Wireless and VoIP editor Sarah Howland talks with David Byrd of Broadvox regarding what VARs should know about SIP trunking.
With the state of the economy, many companies are turning to technology to increase efficiency. If you want to succeed as a VAR in this economy, you must make yourself aware of what technologies you can offer that will help these companies do so. I recently spoke with David Byrd, VP of sales and marketing at Broadvox, a company that provides a domestic VoIP (voice over Internet Protocol) network, to discuss what VARs should know about SIP (session initiation protocol) trunking.
Business Solutions magazine (BSM): What is SIP trunking? David Byrd: SIP is the common signaling standard for real-time communications over an IP network. SIP is an open standard, which allows carrier voice equipment to interoperate seamlessly with CPE (customer premise equipment). The logical voice channel established between them is referred to as a SIP trunk, a virtual phone line that utilizes a broadband connection for access. Essentially, SIP is a header that is in front of the voice traffic that instructs network elements how to address or service the voice call that follows. VoIP itself has no such control mechanisms, just primarily packet delivery, so they can be out of order, delayed, or lost. SIP provides control mechanisms and the ability to tie a call back to a user or application. SIP also supports UC (unified communications) applications, because the header can contain information related to UC.
BSM: Are there any common misconceptions regarding SIP trunking? Byrd: Yes. The first is that people forget that even though it takes 64 Kb (Kilobits) in general to service a voice call, with SIP it will take 80 to 92 Kb to do so because of the overhead (header). So, if I have a T1 where I’m carrying 24 voice channels, if I convert that to a SIP trunk, I’ll only have 18 possible call sessions unless I use a 729a codec (which compresses the voice data) that can support 48 call sessions on a T1. What is the advantage, then? PRI (primary rate interface) can only support VoIP. If you switch to a T1 that is a SIP trunk, you can combine data and voice (voice traffic goes to Broadvox, data to you ISP [Internet service provider]). Another misconception is that people think you sell multiple SIP trunks to an end user. In truth, you rarely sell multiple SIP trunks. Rather, you sell concurrent call sessions or talk paths over a single SIP trunk.
BSM: What value should VARs tout to end users? Byrd: That’s really simple — initially, it’s about price. A SIP trunk today should cost on average 50% less than a traditional TDM (time division multiplexing) or POTS (plain old telephone service) line. Many companies aren’t ready to add all the bells and whistles up front, but cutting their phone bill in half with the same or higher level of quality is very appealing, especially in today’s economy.
BSM: What do VARs stand to gain by offering SIP trunking? Byrd: Revenue. It’s getting harder in this economic environment to sell new platforms. With SIP trunking, two things are possible. One, earning revenue residuals — all of us who sell SIP trunking as a carrier offer some sort of revenue residual. For instance, if you successfully sell $1,000 per month of SIP trunking, Broadvox will pay you up to $150 per month for the duration of the customer’s contract (typically one to three years). That residual can grow to become a substantial percentage of your business — and, you don’t have to bill for it, and your customer doesn’t have to know you’re receiving it. Two, if you find yourself in a situation where you can’t replace someone’s PBX because it’s either a new TDM platform or they simply don’t have the money right now, you can point out that SIP can reduce their phone bill by 50%. The only thing they may have to put in place is an IAD (integrated access device) or media gateway, at a nominal cost, to save half of what they’re paying each month. As a result, the customer is saving, and you have sold something to someone you didn’t think you could do business with.
BSM: What advice can you give VARs that offer or are thinking of offering SIP trunking? Byrd: If you are selling an IP PBX, the IP PBX and carrier need to have certified interoperability. Make sure their products have been tested to ensure they work properly together. This way, the customer can implement a certified configuration, and you won’t have to worry about whether their system will work or not. In addition, be careful in your carrier selection — this makes the difference between a successful implementation and one that’s not. Be sure to perform proper due diligence on reseller resellers — a growing community of VoIP and SIP providers that have no infrastructure in place to support their offerings, but, rather, are reselling services from ISPs. These resellers don’t have the expertise or resources to help you if or when a problem occurs. Further, they’ve done no true interoperability testing. Instead, they read about what works together and resell it without verifying or testing. Although these resellers may offer services that look attractive because they’re cheaper, the problems that can result often end up costing much more than the savings on service. Dealing with these resellers really isn’t worth the risk.