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July 08, 2010

Report Analysis: VoIP and SIP Services Gradually Gaining Ground

By Mini Swamy, TMCnet Contributor


North American VoIP Access and SIP Trunking Services Markets is part of the Enterprise Communications (News - Alert) Growth Partnership Services program, and Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership.
 
Defying the downturn in the market, VoIP access and SIP trunking services is expected to build on its 40.1 percent in user base and 22.3 percent growth in revenues in 2009. This is bound to happen as enterprises are constantly in search of cost-effective alternatives to their legacy telecom circuits.
 
New analysis from Frost & Sullivan (News - Alert) North American VoIP Access and SIP Trunking Services Markets, finds that the market earned revenues of $717.3 million in 2009 and estimates this to reach $3.9 billion in 2016.
 
SIP trunking services help the convergence of voice and data access lines and is able to support a more centralized application management. Also many enterprise applications can be integrated with the telephony structure. It comes as no surprise then that end users prefer such IP-based technologies.
 
With a viable alternative emerging, businesses that have already deployed multiplexing are struggling with multiple service providers for their voice and data networks. 
 
Frost & Sullivan Program Director Elka Popova explained that most of the enterprise installed equipment is still PBX (News - Alert), hence, many of the installed services required the deployment of media gateways for protocol conversions, while only a small percentage was SIP enabled. But, as enterprises moved ahead, displacement and replacement was inevitable.
 
As a result of the transition, enterprises would be able to embrace the broader multimedia communications environment enabled by SIP. It was very clear that the only way for enterprises to benefit was to resort to a more integrated communication solution, and that would mean embracing SIP trunking services.
 
Popova believed that SIP trunking services would gain momentum as companies increased their investments in IP-based communications applications and extend their UC environments beyond the enterprise to communicate with customers and partners. ROI on SIP trunking has prompted service providers to promote the services.
 
The analysis indicated that the inevitable transition from traditional infrastructure to IP-based systems was taking place, and revenues from legacy services were declining. However, IP-based services have not really taken off in a big way.
 
However, driven by macro-economic and company-specific factors and technology evolution, maturing standards and service levels,the situation will change and carriers will start selling IP-based services and applications on a larger scale.
 
Popova also observes that the quality levels of VoiP access and trunking services although significantly improved making service providers to invest in such services, but all these improvement come with a heavy price tag (News - Alert), belying the popular perception that VoIP is inexpensive.
 
Another obstacle is that there seems to be insufficient awareness regarding SIP services, its availability and its benefits. The analysis recommends that service providers do adequate homework before offering VoIP and SIP services, as it is not suitable for all types of customers.
 
What is encouraging is the fact that businesses have an increasing tendency to consider these services, not just from the perspective of cost reduction, but as tools to achieve their long-term communication goals.
 
Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents.
 
 
 

Mini Swamy is a contributing editor for TMCnet. To read more of her articles, please visit her columnist page.

Edited by Alice Straight



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