Last month I discussed a rumor regarding 8×8/Packet8 providing SIP trunking services. It turns out this rumor was true as today the company released the news they will not only provide SIP trunking but a more comprehensive product they call Virtual Trunking.
Virtual Trunking performs just like SIP trunking – assuming you have an IP PBX which supports SIP. For those of you who do not, you can still take advantage of many of the benefits VoIP has to offer as 8×8 will provide equipment courtesy of Carrier Access to connect your older PBX to their IP communications network.
It is important not to confuse this service with a double-play offering which may bundle DSL or cable but instead you can consider it to be nomadic – so you can easily move the equipment to any Ethernet line meeting the quality criteria.
The service is available throughout the US except Alaska and Hawaii where the company currently does not have telephone numbers. Competition to the service comes from ILECs, Cbeyond, M5 and a number of others.
More than one 8×8 investor has asked me about whether this is a good move for 8×8 and I think it is because it allows the company to extend its customer base to larger companies meaning more opportunity to monetize its existing network. Finally, Virtual Trunking allows the company to tie in multiple services such as MobileTalk and video phones.
In addition, the company can sell Virtual Trunking to supply telephone service to a company headquarters while the branches can be supplied with the Virtual Office service.
According to 8×8 vice president of marketing and sales Huw Rees, the service can be up and running in hours with LNP taking up to seven days.
This news is great for 8×8 and I consider it to be a win/win for customers and investors. There are no revenue estimates being publicly stated for the trunking service but there is no reason why every company in the US shouldn’t take advantage of SIP trunking in the next 5-10 years. The demand is there and will only grow worldwide.
The question now is how will the company go to market with this new service? How will they differentiate and will the great branding job 8×8 has done so far translate into a faster sales cycles among larger customers? I would say there is a high level of certainty that this new direction for the company will turn into a nice new revenue stream and from here I believe it is just a matter of execution.
