Will Cloud Ambitions Drive Big Carriers to SIP Trunks?Will Cloud Ambitions Drive Big Carriers to SIP Trunks?

If the carriers make a push on SIP Trunking, will that lock down enterprise customers who also want UC as a service?

The standard way of viewing the evolution of SIP Trunking is that, like so many technologies, enterprises will come for the cost savings and stay for the applications. That is, replacing PRIs with SIP Trunks gets you your 50-70% cost savings, but the long game is really in building an end-to-end IP infrastructure that can support UC applications from the datacenter to anywhere in the enterprise.

The Tier 1 carriers have been so afraid of that first step--the PRI cannibalization--that SIP Trunking has been slow to make it into the enterprise, and so we haven't been able to test the second proposition, that end-to-end IP will transform the enterprise. But here at the UC Summit, Todd Abbott of Sonus made the case that the applications--that is, all UC capabilities--could be what drives the carriers to suck it up and let go of the PRIs.

"Applications" has a wide variety of meanings, but the most basic communications application of all is call control, and this, with its related UC applications, is potentially moving from CPE to the cloud, at least for some chunk of the market. And Todd Abbott suggested that the way the big carriers will catch up in and eventually dominate the hosted UC market is by capturing the enterprise with SIP Trunks.

Todd noted the challenge that incumbent carriers face in monetizing the transition to SIP Trunks, given the PRI cannibalization problem, and said he believes they're searching for a way to get this monetization--and that the trunk circuits represent "an incredible incumbency" in this area.

UC cloud requires SIP Trunks, Todd maintained. You could argue that at that point, they're not SIP Trunks any more, they're just Trunks. But there will certainly be many SIP Trunks during the hybrid/transition period, which is likely to last a long time.

And it seems to me it's not so much about what kind of trunk you use to connect to what--whether it's a SIP Trunk to a PSTN cloud, or a pure-IP trunk from your IP campus to the carrier's IP-based UC service in the cloud. It's about how enterprises buy carrier services. They buy them in volume, from big carriers, and if the carriers come around to the view that they can make money selling a WAN that employs a mix of trunking technologies; and if the enterprise can get its best deal that way--then maybe Todd Abbott is onto something.

That's assuming that the big carriers believe the hosted UC business has longer and stronger legs than the PRI business. I have no idea if they do or ever will.

In the meantime, Todd Abbott was right when he talked about the best driver of SIP Trunking today being a competitive marketplace, where the Tier 2 providers can give the big guys a run for their money.

"If you don't have a vibrant competitive market, it's hard for SIP Trunking to evolve," he said.

Follow Eric Krapf and No Jitter on Twitter and Google+!
@nojitter
Eric Krapf on Google+