The Diminishing SIP Trunk, Not!

David Byrd : Raven Call
David Byrd
David Byrd is the Founder and Chief Creative Officer for Raven Guru Marketing. Previously, he was the CMO and EVP of Sales for CloudRoute. Prior to CloudRoute, He was CMO at ANPI, CMO & EVP of Sales at Broadvox, VP of channels and Alliances for Telcordia and Director of eBusiness development with i2 Technologies.He has also held executive positions with Planet Hollywood Online, Hewlett-Packard, Tandem Computers, Sprint and Ericsson.
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The Diminishing SIP Trunk, Not!

Recently, I have read multiple blogs and articles devaluing the role and savings associated with SIP Trunks. In each case I found the logic used compelling but the conclusion somewhat missing the mark. SIP Trunking, as exclaimed by ShoreTel for years, is not required for a Unified Communications (UC) implementation. However, there is a difference between a requirement and a desired component. SIP Trunking is a desired component of any UC implementation as it does over protocol support for various applications and, despite some naysayers, can deliver huge savings.

To comprehend the value of transitioning from TDM to VoIP/SIP connections to the PSTN, it is necessary to break the analysis down by business size and type. Given the nature of small businesses to be dependent on local consumers and businesses, the cost of the phone line is a major line item in the operational budget. If the cost of an individual line falls from $40-$60 per month to $12-$15, then the business sees an immediate cost savings in the range of 60%-80% or as much as $576 annually per phone line. If the primary nature of the business demands high telephone usage, then the business will see a considerable reduction in its operating costs.

So, consider how this differs from an enterprise with multiple locations, private WAN, perhaps even an MPLS enabled network. The enterprise fitting this description should see a dramatic reduction in the amount of voice traffic sent out to the PSTN. Its internal communications can now use any number of methods to leverage VoIP for internal calls and can utilize applications such as video, IM, or business collaboration platforms like Microsoft SharePoint.  The use of these communications methods do not require SIP and deliver cost savings and productivity improvements independent of SIP.  However, to defer a transition to SIP as the primary method of connection to the PSTN for these reasons is to deny easily attainable cost savings.

SIP Trunks still make it more efficient for an enterprise to size voice connections than a PRI which is usually purchased in increments of 24 channels versus the SIP option of individually purchased channels. Additionally, when the enterprise makes a voice call that must traverse the PSTN, the cost savings for local, long distance, toll-free and international calling still exist. A large enterprise with proactive management of its communications cost may only see small savings on long distance, toll-free and international calling. Estimate those savings in the range of 10%-20%. Now consider, what CIO is willing to tell his CEO or CFO that he or she could have save the company 10%-20% by using a very common technology, inexpensive to deploy, and leverage their investment in the built IP infrastructure, but decided not to do so. Not a good position.

Transitioning to SIP Trunking is not a business strategy, it is a tactical act. And there’s nothing wrong with that.

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