With every incumbent provider across Europe enacting their own version of an All-IP migration, the SIP Trunking market has primarily been driven by the need to replace ISDN. For many providers this has become a low margin, low volume proposition with most now looking at focusing on their cloud communications portfolio as their key product. This is a large change from 2-3 years ago when there was an equal focus on both SIP Trunking and cloud communications solutions.
Cavell had been prophesising the advent of a SIP Application market emerging where providers would start to deliver applications over SIP. This has enabled applications like mobile applications, inbound services, and call recording which the customer’s legacy PBX couldn’t deliver being enabled by SIP whilst also improving the inconsistent experiences faced by customers with multiple PBXs.
The last 18 months have seen a reinvigoration of the SIP Trunking market, mainly driven by Microsoft’s announcement of Direct Routing at Enterprise Connect last year. However, the price point for Microsoft’s Calling Plans is fairly uncompetitive compared to Direct Routing offers from Service Providers. Whereas a SIP Trunking provider based on the value of being able to offer pricing on a channel instead of a user basis can offer significant savings to enterprises. This has led to a number of SIP providers revamping their SIP propositions to target the growing base of Microsoft users who want add voice into their Teams environment but don’t want to pay for Calling Plans.
Amazon’s launch of Amazon Chime Voice Connectorearlier this year, was another disruptive move that could bring change to the SIP market. Amazon charging on a per minute basis instead of per trunk may cause disruption over the next few years. The service has been confined to the US at the moment, with prices of $2.22 for 1000 inbound minutes and $4.80 for 1000 outbound minutes. Linking this offering with the Chime collaboration and meeting service and Amazon are coming in with a low-priced solution (although currently without a full enterprise feature-list) which suits enterprises with low voice requirements that will compete strongly against anyone who is offering pricing based on a trunk with minutes added on.
To conclude, there is still a lot of value to be added to enterprises by offering SIP, whether it is to enable voice in Microsoft Teams or to start to enable an enterprise cloud migration. Service providers should also stay vigilant of the growing threat posed by large scale providers such as Amazon.
If you want more details on this, look for our SIP Trunking research paper which will be launched in September. This paper will look in more depth at how this market is developing and will go into more detail over the potential impact of the market trends outlined in this article.