Extending the Value of IP Communications Investments with SIP Trunking
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1 50 Years of Growth, Innovation and Leadership Extending the Value of IP Communications Investments with SIP Trunking SIP Trunking Enables a Next-Generation Communications Environment A Frost & Sullivan White Paper
2 Frost & Sullivan EXECUTIVE SUMMARY Forward-thinking organizations are gaining a competitive advantage by migrating from traditional voice services to Voice over Internet Protocol (VoIP). Many businesses acknowledge the value of network convergence and have already deployed premises-based IP telephony systems to reduce costs, increase flexibility, and enable collaboration. However, there is a component that is often unaddressed. Connection to the Public Switched Telephone Network (PSTN) is still most commonly done over costly traditional phone lines, which do not support the full benefits of IP communications solutions. However, there is an opportunity to extend IP communications beyond the enterprise and out to the public phone system, including partner and supplier networks. Innovative SIP trunking services address the shortcomings of traditional phone lines to deliver additional cost savings and productivity benefits to businesses with IP telephony investments. Session Initiation Protocol (SIP) helps streamline and simplify communications through the integration of voice with video, instant messaging, conferencing, collaboration, and presence across multiple platforms and devices. That is why SIP has become the de-facto standard for next-generation communications services and solutions. Businesses deploying SIP trunking today are likely to enjoy accelerated growth and greater profitability through operational efficiencies and a more productive workforce. With SIP trunking growing in popularity, an early head start can add value to existing communications investments and boost an organization s competitive positioning in the long run. 2 Frost.com
3 Extending the Value of IP Communications Investments with SIP Trunking INTRODUCTION Smart investments in communications and information technologies can improve operational efficiencies and enhance employee productivity. Many businesses have invested in premisesbased IP telephony systems, which converge their internal voice, data, and video networks, thereby reducing costs and delivering advanced communications capabilities. To address evolving customer needs, carriers have launched SIP trunking services that bring businesses closer to fully converged communications environments. Many businesses are taking advantage of this opportunity to deploy SIP trunking for its numerous benefits. Frost & Sullivan research finds that more than 7 million North American users had adopted such services in North American SIP trunking users are expected to reach 59 million by SIP Trunking Adoption VoIP Access and SIP Trunking Services Market: Installed User Base Forecasts (North America), Users (Million) User Growth Rate (%) Users (Million) Year User Growth Rate (%) Users (Million) User Growth Rate (%) Compound Annual Growth Rate ( ): 35.0% Note: All figures are rounded; the base year is Source: Frost & Sullivn analysis IP COMMUNICATIONS SAVE MONEY AND ENHANCE PRODUCTIVITY IP telephony is now mainstream. For more than a decade, businesses have been migrating from traditional systems to IP telephony. IP telephony reduces the cost of internal (site-to-site) calls by shifting voice traffic from the PSTN to the company s IP network. An IP communications environment empowers in-house IT staff to perform simple moves, adds and changes themselves, which can lower expenses related to external support. Converged networks also enable centralized management to reduce overall network monitoring, management and configuration costs, and lower overhead through the merger of an organization s telecom and IT staff. Frost.com 3
4 Frost & Sullivan Frost & Sullivan s 2011 Investment Decisions in Communications and Collaboration Products and Services among North American Decision-Makers study surveyed 205 C-level executives and IT staff to find that 28 percent of respondents have deployed IP PBX within their organizations. The study also reveals that businesses primarily deploy IP telephony to reduce costs and enhance employee mobility. Perceived Benefits of IP Telephony Most Important Benefits of IP PBX (North America), 2011 (n=57) Total of top-three rankings #1 Rankings Reduce costs Enhance employee mobility Improve customer service Single point of access to multiple communications Help improve employee s work/life balance and general Accelerate decision making Improve collaboration and productivity across 33 7 Reduce travel 26 7 Help advance your corporate environmental goals 26 5 Respondents (%) Source: Frost & Sullivan analysis Improvements in voice quality, reliability, and interoperability have accelerated IP telephony adoption in recent years. In 2010, IP line licenses accounted for approximately 74.3 percent of total telephony licenses shipped globally and are expected to account for close to 93 percent in By 2011, approximately 40 percent of North American businesses had already deployed IP telephony systems with IP endpoints. As technologies mature and customer awareness increases, the value proposition of IP telephony is evolving. Businesses are increasingly deploying IP telephony as the foundation for advanced communications applications such as PC-based soft clients; rich presence information; audio, video and Web conferencing; mobility; and multi-media contact centers. Unified Communications (UC) enhances the value of IP telephony and convergence. New, SIP-based communications solutions enable more cost-effective integration of various IP applications and platforms into end-to-end unified communications environments. Just as VoIP and IP telephony enable network convergence, UC paves the way to application convergence. A UC solution represents an integrated set of voice, data and video applications, which simplifies communications for end users through intelligent presence and a unified client, and enriches the communications experience through contextual access to business-process information. 4 Frost.com
