The SIP trunking industry is growing at a rapid 18.6 percent cumulative annual growth rate.
According to Transparency Market Research, this market is expected to reach $20.7 billion is 2024.
Session Initiation Protocol (SIP) and VoIP are the technologies used in SIP trunking. The demand for VoIP services has continued to rise. It equaled over $83 billion as of 2015 and is expected to surpass $140 billion in 2021.
It’s clear that the future is looking up for the SIP solutions market. But just how bright is that future?
Read on to find out.
Businesses Are Adopting SIP Trunking
In 2017, an expected 67 percent of businesses in the USA will start using SIP trunking, up from its 45 percent levels in 2016. That’s a 22 percent leap in just one year.
In 2015, 67 percent of the SIP solutions market was led by on-premise SIP trunking services. However, hosted SIP trunking services will grow 25.3 percent CAGR from 2016 through 2024 to take the lead. This accounts for 51 percent of the market.
Small businesses slash costs on international calls by nearly 90 percent and cut 40 percent off local calls by adopting VoIP.
PC World reported that businesses with 30 phone users saved as much as $1,200 monthly after switching to VoIP. Cost saving is a crucial driver of market growth.
Business owners find it hard to use traditional phone lines for conference calls or meetings. SIP services allow companies hold virtual sessions in real time. Everyone can participate, provided you have adequate facilities to accommodate everyone.
Fortunately, VoIP technology is almost always undergoing some improvements. Compressed voice packets have helped upgrade call and connection quality.
Businesses that adopt VoIP eliminate the initial cost of setting up the traditional phone lines. Businesses can determine what services suit them best by using review sites like Virtual PBX Reviews.
Based on end-users, IT and telecom sector generates the most revenue. This is expected to continue leading through 2024. The fastest growths will be in the healthcare and retail segments as the adoption rate of SIP trunking services increase.
Service Quality and Scalability
A key growth driver of the SIP trunk market is the mass migration of telecom companies to Internet Protocol (IP)-based networks.
For example, in December 2014, Slovak Telekom, a subsidiary of Deutsche Telekom Group, finished migrating its entire customer base to their IP network.
SIP trunks have lots of benefits. One of the advantages of SIP solutions is that companies can scale their businesses fast by adding more channels to existing trunks.
Every year, SIP trunk prices fall by five to seven percent. In the past, SIP suffered poor quality, but technological advancement has overtaken that. The Eastern Management Group conducted a customer satisfaction survey from 30 service providers around the world to confirm this point.
Security was once a key drawback of SIP trunking services. But that’s ancient history now.
Service providers now provide two encryption standards: Secure Real-Time Transport Protocol (SRTP) and Transport Layer Security (TLS).
Names and telephone numbers get their protection from TLS and SRTP secures audio and video data. The two protocols must be functioning at the same time for maximum security against hackers.
There’s more you can do for greater protection. Replace firewalls and routers with Enterprise Session Border Controllers. Benefits of doing so include:
- Improving your security level
- Gives you superior network quality
- Prioritizes traffic to support high data volume for your SIP trunks
Interesting Global Market Trends
As of 2015, North America was the market leader in SIP solutions.
Based on projections, Asia Pacific would rank as the fastest growing market by 2024. In fact, every month customers of telecom companies drop 700,000 landlines.
InformationWeek says that 70 percent of businesses have either deployed or plan to implement unified communications. The market for unified communications by 2018 is projected to be worth $88 billion. The Eastern Management Group provided other trends drawn from their survey.
End of Proprietary Phones
A large number of phone system providers are making and availing interoperable SIP devices for open source use.
Proprietary phone systems usually fail to interoperate with open systems. Interoperating is essential because companies have tools that must connect with each other seamlessly.
Increasing Need to Collaborate
Back in 2011, only 39 percent of IT managers felt that collaboration was essential.
Six years later, 62 percent of IT managers agree that collaboration tools will improve their business performance in 2018.
SIP customers benefit from a range of products and services offered by full-service providers. These are necessitated by dwindling margins, growing competition, and new services.
Customers are usually not concerned if their service providers use another provider’s network.
Managed services such as LAN, security, WAN, and video are complementary to the core offerings of SIP providers.
Hosted PBX and Cloud Sales
VoIP phone sales have grown in response to the emergence of hundreds of hosted VoIP service providers.
Cloud applications and SIP trunks are complementary, so demand for SIP is increasing with growth in cloud sales.
Eight unified communication applications drive SIP demand. These are:
- Unified messaging
- Out-of-area numbers
- Instant messaging or chat
- Single reach number
The market for these devices and other UC applications is projected to grow through 2020. Consequently, the demand for SIP trunking will increase.
Evolving Go-to-Market SIP Strategy
SIP provider services have grown due to an evolution of their go-to-market strategies.
Eastern Management Group noticed this trend from their extensive channel strategies development for SIP providers.
Ecosystem partners are businesses that offer complementary products to SIP providers.
These partners also provide alternative revenue sources and competitive advantages to SIP solutions. Ecosystem partners may not be direct SIP provers.
To Wrap It Up
SIP solutions are gaining popularity with businesses for their cost savings and other benefits.
A growing number of businesses are adopting SIP solutions for their communication needs. This trend is predicted to continue for the foreseeable future.
Trends like ecosystem partners, evolving go-to-market strategies, hosted PBX and cloud services, and the leap in SIP adoption rates strengthens SIP adoption across the globe.
Visit SIP trunk to see how SIP trunking can benefit you today.