The SIP Surge

SIP trunking continues to steal the headlines in the world of VoIP phone services, but it represents only a fraction of the total business trunks in service today. So why all the hype about SIP?

SIP (session initiation protocol) experienced slowness in its early adoption stage, which is not unusual considering that legacy TDM solutions have been generally reliable and around for a long time. SIP has had to earn its place in the network domains of the small and medium enterprise, and that’s exactly what’s happening! The fact is that despite a sputtering economy, SIP trunking deployments doubled last year, making it one of the best performing VoIP services. And according to industry sources, the SIP trunking market in North America, which closed 2009 at $717.3 million in revenue, is projected to grow to $3.9 billion in revenue by 2016. That represents a seven year surge in growth of 544%!

You may ask, “What’s driving the SIP trunking market?”

It’s already an overly exploited VoIP industry term, but it still holds the promise of SIP – convergence, the ability to bundle voice and data on a high speed Internet facility. With TDM, a PRI or T1 provides up to 23 and 24 channels respectively, which for the large enterprise may still work well, but for the small and medium business, trunk capacity is a cost issue for which SIP trunks provide an economical solution. Simply stated, bundling eliminates phone lines and associated costs. And since SIP trunks can be ordered one at a time and then over-subscribed per number of phone stations, SIP becomes an even more attractive cost saver. Taking it yet another step, for businesses with multiple locations, SIP may be configured as centralized trunking that leverages the Internet cloud for inter-location traffic – another cost benefit.

Finally, SIP is a foundational service of other emerging business VoIP services, such as UC (unified communications). UC represents the latest in integrated IP services like instant messaging, presence information, IP telephony via PC as well as IP phone, video conferencing and speech recognition – all subjects of our future blog posts!