Why Most Buyers Can Ignore the SIP vs. VoIP Question

SIP or VoIP is a common question, but it will not help you in the purchasing process.

Voice over Internet Protocol (VoIP) is a general term for technology that facilitates voice conversations over the Internet. It works by converting audio signals into data packets, and then converting those packets back to audio when they are received at the other end.

On the other hand, SIP (Session Initiation Protocol) is one of several protocols used in VoIP systems.

Each protocol has its own rules and standards – MGCP, H.323, IAX and RTSP are examples of other protocols that VoIP systems can use. SIP is just one way, not the only way.

You don’t really have to choose between the two. In fact, many internet connections use both.

If SIP or VoIP is not the right question, what is the right question?

SIP, SIP trunking, SIP trunking services, IP, VoIP and VoIP services are often used interchangeably, even though they are completely different things. This causes a lot of confusion.

The real question you should ask yourself is whether to use SIP Trunking or VoIP services.

For clarity, here is what these terms actually mean:

VoIP: Technology that enables calls to be made over the Internet.
VoIP services: Providers that offer everything you need to use VoIP, such as Skype, Zoom, Google Voice, and Nextiva.
SIP: A protocol that enables disparate technologies, networks, and systems to work together to communicate in real time, including telephone calls, video chats, and instant messaging.
SIP link: A method of delivering voice services over the Internet. It allows companies to connect their existing telephone systems (such as older PBXs) to the Internet, making them cheaper and easier to scale without having to replace the entire system. On the other hand, switching to VoIP services typically replaces an existing system.
SIP Connectivity Services: Providers like Nextiva, Ooma, and RingCentral provide everything you need to use a SIP trunk.

The decision between SIP Trunking and VoIP services determines the further course of action and whether a complete replacement of the current system will be necessary.

I’ve already mentioned how the technologies behind these services work, but there’s a lot more to it.

How SIP works

When you make a call, send a message, or start a video call using SIP, the system sends a request to the server to initiate the communication. That’s all SIP does—it doesn’t transmit call data or manage anything beyond starting and ending the communication.

Traditional landline telephone systems use copper wires that physically connect to the telephone company.

When you switch to SIP, the physical cables are replaced by a digital connection to the public switched telephone network (PSTN).

This new connection connects your old system to a virtual VoIP system, allowing you to communicate over the Internet.

For this to work, you need a Session Border Controller (SBC) to manage the flow of data between the old system and the new virtual system. You will also need a SIP Trunking provider to configure the SIP server and create a connection to the existing system.

When you make a call, SIP establishes the connection and transfers it to the SIP trunk.

The link then routes the call from the virtual telephone system to the destination, allowing the call to begin.

For incoming calls, it usually looks like this:

The incoming call will be answered via your virtual system.
The call is routed to your legacy telephone system.
The data is then sent to your computer, mobile device or IP-enabled phone (depending on your configuration).
If no one answers, the call will go through according to your call routing rules. This could mean going to voicemail or calling a colleague.

This flexibility allows you and your team to receive calls on multiple devices, something that would not be possible without a SIP connection.

SIP trunking is typically much cheaper than traditional systems because it doesn’t require physical infrastructure. In addition, long distance calls cost the same as local calls, which can save you even more.

However, SIP Trunk technology is only useful if you already have a legacy system and want to retain the infrastructure you have invested in.

How VoIP works

If you don’t have an existing analog system or want to get rid of the one you already have, the best solution is to switch completely to VoIP services.

VoIP technology works by converting voice into digital signals, which are compressed and sent over the internet as data packets. These packets travel over IP networks to their destination.

If you call a landline number, VoIP technology converts data packets into standard signals so the other person can hear you.

When making an outgoing call, it usually looks like this:

Your phone connects to your VoIP service provider.
They act as a switchboard to route your connection. They also ensure that your data packets are compressed and transmitted correctly.
These packets are divided into smaller segments and tagged with important information such as the name of the caller and the person receiving the call.
They then pass through VoIP codecs that further compress the data. This helps preserve voice quality while reducing the size of data packets, allowing them to travel faster with minimal delay or lag on the other end.
At their destination, they are reassembled and converted back into sound waves using a digital-to-analog converter (DAC).

Similar to SIP trunking, users can make and receive calls using a variety of devices, including computers, smartphones, or physical phones. Some physical phones are IP-enabled, meaning they are connected to the Internet—these work seamlessly with VoIP systems.

Analog phones require an adapter to connect to the internet. Once the adapter is in place, the process is seamless.

VoIP Services vs. SIP Trunking Services

VoIP services are very different from SIP trunking services. Furthermore, no two providers are the same – everything from features and pricing to implementation times and monthly calling limits vary significantly between them.

This section is to help you make sense of it all.

What do SIP Trunking services look like?

Pricing is one of the main differences between SIP Trunking and VoIP services.

SIP trunking is typically priced per channel (also called a trunk). Each channel represents one call. If you have a team of 100 people but only need to handle 10 simultaneous calls, you’ll need 10 channels. The price per channel typically ranges from $15 to $25 per month.

VoIP services and traditional systems, on the other hand, charge per-user fees, with costs ranging from $30 to $60 per month per user.

Instead of paying (at least) $3,000 per month for 100 users, SIP trunking would cost $150 to $250 per month for 10 channels. This turns out to be more cost-effective if you don’t need each user to have their own line.

When it comes to implementation, it can take from a few hours to a few days, depending on the size of the company and the complexity of the existing system.

Typically, most of the tasks, including configuring the SBC and connecting the system to the VoIP network, are performed by your provider.

Some providers may charge a one-time setup fee ranging from $200 to $500.

When it comes to features, they vary greatly by provider. Basic features typically include caller ID, voicemail, and call forwarding. Some may offer more advanced features like video conferencing, CRM integration, auto attendants, IVR, call recording, instant messaging, and more. Many providers allow you to add these extra features for an additional fee if you need them.

What do VoIP services look like?

Unlike SIP trunking, VoIP services are priced per user. You’ll typically pay between $30 and $60 per user, depending on the features you need. While it’s more expensive than SIP trunking, you get a much more capable system with customization, automation, and internal collaboration features.

They offer all the same features as SIP Trunking services (and more), plus they are completely cloud-based and work just like any other tool you use.

You can manage the system from your computer, users get their own logins, and you don’t really need any hardware (unless you want to use landlines). Your provider takes care of security, maintenance, and software updates, so you don’t need any IT resources either.

VoIP implementation is equally easy, taking just a few hours to a day in most cases. Many vendors handle implementation remotely, making it easier for remote teams.

There are regular business communications and contact center plans that require advanced call management tools for high-volume calls. Some of these advanced capabilities include:

Live call monitoring.
Speech analysis.
Queue management.
Workforce optimization.
Performance management.

Scalability and implementation are the same for both types of services – the main differences are comprehensiveness, flexibility, and price.

SIP or VoIP: What to choose?

If you have a legacy phone system and want to slowly migrate to the cloud, or have long-term contracts to fulfill, SIP Trunking services are a great solution.

However, there is no point in buying a traditional telephone system to use SIP Trunking services. First, it will involve huge initial costs to implement the necessary infrastructure. Second, it will take a lot of time.

VoIP services are the easiest, fastest, and most cost-effective for businesses that do not yet have a telephone system.