From the SIP Trunking Experts

February 27, 2014

Frost & Sullivan: SIP Trunking, VoIP Both Outclass Traditional Voice Services

By Steve Anderson Contributing SIP Trunking Report Writer

When companies start considering voice service, many start with the traditional phone line. It's done the job for decades, many figure, so why not stick to what works? While this is a sound line of logic, there are competitors in the field that offer a whole new perspective on things, and a whole new array of services that the traditional phone line can't match. New word from Frost & Sullivan, in fact, spells it out quite clearly: there are capabilities that voice over Internet protocol (VoIP) and session initiation protocol (SIP) trunking can offer that the traditional phone service just can't match.

The study from Frost & Sullivan in question, titled “North American VoIP Access and SIP Trunking Services Market,” shows that indeed, the SIP and VoIP markets are making a serious push and providing quite the value proposition indeed, as evidenced by earnings of $2.83 billion in 2013. While this number is impressive on its own, Frost & Sullivan is forecasting further expansion in the field, estimating that the market will reach $9.35 billion in 2019.

That would seem like good news on the surface, but there are some issues here, particularly related to the entrance of unified communications (UC) services into the field. The research notes that UC platforms—particularly those offered on-premises—are essentially keeping VoIP and SIP out of the running at several major firms. What's more, service providers are facing an overall lack of awareness about the SIP and VoIP alternatives in the market, and with UC going after much the same customer base, that's likely to have something of a dampening effect on the overall market.

Yet at the same time, as Michael Brandenburg, Frost & Sullivan information and communications technologies industry analyst, describes, there's still plenty of reason to pick VoIP and SIP trunking. Brandenburg explains “Businesses are transitioning from legacy private branch exchange systems to IP-based unified communications platforms, and as such, are looking to VoIP access and SIP trunking services to complement these new platforms. Likewise, VoIP and SIP trunking offer business recovery and mobile features that are simply not available on more traditional telecommunications services.” The key, as Brandenburg describes, is to offer “a wide range of value-added services to attract customers while holding the line on pricing,” or essentially, offer a better value proposition.

This is indeed the point to much of business as we know it; offering up a better value than the competition—not to mention offering up a better value than the value of holding on to cash—is the ultimate key to success in any market. While VoIP and SIP trunking is facing competition from UC, there's still quite a bit of room here in both markets, as evidenced by Frost & Sullivan's projections of this market better than tripling in overall size in just the next six years. But by like token, realizing those projections is going to take some clear effort on the parts of VoIP and SIP trunking suppliers, who will have clear competition. We have more videos on this and many other subjects at this link.

The key takeaway here is one of value. The better a value VoIP and SIP trunking can present to the potential buyer, and get the potential buyer to understand, the better off overall the picture will be for these markets that have so much to offer. There's lots of upward potential here, but only time will tell if these markets can achieve that kind of upside.

Edited by Cassandra Tucker
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