VoIP vs SIP: Which Communication Solution is Right for Your Business?
The Ultimate Guide to SIP Trunking
What is SIP Trunking?
SIP stands for Session Initiated Protocol, and it is an alternative to traditional phone systems. A SIP Trunk is a single voice connection between your business and the internet. Working through your existing PBX, they specifically carry multimedia, which means it can be used for anything from a simple voice chat, to a complex multi-office conference call.
Think of a SIP trunk as the virtual version of an analog phone line. Just like an analog trunk, a SIP trunk has 24 lines. With SIP however, you only pay for the lines or channels you use.
When a business has a SIP server, it will be able to do everything the PSTN (public switched telephone network) could do. This includes determining if a line is free or in use, keeping up with the location of every line regardless of geographical destination, and directing information to the right place. It can also tell a phone system which numbers have been dialed, start and end calls, and redirect calls to services such as voicemail, or call waiting. The difference when you add SIP to the mix, is the additional abilities which work seamlessly alongside these.
With SIP services, businesses can make outgoing calls from their intranet, whether that’s local or long distance. Staff can send emails, text messages and multimedia and videos externally. Companies can use their existing system to browse the internet and complete searches, and have access to both emergency services and directory assistance.
Without SIP Trunking, a company intranet can only function within the company. Historically, most businesses chose to use PTSN hardware to supplement their PBX, but increasingly, SIP is the popular and smart choice for all sized companies.
What is the Difference Between SIP Services and VoIP?
You might have heard SIP phone service being put in the same breath as VoIP. While there are some connections here, there are many differences, too.
VoIP stands for Voice over IP and is just that, a voice call over the internet. While it’s great for at home use, (think Skype) or for limited business needs, SIP is an application layer protocol which can do so much more. The name VoIP in itself is not its own technology. It is used to describe any voice over IP service. SIP however is a signaling protocol in itself.
While VoIP sends voice messages, SIP can send any multimedia, including video, allowing conference calls and video chats throughout your business for free.
The hardware is also different here. SIP phones only need a modem to work, while VoIP handsets need to be linked to your computers. This makes it easier to use SIP with mobile devices, or more like a traditional phone line.
You can also think about SIP vs VoIP in a similar way to a Hosted vs On-premise system. While VoIP is all handled centrally, filtering, organizing and sending out information from one network, SIP is located on each user's system. This means that each user has access to more power and bandwidth, and can handle large amounts of data without the fear of the system becoming overloaded.
SIP and VoIP are not the same, but they are often used together to get businesses the most cost-effective and functional system for their needs.
What are the Benefits of Using a SIP Phone Service?
One of the main benefits to SIP services is the ability to get exactly what you pay for. Without SIP, your business needs to have enough channels available for their peak times, even when the need is actually very low. Think about a company who has the majority of their phone calls during the holiday season. With an analog line, they have to make sure they have enough options at all times to cover the influx of calls when they come. With SIP, you have on-demand scalability. Not only do you only pay for the exact number of channels you are using, but you can seamlessly scale up or down as and when the need arises. You only pay for the minutes, and the lines that you use.
SIP providers can help your company remove location-based restrictions to your communication. Suddenly your New York office and your Tokyo office are in free and simple communication whenever they choose. Both voice and data can be sent and received without having an impact on your monetary bottom line. Your geographic reach can be expanded as much as you need to perfect your global presence and inspire true collaboration between your staff.
As well as this, your SIP server can include any mobile devices you want to share calls or data with. This increases opportunities for your staff to work remotely, or take flexible working choices and still be ‘on call’ in case of emergency. Many candidates cite mobility as one of their top desires when they are looking to move companies, and SIP phone service hands it to them on a silver platter.
3. Cost Savings
The savings your business will experience can vary depending on which SIP provider you choose, and how heavy your inbound and outbound phone use is. Most businesses report savings of around 40%, although this can be as high as 60% or as low as 10%. The bottom line is, it’s cheaper than using traditional telephony.
For entrepreneurs who want to hold an important conference or conglomerates intent on holding professional development sessions for their staff members located across the globe, SIP trunking brings video, voice, and messaging data together at once. The implications are absolutely staggering, considering the savings that are made possible when it is no longer necessary to fly across the country for that next business meeting.
Other savings which you will experience are a quick ROI, as installation tends to be very cost-conscious while you begin making money back immediately on calls. You are also no longer paying for internet and phone separately.
SIP trunking also eliminates the need for "800" numbers, providing companies with another way to trim down their budget. Local numbers can be established at various points throughout the country and calls are delivered to a central call center via the Internet.
