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SIP and SIP Trunking Primer: What is SIP and What Business Benefits Does it Deliver

Posted by Kevin Gulley

Jun 2, 2015

Any site that regularly covers technology will invariably find itself repeating certain acronyms again and again, assuming readers know what they mean. When it comes to unified communications technology one such acronym is SIP, which stands for the Session Initiation Protocol.

SIP_Trunking_StrawsWhile many of you no doubt are fully versed on what SIP is all about, others may be new to UC technology. So I think it’s healthy to take a step back and explain what SIP is all about, why it’s important to UC and the benefits it may bring to any organization.  

To help with this little SIP 101 project I talked with Marcus Schmidt, who is Senior Director of Product Management at West IP Communications. West IP offers a UC-as-Service solution, as well as more traditional telephony and communications support services, so Schmidt is well-versed in both UC and SIP and sees first-hand the kinds of benefits SIP delivers.

The Basics: What SIP is and What it Does

Simply put, SIP is a signaling protocol designed to set up and tear down calls, or sessions, in an Internet Protocol (IP) network, Schmidt says. It sets up the session between two end points, negotiates the parameters around which the call will function – be it voice, video, instant message or what have you - “then it gets out of the way,” he says. The actual session is then carried over a different protocol, typically the Real-time Transport Protocol (RTP).

When it comes time to end the session, SIP again swings into action to handle the session teardown, or termination.

Astute readers will note that I mentioned SIP can be used to set up various types of communications, including not just voice but video and instant messaging as well as online white board sessions. That’s what makes it ideal for use in a UC environment, where multimedia calls are the norm.

The Next Step: SIP Trunking and the Benefits it Delivers

Closely related to SIP is a carrier service known as SIP trunking. “If you have an organization with several different locations, SIP trunking can be a way to unify the different locations’ communications infrastructure,” Schmidt says.

SIP trunks can replace older, time division multiplexing (TDM)-based carrier circuits that use the Primary Rate Interface (PRI) model. (See what I mean about those acronyms?) PRI lines are based on a 24-channel circuit, 23 of which are useable for user voice or data. Given that, carriers tend to sell the service in chunks – a T-1 line will give you the full 23 channels while a fractional T-1 might be four, eight or more channels.

The point is the service isn’t all that flexible, Schmidt says. Companies often wind up having to buy more capacity than they really need to meet their peak demand requirements. But with SIP trunks, you can order exactly the number of circuits that you need, so there’s no wasted capacity.

SIP trunks are also flexible in terms of how they can be used, meaning any given trunk can be used for any purpose. While some may be used to handle communications between different company sites, others can be used to handle connections to the public switched telephone network (PSTN), for calls to users who are not connected to the corporate network. Previously, companies had to dedicate a circuit to each type of traffic, further driving up costs.

“That’s one of the primary benefits,” Schmidt says. “It starts to reduce the number of circuits you need to maintain to just that one set of SIP trunks, as opposed to having to maintain different circuits for different purposes.” (For a more in-depth look at how SIP trunks save money, check out this post.)

SIP Trunking Growth Prospects and Implementation Strategies

Given all these benefits it’s not hard to understand why pundits expect the SIP market to experience rather explosive growth. Infonetics says the global SIP trunking market will grow to $8 billion in 2018, from $4.4 billion in 2014.

While that is certainly a healthy clip, the fact remains that overall SIP trunk market penetration is still rather low, with only about 20% of all companies having implemented it.  

Schmidt says the reason is two-fold. For one, companies have older, non-IP equipment – such as a TDM-based PBX - that is still in good working order and not fully depreciated. Or perhaps the internal staff just knows the older technology well and is not in a hurry to change.

The other reason is companies have contracts with their existing carriers for PRI-based services and will face penalties if they cancel early and jump to SIP trunks.

“You have to weigh the cost of terminating those contracts with the benefits of switching to SIP,” Schmidt says. “In some cases, it’s better to let the contracts go to their natural termination period and [at that time] look to SIP as an alternative.”

When companies do decide to implement SIP, they have a number of options for how to do so. “It doesn’t have to be an all or nothing proposition where you go SIP everywhere overnight,” he says.

You can decide to try it in a single location, such as a branch, or use cloud-based services in branches and have SIP trunks at headquarters. Some companies also implement SIP by application, such as for their UC suite.  Connecting a SIP trunk to the UC server would enable both internal calls to and from users employing their UC clients, as well as calls to and from outside numbers using the PSTN – all through the single SIP trunk.

Still another is to get the service “baked in” to your UCaaS solution, like the one West IP offers.  In that case, all you need is a network connection from the customer premises to the provider over which the provider delivers SIP services. West IP favors a Multi-protocol Label Switching (MPLS) connection, Schmidt says, because it supports varying quality of service (QoS) parameters. That enables users to give voice and video traffic priority over less time-sensitive applications, for example.

To learn more about all things SIP, check out the podcast with Schmidt, in which he dives in to additional topics including how SIP trunking is faring in other countries and considerations when you’ve got multiple locations that all need SIP trunks.  And don't worry, you will not be quized on all the acronyms.

Topics: Voice, collaboration, Business Case, SIP, UCaaS