SIP: The Power Behind New Choices for Business Voice

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1 Business Services Report Series SIP: The Power Behind New Choices for Business Voice WHITE PAPER Produced by Stewart Schley, Founder and Principal of Stewart Schley Content, LLC, a Denver-based research and writing firm specializing in business and technology subjects.

2 Business Services Reports are designed to demonstrate how technologies help business owners and managers address key challenges, solve problems and achieve mission critical objectives.

3 SIP: The power behind new choices for business voice By Stewart Schley, Founder, Stewart Schley Content, LLC Not all that long ago, adding more capacity to a business phone network revolved almost entirely around a one-size-fits-all world of cables, copper wires and associated interfaces. To arrange for enough capacity to accommodate lots of incoming and outgoing calls, business operators ordered so-called trunks dedicated lines or bundles of circuits from the local phone company. As business boomed and telephone traffic rose along with it, the obvious (and in most cases, the only) solution was to graft on more bundled trunk capacity in the same way that new lanes might be added to a highway to allow for more vehicles. That s changing. A physical connection to the public phone network is still essential for most businesses, but today there are alternatives to calling up the heavy iron of a dedicated T1 line to achieve it. Easily the fastest-growing of them is known as SIP Trunking. More detail on SIP is below, but to start, it s an extremely reliable and cost-efficient way to connect business Private Branch Exchange (PBX) systems to the public phone network by leveraging the data-delivery attributes of Internet Protocol (or IP), the fundamental language of the Internet. For businesses that have PBXs and need more than just a few phone lines typically businesses with 15 or more employees a voice service that relies on SIP may be an ideal way to provide for high-quality, multi-featured digital voice services at a price point that s extremely attractive. As an underlying technology, SIP deserves much of the credit for producing the savings and the product flexibility that s now available in the businessvoice market. With SIP trunking, an office PBX system can connect to an IP voice network that s maintained to exacting standards by a cable or other telecommunications company, without the need to purchase large amounts of capacity in pre-determined T1 bundles. SIP makes the office PBX an extension of a private IP data network capable of transmitting vast amounts of digital content, including phone calls and Internet messages, in a highly reliable manner. It s a flexible platform, supporting a variety of voice products. These range from basic connectivity the raw capacity you need to support business phone services to managed services that include not only SIP connectivity but the

4 equipment that works with it, right down to the phones on your company s desks. Business voice services with brand names like Hosted PBX or Managed Voice are often derivations of SIP. No matter what flavor of SIP product is involved, there s likely to be a substantial cost benefit. Managing telephone traffic using SIP can save businesses significant amounts of money compared to acquiring and expanding T1 capacity. In turn, these reductions mean faster returns on investment on phone-capacity enhancement, compared to legacy trunking/ capacity solutions. And as a bonus, SIP Trunking offers a pathway to emerging multimedia communications enhancements like instant messaging, virtual/online whiteboards and other applications that can help businesses communicate internally, with customers and with vendors. Understanding SIP The three-letter acronym doesn t refer to a method for imbibing liquids, but instead references an agile offshoot of IP communications known as Session Initiation Protocol. The key word here is session. In IP parlance, a phone call that connects callers or an instant message that fires across the network is just that: a session. Making a session happen requires an established set of rules and procedures for first setting up the call or message exchange, and later ending it when the parties have hung up or the message is received. SIP is the set of rules and procedures that governs the creation and tear-down of a phone session or other type of data communications between two network end-points. Those end-points can be IP phones, multimedia servers, instantmessaging clients or other devices that speak IP. SIPconnect: A prescription for conversation The SIPconnect Technical Recommendation adopted by the SIP Forum in March 2011 defines how IP PBXs and IP service provider networks talk to each other in a seamless peering relationship. Among its benefits, according to the SIP Forum: Commonality. SIPconnect provides a common method for IP peering between SIP-enabled IP PBXs and VoIP service providers Standards. SIPconnect leverages existing SIP and related VoIP standards published by the Internet Engineering Task Force. Savings. Peering lowers service provider infrastructure cost and reduce the need for customer premises gateways Speed. A commonly accepted, standards-based approach reduces the time and effort needed to integrate new products into a service provider network. Features. SIPconnect helps service providers deliver enhanced, personalized services to IP-PBXs and extends rich-media services enabled by IP-PBXs across service provider networks Quality of Service. The recommendation defines methods for handling a range of technical considerations including Quality of Service, which refers to rules and procedures for assuring prioritization of voice calls and other critical data.