5 Extending the Value of IP Communications Investments with SIP Trunking The Unified Communications Architecture Application Convergence Boosts Productivity Organization Video Conferencing Web Conferencing Audio Conferencing Partners Mobility UC Interfaces - Portals - - Applications - - Devices- Collaboration Customers Messaging Business Apps Telephony Suppliers Source: Frost & Sullivan analysis Realizing the full benefits of IP telephony and UC requires businesses to adopt next-generation carrier services that enhance the value of their investments. SIP trunking offers that missing element. SIP TRUNKING AMPLIFIES THE BENEFITS OF IP TELEPHONY AND UC INVESTMENTS Businesses can reap greater benefits from their IP telephony and UC investments by integrating their internal networks with a SIP trunking service for end-to-end IP communications. SIP trunking services involve the provision of converged circuits using VoIP or SIP technologies, which helps consolidate voice and data access lines and significantly reduce monthly costs. Furthermore, SIP trunking providers typically offer local dial tone, long-distance calling, and call-management and control features such as extension dialing for internal company communications. These capabilities are delivered at a flat monthly fee that offers significant cost savings compared to traditional voice services. In some scenarios, SIP trunking can also be bundled with various network-based communications applications and capabilities, such as hosted auto attendant, voic , unified messaging, contact center, mobility or data services including Web hosting, Web , managed security, and so on. Frost.com 5
6 Frost & Sullivan Reduce Costs and Simplify Operations SIP trunking services generate immediate benefits, as follows: Access line consolidation. By converging voice, video, and data over a single access line to the carrier network, businesses can eliminate redundant digital subscriber line (DSL), cable, T1 or Ethernet connections and thus reduce monthly telecom expenses. Economical delivery of voice services. A SIP trunk can support a larger number of users and simultaneous calls than a traditional voice line. Therefore, SIP trunking allows organizations to reduce the number of voice lines required for business communications. Free on-net calling. SIP trunking services commonly include company-wide extension dial plans and toll-free inter-office calling, which typically accounts for a large portion of multi-site business voice costs. More economical local and long-distance voice plans. The use of VoIP technologies allows service providers to offer compelling bundles of local and long-distance minutes or competitive per-minute rates, which significantly reduce off-net voice costs. Access to local numbers in geographically dispersed sites. SIP trunking provides customers with local points of presence in multiple cities, which enables them to eliminate expensive toll-free numbers used for customer service, sales, or technical support. Cost-effective and streamlined network management. Businesses deploying SIP trunking services can reduce the time they spend managing disparate networks and repurpose their IT staff for more strategic tasks. Streamlined telco relationships. Converged voice, video, and data services allow businesses to reduce the number of provider relationships in order to streamline service provisioning, service level agreements (SLAs), contracts, billing, ongoing service management and troubleshooting, and to improve accountability. Enhance Existing Investments in IP Communications SIP trunking services offer a long-term path to next-generation communications. As communications architectures evolve, there is a growing interest in SIP trunking among businesses that have already deployed IP telephony or UC solutions. SIP trunking allows such businesses to significantly reduce the total cost of ownership (TCO) of their communications infrastructure. Many UC services such as messaging, mobility, application sharing, and conferencing can be more efficiently deployed over SIP. By using SIP trunking services, organizations with IP PBXs or UC solutions can eliminate the gateways and other border control elements needed to connect their next-generation communications systems with the PSTN. SIP trunking also enables centralized application management and thus drives operational efficiencies. An advanced UC environment with SIP trunking enhances user 6 Frost.com
7 Extending the Value of IP Communications Investments with SIP Trunking productivity and provides access to applications based on user roles and actual needs, rather than their location, platform, or device. The savings gained through SIP trunking may be applied to fund other investments, including new communications applications or expanded roll-out to more users. SIP trunking offers investment protection and sets businesses on a long-term infrastructure evolution roadmap. SIP trunking also offers a migration path to hosted or cloud communications. For businesses considering cloud communications as a future option, SIP trunking bundled with some networkbased features provides an opportunity to test the quality and reliability of hosted services as well as a phased migration to the cloud. Gain a Competitive Advantage Organizations that successfully align SIP trunking with business needs and IT strategies can significantly improve their market positioning and gain a sustainable competitive advantage. They can use SIP trunking services to get ahead of the competition through more efficient operations and a more productive workforce. Advanced communications solutions enable them to become more flexible and nimble, and more easily adjust to evolving market conditions. Furthermore, SIP trunking allows businesses to improve collaboration, which helps accelerate decision-making and foster business growth. But to accomplish these objectives, businesses need to deploy SIP trunking from a reliable partner with a strong track record and proven network capabilities. The benefits of SIP trunking are most fully realized when services are delivered over a high-quality, IP-based network that helps ensure security, audio quality, and service availability. Multi-Protocol Label Switching (MPLS) networks offer end-to-end service level agreements and are typically suitable for multi-location businesses. SIP Trunking provisioned on dedicated Internet access is suitable for businesses as small as one location, and can use class-of-service routing to prioritize voice calls over Internet traffic, ensuring high call quality. CONCLUSION Businesses of almost any size and industry can benefit from SIP trunking services. Small and medium businesses with minimal on-premises PBX functionality benefit from the cost savings and access to network-based features and capabilities. Larger, distributed organizations can use SIP trunking to consolidate trunks and voice platforms, centralize management and administration, and reduce costs. It is for these reasons that the adoption of SIP trunking has recently experienced such rapid growth. As businesses increasingly deploy on-premises IP telephony and UC, they will also seek the next step to unlock the full benefits of converged, end-to-end, IP-based communications. Embracing SIP trunking is that next step. Frost.com 7
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