SMB Adoption of SIP Trunking: Why Vertical Segmentation Matters

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1 September 2010 Summary Current Analysis conducted ground-breaking research into IP usage and adoption plans within the U.S. small and medium-sized business (SMB) market. This research addressed the following issues within the SMB space: A profile of adoption and use of SIP trunking and converged voice services. The characteristics of existing customer premise equipment (CPE) and CPE suppliers used by SMBs. The telephony expertise of this customer base. Current product configurations and requirements. The current providers of SIP trunking / converged voice services. Customer-requested SLAs. Dave Lemelin Current Analysis Director, Custom Research The most important IP Voice service features and preferred delivery methods. The following summary provides some key vertical industry findings from the analysis. For access to the complete study findings, contact your Current Analysis account representative or the lead study analyst at or call at Europe +33 (0) Or visit our Web site: 1

2 Role of Third Parties in Trunk Selection Almost two-thirds of respondents reported that third parties such as VARs, agents or consultants were involved in their selection of a trunk service provider. This involvement ranged from being a source of information or providing suggestions, to making the final recommendation/decision. Figure 1 shows that respondents in the Education segment are most reliant upon third parties, while respondents in the Other, Retail, and Wholesale segments rely least upon third parties. Figure 1. VARs or Third-parties are Used as a Source of Information, to Provide Suggestions, or to Make the Final Recommendation/Decision Calling Features Our analysis explored the current use of 15 different calling features among respondents. See the end of this report for a complete a List of Figures. One of the more interesting findings was the wide variation in the use of 3-way calling among the vertical segments. While the research shows that Government and Education are the heaviest users of on-premises dialing, they also are the lightest users of 3-way calling. Figure 2. Most Commonly Used Features (3 Way Calling) Europe +33 (0) Or visit our Web site: 2

3 Calling Patterns Across all 823 respondents, the average number of calls handled by the PBX or key system per month was 5,559. This ranged from an average of 3,917 among the Engineering segment respondents on the low end, to 8,384 on the high end among Wholesale respondents. IT Services, with 7,663 monthly calls and Finance, Insurance and Real Estate (FIRE), with 7,614 monthly calls on average were also notably above the range reported by the other segments. Figure 3. Average Monthly Calls Handled by PBX or Key System by Vertical Industry Segment However, when it comes to room for expansion being a key consideration when choosing a trunk type, one of the heaviest users of current capacity (the FIRE segment) and the lightest user (the Engineering segment) are the most concerned, as shown in Figure 4. Figure 4. Providing Room for Expansion as an Important Issue Influencing Future Choice of Trunk Type (Top 2 or 3 Choices) Interestingly, IT Services is least likely to be concerned about future expansion, despite being heavy users of existing capacity. These anomalies suggest very different approaches to planning ahead vs. eleventhhour purchase decisions by vertical segment. The ability to accommodate future expansion capability is just one of 14 considerations influencing future trunk type decisions that were tested in our analysis. See the List of Figures for full details. Europe +33 (0) Or visit our Web site: 3

4 More Information Available This is just a small sampling of the data available on IP Voice and converged communications within the SMB market from our SMB Adoption of SIP Trunking report. The SMB space is the most highly contested segment of the enterprise communications market. The transition from traditional TDM solutions to IP and unified communications has been moving downmarket for several years. Equipment vendors, service providers, solution providers, integrators, and resellers today are all vying for the SMB sweet spot. Understanding the subtle differences between vertical industries in the SMB market can provide suppliers key competitive advantage in competing in this space. This analysis, coupled with Current Analysis experience in providing competitive intelligence and response services to our clients around the world in the telecommunications sector for over a decade, provides our clients a unique perspective in developing actionable competitive marketing and sales strategies. Europe +33 (0) Or visit our Web site: 4

5 SMB Adoption of SIP Trunking (Current Analysis, September 2010) Research conducted with 800+ SMB IP voice purchasers and infl uencers in the United States, analyzed by 10 key vertical markets; $4,995. List of Figures Current System Overview Current Operations Trunk provider MACD frequency and management Trunk technology type (ISDN, T1, SIP, Other) Trouble ticket frequency and management Number of extensions and telephone numbers Average trunk installation periods Contracted concurrent call sessions to the public Trunk use by network Number of DIDs Use of sub-groups Use of traffi c reports Traffi c report detail Trunk Purchase Decision Drivers Customer service (consumer) Client service (professional) Inbound sales Outbound sales Other call center General public Reasons for not selecting hosted/ip Centrex Trunk utilization solutions Satisfaction with current trunk provider Internal vs. eternal infl uencers in the purchase decision Information sources used in the purchase decision Call distribution Within the premise (served by the onpremises PBX or Key system) Inbound Outbound local Involvement of third parties in the purchase Outbound domestic LD decision and implementation Features and Usage The importance of SIP as a consideration 3-way calling Stand alone vs. corporate network (VPN) confi guration Account Codes Authorization Codes Planned Trunk Purchases Auto Attendant Timing on next planned trunk/pbx purchase Planned adoption of SIP vs. PRI or T1 Preferred sources of information Call Forwarding Call Hold Call Park/Retrieve Factors infl uencing future choice of trunk type: Call Transfer Availability from preferred providers Call Pick Up Cost / price or expectation of cost / price Call Waiting Concerns about the technology Conference Calling Trust in the technology Dial in to PBX from other locations Control Flexibility Extension Dialing within Premise Extension Dialing across sites Experience with the technology Hunt Groups Network reliability Voice Mail Payback (ROI or TCO) Trunk Configuration Provides all features required Provides room for expansion Auto Attendant Recommendation or experience of peers Bursting channel Recommendation of third-parties (e.g., Caller ID equipment manufacturer, VAR, consultants) Direct Inward Dial Recommendation of preferred trunk provider Direct Outward Dial Same as existing system Direct Termination Overfl ow Service Level Assurances (SLAs) Extension Dialing across sites Europe +33 (0) Or visit our Web site: 5

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