5 SIP is a robust, durable and reliable signaling standard first published by the Internet Engineering Task Force in It has since become what one industry publisher, the SIP Center, calls a strong, catalytic force shaping today s telecom industry. Today SIP enjoys broad support from business and enterprise customers. Its primary advocacy organization, the SIP Forum, has been established to help encourage the embrace of SIP as a cornerstone of the IP telephone age. The Forum s members include a wide range of wellknown communications equipment makers, telecom companies and non-profit organizations including CableLabs, a technology development and research arm of the North American cable industry. Businesses are catching on fast to the appeal of SIP. A March 2011 report by the market research firm Infonetics Research estimated U.S. business investment in SIP trunking rose 143% in Infonetics directing analyst Diane Myers called it a breakout year for SIP. Businesses are adopting SIP at a rapid clip partly because of its attractive ROI. Because it eliminates the need to invest in Public Switched Telephone Network (PSTN) gateways, Primary Rate Interfaces (PRIs) and other traditional infrastructure elements, SIP Trunking provides businesses a pathway to phoneand data-capacity expansion at a lower capital cost, and with only moderate capital investment escalation over time. In part, that s because the softwarebased interface devices required for SIP trunking support capacity expansion at a much lower cost per line than traditional interfaces. Also, SIP trunking allows more flexibility for businesses that require more line capacity, because it allows the addition of capacity in smaller increments than a pre-bundled T1 solution. The requisites for SIP trunking?: An office PBX that speaks the language of IP An edge device that can accommodate the SIP protocol (such as an SIP firewall) A telecommunications service provider that offers SIP Trunking Cable and telecom providers generally offer business voice solutions that make any or all of the above available to businesses. The good news is that business owners and their IT staffs have more choice available today in SIP Trunking than ever. The industry s embrace of a common IP-peering approach known as SIPconnect, which prescribes how business PBX systems and IP data networks communicate, has created an environment of improved equipment interoperability, meaning devices and technologies from different providers can be matched together in a SIP Trunking environment. That creates more purchasing flexibility and leverage for businesses. (Look for the SIPconnect Compliant certification mark on validated products.)

6 The cable industry has been especially active on the SIPconnect front. The SIPconnect 1.1 specification adopted in March 2011 was based in part on input from CableLabs. Investment scorecard SIP Trunking saves money, compared to legacy techniques for voice traffic expansion, in several ways: Reducing total cost of ownership. Fewer trunks and lower costs per line are hallmarks of SIP Trunking. Eliminating PSTN bridges. SIP Trunking is an efficient alternative for businesses since it doesn t require additional T1 lines, Primary Rate Interfaces or PSTN gateways. More efficient use of capacity. SIP Trunking eliminates the need to provision the business phone network for peak usage, or the maximum presumed demand for capacity. Instead, SIP Trunking takes advantage of the inherent flexibility of IP communications by intelligently allocating bandwidth among (prioritized) voice traffic and irregular, bursty data transmissions. The bottom line is that businesses can effectively get more use from less capacity. Flexibility in adding lines. Rather than adding an entire23-line T1 bundle and a corresponding line card, businesses using SIP Trunking can add voice capacity in smaller line path increments, or by adjusting the bandwidth allocation between voice and data traffic. Either way, costs are significantly lower. More agile management. Because SIP Trunks are software-based and connected via IP, managing them remotely is easier and less expensive than is the case with traditional phone network interconnects. Monthly SIP Trunking pricing varies by telecommunications provider, but generally revolves around two key metrics: the number of simultaneous call sessions a business might need, coupled with the number of direct-inward dial numbers (a block of phone numbers distributed to a PBX) required. New IP services Even though cost savings may be the big attraction, SIP also is appealing for its ability to support emerging communications services that can benefit business. As the SIP Forum states, We are at the beginning of an explosion of new services under development by significant Internet service providers and by vendors of Internet technology based on SIP.

7 The emerging business toolset supported by SIP includes a variety of real-time communications applications. Among them: Video conferencing Tele-presence, or the ability to indicate and discern who s available online in real-time Instant messaging Virtual whiteboard collaboration Multiple device support, or the ability to apply a single phone number to reach employees/associates no matter what device they re using Momentum clearly is on the side of SIP, if for no other reason than the fact that SIP is tightly aligned with the exploding IP communications market at large. In addition, there are business-specific advantages. As an enabler of alluring new business communications capabilities, and as a flexible solution for businesses that want more control over their voice network capacity, SIP Trunking is a major contribution to improving the options for business telephone services.