SIP Trunking vs Hosted VoIP

Long-running debates in technology are nothing new. People have been arguing about Windows vs Mac or Android vs iOS for years – with mostly nothing to show for it. Sometimes a particular standard or format may win out in the end such as VHS triumphing over Betamax but for the most part, the competing technologies or platforms continue to exist side-by-side.

In the case of VoIP, the debate is usually hosted services versus on premise SIP trunking. Even though these are not competing technologies or formats, quite a few people insist that they are opponents or that one is better than the other. While the problem is often framed as a situation where only one business model will survive, the reality is that they continue to coexist quite well.

Hosted VoIP Services versus SIP Trunks

One of the biggest issues fueling the debate on SIP trunking vs hosted VoIP is that people fail to understand the fundamental differences and similarities. These are simply different ways of implementing voice calling technology. While there are many differences in the way VoIP services are delivered in the two business models, the end result is that enterprises are able to access and transmit voice calls over the Internet.

Benefits and Drawbacks of Hosted VoIP Services

Enterprises are able to get started with hosted services pretty quickly as it does not require any substantial capital investment. Depending on the size of the business, the only initial requirement may be to purchase some VoIP phones. Small businesses can even make do with USB headsets, softphones and mobile devices if need be.

There is no need for a business to wait for days just to set up new lines or connect a bunch of hardware. As long as the existing data network is robust and has the capacity to handle additional data requirements, businesses can get started with hosted VoIP in a matter of hours.

Hosted vendors do not require annual commitments or contracts which means that enterprises are not under pressure to sign anything. Since many operators offer a free demo or trials that may last up to 30 days, enterprises can shop around and experience a service for themselves before settling on a particular vendor.

Another big benefit of hosted VoIP is that companies do not have to purchase equipment, hire personnel for maintenance or provide for upgrades. All of this is handled by the hosted service provider, freeing employees to concentrate on other more important aspects of the business.

This is not to say that there are no drawbacks to hosted VoIP services. Some of the very benefits can also be a significant disadvantage or handicap for certain organizations. Companies that operate in highly regulated industries or that are subject to strict privacy/data security legislation may find it difficult to use hosted VoIP services. Some organizations also want to be in charge of their own upgrade schedule and will not find it easy to wait for new features to be introduced by the vendor. If a company has the in-house expertise and personnel to maintain its own phone system, it makes little sense to outsource the process since it also means giving up control and customizability.

Pros and Cons of SIP Trunking

In some ways, the implementation methods of SIP trunks is the complete opposite of hosted VoIP. Here organizations have to purchase and maintain their own equipment and hardware for providing phone services. Enterprise phone functions such as voicemail, call forwarding etc. are controlled by the IP PBX box situated on the premises itself, just like older systems. The only difference being that calls are routed through the Internet instead of copper lines.

With SIP trunks, the organization is in complete control of the equipment, upgrades, technology, features and everything else. Although it may require some investment up front, it is often worth it for many companies. New sessions can be added if access capacity is required or if demand increases, providing the flexibility of hosted services without the loss of customization. Over the long run, SIP trunking is also cheaper than hosted services especially for organizations that have pretty high call volume.

SIP Trunking vs Hosted VoIP

As stated earlier, the problem with this whole debate is that people seem to assume that only one business model can survive in the industry. However no one alternative is superior to the other end which particular option is chosen by an enterprise depends on their particular needs and requirements at the time.

Some organizations choose to begin with hosted VoIP and move on to SIP trunks when their needs change. Other companies want to retain control and hence start with SIP trunks. But over time, vendors may improve their offering to the extent that they want to switch to hosted services. Changes in external and internal business environment may also necessitate switching over from one to the other.

Which Model Will Win?

When it comes to SIP trunking vs hosted VoIP, they’re both different models that serve different needs. Even if trends point to hosted VoIP gaining ground or vice versa, it is more likely that both deployment models will continue to exist and grow within the VoIP industry. With more businesses switching over to VoIP everyday, there is no reason why only hosted services or SIP trunks should be the only option. Ultimately, both these models are here to stay unless or until a completely new technology arises to replace VoIP.