SIP Trunking: What Every Business Owner Needs to Know

Business.com / Business Solutions / Last Modified: February 22, 2017

If it's not a drink or a tree, what exactly is SIP trunking and why does it matter for your business? More than you think, and here's why.

Tired of phone lines and traditional telecommunications providers? You're not alone. Big businesses and small startups alike are turning to SIP trunking as a way to empower users and make communications simple. But what exactly is SIP — and should your company take a drink?

Tech Target defines Session Imitation Protocol (SIP) trunking as “the use of voice over IP (VoIP) to facilitate the connection of a private branch exchange (PBX) to the Internet.” That's a mouthful.

Bottom line: it's like virtualizing your telephony services while still maintaining the call clarity, speed and security. And it's rapidly gaining ground as businesses opt for VoIP-based alternatives over traditional integrated digital services networks (IDSNs).

Related Article: 5 Reasons the VoIP Market Will Reach $88 Billion by 2018

In Britain, for example, there were one million SIP trunks active through 2013, and by 2018, it's predicted this number will more than triple to 3.3 million. Despite its growing popularity, many business owners aren't sure how it can benefit their bottom line and what trends are on the horizon for this technology. Here's what you need to know:

Small SIPs: The Basics

Conventional telephone systems also run using a “trunk,” which is any line or link that can carry multiple signals simultaneously. Unlike a traditional telephone trunk, SIP-enabled systems allow direct connection with an Internet telephony service provider (ITSP).

This makes it possible to extend VoIP systems beyond the confines of company walls but without the need for an IP-based public switched telephone network (PSTN) gateway through the firewall. In other words, you can skip the traditional phone provider and still get all the same benefits.

Big Gulps: Key Benefits

SIP trunks also come with a number of built-in benefits. First is the ability of SIP technology to combine data, voice and video content into a single line, meaning you don't require separate media channels for each type. As noted by Microsoft, trunks can carry instant messages, multimedia conferences and user information with equal facility. The result? Simplified communications and reduced operational complexity, leading to lower costs.

It's also important to note that SIP trunks perform all the functions of standard PSTN offerings such as making and receiving local and long-distance calls and accessing directory assistance. These networks also support email exchanges and Internet browsing along with the ability to integrate both mobile and traditional phones.

Since the service isn't based on physical circuit-switching, adding or removing a line is easy and requires no downtime. The big takeaway here? Everything is simplified, streamlined and easy-to-use, no matter how many lines you're connecting.

Related Article: Kiss Your VoIP Troubles Away - 4 Problem Solving Tips for VoIP Usage

New Flavors?

While it's possible to realize cost savings and improve operational efficiency with basic SIP trunking, there are several trends for business owners to watch as this technology matures.

First is the use of cloud-based SIP networks. Instead of storing all telephony data on company-owned servers, cloud-based SIP trunks offload this responsibility to providers. The result is further cost reduction and increased data security owing to the redundant nature of the cloud.

What's more, many of these networks are HIPAA and SOC2 compliant, meaning even companies dealing with health care or legal information can keep their data secure. And in the event of local disaster, using a cloud-based SIP means your communication service stays up and running.

Enhanced PBX options are also trending, thanks to SIP trunking. As noted by No Jitter, the PBX and IP PBX markets are changing significantly, with some companies choosing to carve up these networks into smaller service subsets.

Cloud-enabled SIP trunks, however, permit the creation of virtual PBX networks ideal for smaller businesses that can't afford the real estate or manpower costs of “traditional” PBX. Everything from interactive voice response to advanced call-back features is available, giving all the benefits of an enterprise-level system without the cost.

What do business owners need to know about SIP trunking? That it's now possible to toss your old PBX or telecommunications provider and grab a tall glass of improved communication, reduced costs and emerging telephony trends.

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