, Valentine says.And the cloud enables KM2 to compete with larger competitors for business. Some Fortune 500 companies, like big banks or technology companies, are still naturally drawn to contact center providers with 30,000 employees. But others see KM2 as a viable alternative, particularly to those located offshore in the Philippines and India. Valentine says their costs are now competitive and corporate leaders appreciate the ability to take a quicker plane ride to check on operations. "[The cloud] is a giant killer," says Valentine. "It used to be that only very large companies could afford the suite of products that a large client would need--100 percent call recording, screen capture, advanced IVR and CTI integration. Those were expensive tools with long-term commitments. With cloud solutions, a smaller company can compete with larger organizations."Clients are "pretty accepting" of the cloud-based software, says Valentine. About half use it while the others require KM2 to operate on their own software. In those cases, KM2 is used as what is called a "champion challenger" for a client's internal contact centers. In those cases, clients want outsourced call center providers to compete against their own agents and view the key performance indicators for external and internal groups on a single system.Still, Valentine is sold on cloud-based systems for the future. "The advantages far outweigh the disadvantages," he says. "Instead of putting all of your time into the infrastructure, it changes you focus to the features and quality you're delivering to clients."Stephanie Overby is regular contributor to CIO.com's IT Outsourcing section. 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