There is no capital investment to consider, as there is little to no hardware involved in a move to SIP trunking.
There is also increased productivity savings to think about. Your staff can collaborate easier, be more productive from home, and won’t spend time waiting around for answers from overseas colleagues. This saves thousands of dollars per year in lost productivity from staff. The options SIP phones give for teleworkers and flexible working conditions also raise morale, which has been proven to help your staff feel more valued and get better results.
4. Unified Communication
SIP trunks allow users to send any kind of data through the same channel. This means that collaboration and communication can be so much easier between staff, even if they are separated geographically or by time zones. Voicemail can be delivered to email, text messages can come through by voice, video chats can arrive on mobile, and you can be conference-called by your entire team, wherever in the world you are. Collaboration has never been simpler.
VoIP has got a shaky reputation when it comes to quality of calls, but this has very little basis in the truth. This might be down to some residential VoIP services resulting in a poor line due to shared networking and low bandwidth. Studies have shown that over 90% of business SIP users are happy with their audio quality. SIP is only gaining in popularity, and there is set to be almost 70% of US businesses using SIP trunking for their telephone system by the beginning of 2018.
There is much better disaster recovery when SIP trunking is involved. Automatic rerouting of calls through another data center is a common option, speak to your SIP provider to see what they offer. When it comes to an emergency on your end, such as a power outage or a system failure, SIP can be setup to create rules for any of these eventualities. Calls will be rerouted to mobile or to another office, and your clients and customers will never even know there was a problem.
What Should I Consider in Terms of SIP Phone Security?
Although SIP servers are a safe technology, there are always ways to go the extra mile to keep yourself and your business protected. As well as choosing safe passwords, including longer than standard PIN numbers for any voicemail or admin locks, speak to your SIP providers about what security extras they offer before you sign on the dotted line. Here are some of the most common.
• Network security firewalls
• PBX security extras
• IP filtering
• Restricted access options
• Outgoing call restrictions outside of opening hours
• Logging and alerts to let you view suspicious activity
• Premium rate barring
The Costs to Expect from SIP Providers
As we’ve seen above, the savings which SIP services can provide for your business are substantial. Depending on what your current business telephone setup is, it can be anywhere from 10%-60% of your current spend. However, setting up any new system does come with some expense, and it’s important that your SIP providers are transparent about this from the outset. Here are the areas which will need to be considered:
• Set up fees. These can range from $50-$250 as an initial cost. Some companies might waive setup or equipment costs, but these usually come back to you in a more expensive monthly fee.
• PBX configuration. This is a common cost in starting with SIP trunks. Obviously, existing PBX configuration differs wildly from business to business. The main element to consider is whether your existing PBX is legacy or IP-enabled. An IP-enabled PBX will not need any additional hardware or any new equipment. A Legacy PBX however will need a VoIP gateway. This will connect your phone system to the cloud. It is also known as an IAD. (Integrated Access Device.) If you need assistance with PBX configuration, our list of the best PBX providers can simplify the process.
• Calling Costs. The essential decision here is whether your business wants to choose a Metered plan, or a Channelized plan. Metered is similar to pay as you go, and businesses will pay by the minute for incoming and outgoing calls. Channelized is like having a contract. They are often called Unlimited plans, and offer a predictable standard monthly bill for a set amount of minutes. SIP providers will vary in what they offer in their ‘unlimited’ plans, from free local outbound calls, to free international calls to certain countries. The top names in SIP trunking ensure that calls are up to 30%-40% cheaper than traditional phone carriers.
• Bandwidth. Depending on how many trunks you need, and the amount of calls your business takes simultaneously, your company might need to talk to your internet provider about additional bandwidth. They will be able to establish this when they connect your PBX to the cloud. To see a ballpark idea of costs for your bandwidth, take a look at the following graphical equation.
• Number porting. Porting old numbers is a very common cost of SIP Trunking. This is typically around $15 per number, although it can be as much as $25. This is definitely worth it if you do a lot of business by phone and want your customers or clients to have easy access to you. It can also save on repeat marketing, if your existing number is on advertisements or listed in directories. You might also want to purchase new DID number. These are Direct Inward Dial numbers, and allows all your staff to have their own phones. This will cost per number, but is a one-time fee without monthly charges.
It’s easy to see why many people feel that SIP Trunking is the future of business telephony. SIP trunking is what makes it possible to merge many different forms of communication all at one time. Building on VoIP and PBX technology, SIP surpasses it to provide seamless multimedia traffic, cost savings of around 40% and unrivaled flexibility and scalability. From loved ones having a video chat with family members on the other side of the country to corporations holding an important conference a continent away, trunking connects people at a whole, new level.