November 2007 Archives

After spending this fall at a number of industry events, talking to customers and giving some serious thought to the topic, it's now becoming clearer how SIP trunking will really play a role going forward.

First, a couple observations / predictions:

#1 - SIP Trunking is really a misnomer - it really should be "Media Gateway Service Provider".  Think about it - if you really distill it down, the concept of SIP trunking is just about where the media gateway resides and who owns it.  For the foreseeable future, the vast majority of calls from your home/office will terminate on a PSTN phone somewhere.  I'd guess that 98% or more calls still terminate on PSTN circuits.  This means that virtually all calls must go through a media gateway somewhere to get to the PSTN - so it's really about who owns the equipment.

#2 - SIP Trunking is about consolidation - much like many other business models, the opportunity is in consolidation of traffic, sharing common media gateway infrastructure across a number of subscribers.  So instead of each business owning their own media gateway and PSTN lines, if you can get businesses to share a larger media gateway, you make money while they save money. 

#3 - "Security" Dare I say it? - very few SIP trunking service providers have really nailed the security puzzle of SIP trunking correctly.  Most push the problem to someone else or depend on ineffective SIP firewall products.  IMHO - this is like TJ Max depending on WEP to secure their credit card transactions -  a corporate disaster waiting to happen.  Any CIO worth their salt will make sure to have a Session Border Controller (SBC) protecting their organization from outside attack.

#4 - Tragedy of the Commons - by building a business model that depends on consolidating customer's traffic together through a common resource, someone eventually pulls out their Erlang calculator to figure out the usage factor and number of ports available for all the subscribers/customers.  This may be fine for some customers, but most of the customers that are really enticed by cost reductions don't want or can't share resources with others.  Think call centers or financial services - applications that push thousands of calls per hour into the network. 

#5 - The numbers may not add up - for many organizations, the cost of securing their SIP trunks and the service levels required of their SIP trunking service provider will wipe out any potential savings.  I've sat with customers and helped them do the math - it doesn't work in many cases.  However, for others, it does work - their needs are different and the model does work, even with the costs of security and dedicated bandwidth.

#6 - SIP Trunking is just a stepping stone - In the end, peer-to-peer SIP is where we are all headed.  We don't need a middle man to deliver our email, why do we need one for real-time voice and video conversations? I can easily envision enterprises using similar techniques we use today with email to call from enterprise to enterprise - all via SIP.  In the end, SIP trunking will be a transitional technology to reach those on "the old PSTN".  Think SkypeOut. 

I'd love to hear your comments, feel free to post them.

As part III of our continuing series on building applications based on SIP, I'm hosting a live webinar next week to show how SIP fits into conferencing and collaboration solutions.

Building Applications with SIP - Conferencing / Collaboration Solutions

Thursday, November 8, 2007, 2:00pm ET 11:00am PT

Global organizations utilize conference calls as a very important business tool for collaboration. Multi-branch organizations were the first to recognize the value in voice and video conferencing services to economize on travel costs and to coordinate business activities. Other smaller organizations have also begun to recognize that having access to easy-to-use conferencing resources speeds collaboration efforts with clients and suppliers. Whether using a tradition TDM PBX, an IP-PBX or a hosted service provider, SIP is seen as a key technology going forward to help tie organizations together and dramatically reduce the costs of conferencing.

By attending this webinar you will learn how SIP can be leveraged as a key enabling technology for conferencing and collaboration applications - delivering scalable and cost effective solutions while avoiding restrictive and expensive API development.

If you'd like to participate in the webinar, click here to register.