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SIP Trunking: Bullish Calculators Yet Bearish Adoption
Google "SIP Trunking Calculator" and you will get 10+ different ones. In reviewing these calculators, they have some things in common, and some differences in how they calculate savings. They all prove significant savings, yet full deployments of SIP trunking are still lagging. Why is this?
Commonalities of Calculators
* Aggregation of Trunks & Access--Organizations with traditional T1/PRI TDM voice have 40-50% more trunks than they need. Using Ethernet access and consolidating trunks allows for a dramatic reduction in number of trunks required and the associated cost of delivering them.
* Feature Charges--Paying for the D channel on a PRI goes away along with other feature costs going down or away.
* Support Costs--Move/Add/Delete/Change requests are all done primarily in software.
Differences of Calculators
* Taxes--USF and other fees/taxes are currently less with SIP trunks; not all calculators account for this, but this can add up to 5-10% of the savings
* Flexibility--The ability to add and subtract capacity quickly to meet seasonal demand
* Intra-State Long Distance--SIP Trunks let you eliminate the need to pay 3x more than inter-state calling, for calling LD within a state but out of LATA.
* Flat Rate Billing--Not having to pay for a detailed bill, just peak concurrent calls and average monthly usage.
A sample of SIP Trunking Calculators includes:
* Broadvox--Very simple; just input number of employees and it calculates the savings.
* Level 3--Nice GUI interface that a Telecom Manager could use to get a quick number.
* XO--A YouTube video that explains their calculator
* Acme Packet--A sophisticated calculator along with a 22-page whitepaper explaining the details, for a Telecom manager that wants to get into the details of how SIP trunks really save money. (This was put together by yours truly.)
So why with all these calculators showing significant savings, are companies slow to fully migrate to SIP trunking? Roughly 70% of organizations have SIP trunks in their environment, but less than 5% have completed the migration. This is my speculation:
* Robust IP Network--To optimize SIP trunking benefits, centralizing all telecommunications into the data center is a large project that requires a very robust IP network. A lot of organizations do not trust their IP WAN to be reliable enough and/or provide the performance required for real-time media. The cost to upgrade the WAN is significant and impacts the business case. Ethernet access is driving down WAN costs too.
* Risk Averse--Having all applications in the data center means if the network goes down, then one can not make a call. The reality is that centralized environments provide greater uptime across the entire enterprise based on those who have made the change, but this is a big leap of faith. The incumbent carrier and PBX provider are not excited about moving to SIP trunking, for their revenue will go down. They urge caution, lots of testing, while spreading fear, uncertainty, and doubt.
* SIP Trunking Expertise--Finding people who know IP networking and telecom remains a tight market. Getting these people to understand all the subtleties of SIP trunking and session border controllers (SBCs) takes additional training and hands on experience.
* Sponsor--Figuring out who will pay for it and lead the change. Most IT organizations charge back their IT network and telecom costs. In a lot of organizations, IT is just an order taker, and all new projects are funded by the various business units. A single business unit may not get the entire benefit of SIP trunking as the entire enterprise would, and who pays for upgrading the network to support real-time communication is not always clear.
These same issues plagued IP-PBX deployments. In a lot of cases, these issues were not resolved, which led companies to centralize the management but have local survivability, along with continuing to use site T1/PRI trunks. There are large IP-PBX deployments within organizations that still have some sites running on traditional TDM PBXs because there is not agreement on who will fund the change.
One interesting trend is that some of the companies that are the most behind may end up surpassing their IP-PBX peers in providing an end-to-end VoIP/SIP solution. I have seen companies with very old TDM infrastructures go to a centralized model (cloud based or private) and an end-to-end VoIP/SIP solution quickly--while companies who put in IP-PBXs over the past 5 years, but kept their trunking T1/PRI and site based, are lagging. The revolution versus evolution issue.
Our VMware brethren are also facing a similar experience in the adoption of server and endpoint virtualization, so we are not alone. Here is a good VMware calculator, but this is another story.
One Fortune 100 company that I did some consulting for had me build the business case for SIP trunking. There was significant savings and new functionality shown for going with SIP trunking. But the incumbent carrier got word, met with the business folks, and told them a horror story of a company who went to SIP trunking and then had a 2 day outage. This was 3 years ago, and this company is still piloting SIP trunking.
Most IT shops are risk averse. Using SIP trunking calculators to prove potential savings is just the first step towards a successful adoption and rollout. Organizations that have a robust IP network can save 50-60% with SIP trunking, which is what most of the calculators say. Those organizations that do not have a robust IP network can save 20-30%, with the difference going to upgrading the WAN.