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Despite the success of hosted IP telephony service providers such as Covad, SIP trunking providers such as Cbeyond, XO and Time Warner Telecom have been amassing more lines. In 2012, for instance, they are expected to sell more than double the number of lines than their hosted counterparts, according to data from Frost & Sulliivan.

The number of hosted IP telephony seats in North America is expected to grow from 697,000 in 2006 to 7.22 million in 2012, while the number of SIP trunking lines will increase from 950,000 in 2006 to about 14.52 million in 2012.

The research firm says the primary reason for this is simple: the sale for SIP trunking is easier. �All that is required is for a VoIP trunking sales engineer to pitch the 20 percent opex savings, introduce the concept of the IAD and the extra benefits in terms of value-added applications and expansion of the lifetime of the existing equipment,� Frost & Sullivan analysts report in a new white paper published in March and sponsored by Citel.

In contrast, the hosted IP PBX sale is much more difficult, as customers need to evaluate the solution and determine extra costs for writing off their existing equipment and refurbishing their infrastructure including LAN and desktop phones. �A business case needs to be made and the enterprise needs to evaluate it before making the decision of whether or not to embark on the hosted IP telephony path,� the researchers write in the white paper.

As a result, the average sales cycle for a SIP trunk is roughly two weeks while the average sales cycle for a hosted IP telephony seat tends to be four times as long.

�Channel Partners are excited about hosted IP, but the objections are detracting from the success,� says Leigh Fatzinger, vice president of marketing for Citel, which commissioned Frost & Sullivan analysts to run models on what the market would look like if the sale could be made as simple as that of SIP trunking using a product like Citel�s Portico Telephone VoIP Adapter.

The researchers estimated the forecast would rise between 42 percent and 60 percent with the addition of such gear. However, they also said the impacts would not be felt until early 2008 as the channels need to become educated about such gateways.

The Citel Portico TVA functions similarly to an IAD behind a PBX in a VoIP trunking configuration, but differs in that it offers VoIP feature pass-through and additional functionality to endpoints already installed in the enterprise. Only the actual PBX chassis is removed from the enterprise. The Portico TVA simply connects to the PBX patch panel, avoiding the LAN altogether, providing hosted IP telephony functionality over existing CAT3 wiring. Unlike hosted IP telephony, which requires a LAN assessment, power over Ethernet installation for IP phones and a variety of other labor-intensive activities, Portico can be offered with minimal disruption to an existing infrastructure, Citel says.

Fatzinger says the other advantage of the Portico approach is that it can be pitched at any time during the PBX product life cycle and need not wait until the customer is close to retiring its system.

The implementation still leaves the door open to move to a full-blown hosted solution with IP phones, but its success calls into question the need for the endpoints at all, says Fatzinger. With the existing handset and PC with Web-based controls on the desktop and mobile device, it�s become less necessary to migrate to a $300 IP phone, he argues.

Comparing Costs

Cost Per Station Hosted IP Telephony Rip & Replace Gateway With SIP Trunking
LAN Assessment $70.00 $0
IP Station $200.00 $0
LAN Switch Port With PoE $80.00 $0
Gateway $0 $100.00
Installation $52.50 $15.00
Training $15.00 $5.00
Total $417.50 $120.00

Source: Frost & Sullivan, Citel

 

PhonemagTeam

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