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5 Reasons SIP Trunking is Alive and Well

A funny thing happened on the way to cloud communications and contact centers – SIP trunking adoption grew.
Nemertes’ recently published “Workplace Collaboration: 2019-20 Research Study” shows that more than 18% of the 645 participating companies are using SIP trunking, while an additional 34% plan to deploy it in the next two years. Adoption is highest in North America with 58% of PSTN trunks converted to SIP, opposed to 37% in APAC and 21% in EMEA. More startling, organizations are continuing to leverage SIP trunking even when adopting UCaaS. For example, nearly 89% of those using Microsoft Teams for calling are bringing their own SIP trunking services using Microsoft Direct Routing rather than buying PSTN access through Microsoft’s Calling Plan.
It seems counter-intuitive that SIP trunking adoption would increase given many UCaaS offerings include local and long-distance calling plans. If PSTN access is part of a UCaaS license, why would organizations still need to purchase SIP trunks? Yet most, UCaaS providers allow customers to bring their SIP trunks with them as they migrate to the cloud. Our research shows several reasons for the continued and growing adoption of SIP trunking:
  1. Cost – Organizations, especially large multi-nationals, are likely to find that PSTN access services that they purchase on their own, or through a managed services provider, offer superior economics. Most large organizations (greater than 2,500 employees) use self-managed SIP trunking services, either from a single provider or from a variety of best-in-region providers, coupled with policy-based routing to minimize toll charges. For a small company operating solely within the U.S., bundled PSTN minutes with a UCaaS service makes financial sense; for large multi-nationals, the economics often point to self-management as delivering superior TCO
  2. Control – Using a UCaaS or CCaaS provider’s PSTN access services means transferring your phone numbers to their domain. Again, this approach might attract small companies, but for large ones, with tens of thousands of phone numbers, the complexity of transferring phone numbers and avoiding disruption/downtime may make it more advantageous to maintain phone number control.
  3. Flexibility – Moving phone numbers to a UCaaS or CCaaS provider not only means loss of control of those numbers, but it also means that customers are locked into those service providers. After going through the pain of transferring numbers to a cloud provider, it may be exceedingly difficult to transfer those numbers to a different provider. Alternatively, maintaining one’s own SIP trunks and control of PSTN numbers means that not only can organizations easily move from one cloud provider to another, but that they also have the flexibility to utilize multiple cloud providers. For example, a large organization might leverage Microsoft Teams or Cisco Webex Calling for its business phone services and want to use a different provider for its contact center. Or, they may want to pilot services from a few different cloud providers before making a final purchase decision. Bring-your-own-SIP models provide for the flexibility to avoid single-vendor lock-in.
  4. Contracts – Larger organizations may have long-term contracts with SIP trunking providers that don’t allow for easy breakage. Again, it may be more costly to get out of existing three-or-more year SIP service contracts to migrate PSTN access to the cloud provider.
  5. Features – Many SIP trunking providers offer additional features not available from UCaaS providers. These may include APIs for phone number provisioning, global emergency services (911, 112) call routing, SMS/MMS in-bound and out-bound services, virtual phone numbers to establish local presence in remote markets, and more.
Bottom Line
SIP trunking services continue to grow and thrive, even as the march to cloud communications and contact center accelerates. IT leaders should carefully consider whether it makes sense to maintain their SIP trunking services, and with them, control over their phone numbers and the flexibility to avoid service lock-in and obtain access to advanced features potentially not available from their UCaaS partners.