We have reached another tipping point in the telecommunications industry. SIP trunking is the fastest growing service in our space right now and we all have an opportunity to capitalize on this trend, but we must be smart about our approach.
SIP Trunking’s growth presents a new revenue opportunity, but only if the trunk offers services above and beyond PSTN quality voice. If a service provider simply provides VoIP connectivity, they will see their revenues erode. SIP Trunking offers service providers a tremendous opportunity to deliver valuable services to enterprises by providing new communication services in demand by the enterprise market. Enterprises are becoming more educated on SIP Trunking. Practically every large enterprise has read a case study that demonstrates how an enterprise can reduce their trunks by 30% – 40%, which is obviously a negative revenue proposition for the service provider. So service providers must develop a comprehensive managed service offering to enhance and complement their SIP Trunking service..
There are several market trends, which are driving adoption of SIP Trunking by enterprises. Over the next 5-years:
· Enterprise workforces will become increasingly mobile
· Video calling will be widely adopted
· High-definition voice will be the new standard for voice communications
· PBXs will migrate to unified communications
· Enterprises are demanding comprehensive business continuity capabilities
We can easily talk about how SIP Trunking is enabling new revenue opportunities for service providers of each of these trends, but in this post we will focus specifically on the prospects with Unified Communications.
ABI Research recently issued a report “Vertical Market Opportunities in Unified Communications,” which predicts that the unified communications solutions market will reach nearly $4.2 billion in 2014 – a sharp increase from 2008 when the market reached around $302 million.
We all know that Unified Communications (UC) is the integration of varied communication options, like voice, video, email, instant messaging and conferencing, on a single IP platform. The primary benefit of UC is the ability to speed the rate of communications, keeping everyone more closely connected and improves collaboration among employees.
Another capability of UC is the greater control it provides a user over their communications options. With a single Web-based account, individual users can decide when, where and how they can be reached — and users can define these parameters without the need for IT support. (See last week’s Broadband Ignite post: VoIP’s Success in 2009 and Beyond, which focuses on the user experience…and a smart network).
SIP Trunking enables the delivery of Unified Communication capabilities now, from the “cloud, offering service providers an immediate, new revenue opportunity versus shifting that revenue opportunity to the PBX manufactures. With a “cloud-model”, enterprises no longer need to purchase additional equipment to have a full-featured UC solution.
BroadSoft has tightly integrated our BroadWorks product with business applications from Microsoft, IBM, Google, Zimbra and Counterpath in order to enable service providers to offer “UC as a Service.” When service providers host UC in the cloud, enterprises can purchase UC on an as-needed basis. This approach eliminates the need for businesses to spend valuable CAPEX dollars to purchase on premises-based systems, and creates a new revenue opportunity for service providers.
Another business model for service providers is Aastra’s Clearspan product, which integrates BroadSoft’s BroadWorks platform. Clearspan enables enterprises to collapse PSTN connectivity from multiple sites into a single centralized SIP trunk while allowing for a graceful migration of enterprise users to UC without the immediate need to replace costly PBX phones. Service providers can deliver and manage these platforms for enterprises, regardless of their communications environment, PBX, IP or a hybrid.
And the benefits of UC to an enterprise are no longer just a gut feeling. Aberdeen Group recently conducted a study that quantified the benefits of UC to an enterprise, which are:
· 35% increase in knowledge sharing
· 35% increase in workplace flexibility
· 25% improvement of an organization’s competitive performance
· 16% increased of collaboration for decision making
· 11% accelerated speed of conflict resolution
All of these factors present a perfect storm for service providers to increase revenue opportunities, versus creating a commoditized service. They are well positioned to offer advance communication services today through SIP Trunking.
We are hosting a webinar tomorrow, December 2, 2009: Capitalize on SIP Trunkings’ Momentum where we will expand on the other revenue opportunities available with a comprehensive SIP Trunking solution strategy, including:
o Unified Communications
o Fixed mobile Convergence
o Video and Telepresence
o Teleworker Solutions
o Disaster recovery
o Customized communication applications with BroadSoft Xtended
BroadSoft’s goal is to enable service providers to deliver value with SIP Trunking, not simply enable the replacement of circuit switch calls. We will all lose if that is the strategy for SIP Trunking.