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Zeus Kerravala
Zeus Kerravala is the founder and principal analyst with ZK Research. Kerravala provides a mix of tactical advice to help his...
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Zeus Kerravala | March 29, 2012 |

 
   

Day 3 at Enterprise Connect: SIP Trunking is Long on Promise and Short on Results

Day 3 at Enterprise Connect: SIP Trunking is Long on Promise and Short on Results SIP trunking will have its day. The network operators that can shed legacy thinking fastest are the ones most likely to win.

SIP trunking will have its day. The network operators that can shed legacy thinking fastest are the ones most likely to win.

During the morning of day 3 at Enterprise Connect, I co-moderated a SIP trunking panel with Eric Krapf. The panelists were Marc Lindsey, a partner with Levine, Blaszak, Block & Boothby, Jan Linden from Google, Rupesh Chokshi from AT&T, Joe Martin from Sprint and Lisa Pierce from Gartner. I liked the mix of the panel because it was a nice mix of telcos and other individuals.

The panel reminded me that, despite the hype and promise, the industry has a long way to go before SIP trunking reaches any kind of significant adoption. Depending on whose research you look at, the penetration rate of SIP trunking in the US is somewhere between 5% and 30% of all trunk lines. My personal feeling is that it’s on the lower end of this, right around 5% in the US, Europe being about half of that and then it's almost non existent in Asia right now.

Part of the challenge here is that I don't believe the SIP trunking providers really push the full value of the service. Instead they use it as a competitive weapon by going to a competing operator's customer and then offering a lower cost solution. It's a voice service used to replace an older type of voice service at a lower cost. Whoopee. Now, when I asked the panelists the question of what else you could do with SIP trunking other than make voice cheaper, both Sprint and AT&T talked about using SIP trunks to extend voice to the cloud and to mobile networks. That's fine but it's still voice centric. I know the Sprint Complete Collaboration solution is actually designed to have mobile be a standard part of a service which uses SIP trunking but, from what I've seen in the field, do not believe that AT&T is selling the services that way.

I've been to many, many customer summits of large and small SIP trunking providers and I can sum up the value proposition that's used to sell the service in three bullets: Cost savings, costs savings and cost savings. It's the low hanging fruit, particularly in a tough macro economy but does nothing to articulate the long-term value of what SIP trunking can provide.

Gartner's Lisa Pierce provided the best answer as to why customers should care about SIP trunking, as she called it the "umbilical cord" that can connect any user to the world of unified communications and multi media based services. Not to pat another analyst on the back, but her answer was certainly something I'd prefer to see the SIP trunking providers use instead of cost savings. If we want to truly move into a world where users are free to use any UC application and easily switch between them no matter what device they are on or what network the user is on, SIP trunking needs to be a key part of this.

One question did come in from the audience where they asked something to the effect of, "If the original purpose of SIP trunking was to deliver multimedia communications, when will the service providers roll out SIP trunking services that do more than carry voice traffic?" Joe from Sprint was the first to answer and he said both jokingly and seriously that Sprint would do that when they had enough voice traffic to justify the increase in investment. Rupesh of AT&T had roughly the same answer. I understand why they answered it this way but I do think that all of the SIP trunking providers would have a better chance selling SIP trunking with the additional features. This way the value proposition expands past doing things cheaper to doing things you couldn't do before.

Additionally, I think the SIP trunking providers have over-complicated the sale. I was chatting with a network manager after the event and he told me that when he asked about the availability of SIP Trunking services he was given so many options he had no idea what to buy. Burstable services, per minute charges, flat rate options, etc. There are many ways of delivering a SIP trunk but few best practices on which ones work best in which environment and what type provides the best experience. Too many options can confuse buyers so the operators should have some kind of recommendation to the customer instead of offering up a Chinese menu of SIP trunking options.

Now this whole discussion is a moot point if Google and the other over the top providers win out and corporate voice services shifts to that kind of model. While it might make some sense for small companies to take a look at this model, I think that shift is unlikely to happen any time soon. So, barring the unlikely, SIP trunking will have its day. The network operators that can shed legacy thinking fastest are the ones most likely to win.





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