Saving Money with SIP

By Samantha Fairchild
October 21, 2016

The Postal Service vs. Email

I am always fascinated with the cause and effect of happenings around me. One good example is the creation and wide adoption of using email. Few argue the benefits of using email, as it is much faster than sending something with a stamp or by carrier. Then we look at the effect of the wide adoption of email and see that the Postal Service is now financially hemorrhaging because of it. What was once a coveted job at the Postal Service is now a minefield of uncertainty for employees working there. This is a perfect example of technology directly affecting an arguably less effective means of communicating with someone. I will be the first to admit that I hope that the Postal Service is able to trim the fat, and cut waste so that they can sustain themselves. There are instances where an email cannot do what a parcel clearly can.

Ma Bell vs. VoIP

On that note I move on the once highly monopolized world of telecommunications. Forgive the term but “back in the day” there was usually only one provider to get your phone service through. Due to the basic and rudimentary structure of the national phone system back then, you only had one path from point A to point B. As fiber optics came into play and less copper wiring was being used for longer distances, cost to maintain dropped but unfortunately the consumer never saw those savings.

In the early days of the internet and I use this term loosely but “High Speed” internet came T1 circuits. These 1.5 Meg connections were highly stable and very expensive. They were the doorway to PRI lines which were able to bring in multiple lines and provide a means of tracking uptime and line health for businesses. Primary Rate Interface or PRI lines were primarily only advantageous to businesses that needed more than 2 or 3 lines since the T1 circuit was close to $1,000 or more a month. On top of this, the PRI lines still required separate billable long distance coverage for interstate and intrastate call outside of the local calling area. PBX phone manufacturers loved this as they were able to jump on the bandwagon too. PBX systems began being manufactured with software that could be configured for least cost routing and toll saving features. This made the expensive PBX systems an integral part of the business users telecom setup as the consumer was looking for ways to save money.

Now we fast forward to the advent of Session Initiation Protocol or SIP in 1996. It took 3 years for it to get standardized as RFC 2543. It was first adopted for use by cellular networks that were IP based for streaming multimedia services. The big turning point was in 2002 when the standardization was revised to RFC 3261. At this point the private sector began to use it in early SIP communications for voice transmission. That is when the world was introduced to VoIP on a wide scale.

As the years passed, more specific hardware was released that expanded the benefits of VoIP communications. It was also beneficial that broadband stayed on track with continued bandwidth increases which was helpful for SIP. Yealink began manufacturing SIP business phones in 2009 to fill the demand for the hardware communications need. Polycom also began manufacturing various SIP handsets for business enterprise. Polycom and Yealink are now the top two manufacturers of SIP telephones nationwide and worldwide.
The next logical transition was to create hosted PBX using SIP to connect everything together. Everyone was in agreement that this was beneficial as hosted PBX could be upgraded with features much easier since it is essentially software. This proved much cheaper than changing out hardware on a physical PBX to gain new feature support.

The Moral of the Story

This brings me back to my story of the Postal Service. Just like email disrupted the Postal Service, SIP communications has disrupted the AT&T of the world. Likewise, PBX manufacturers and telecom companies providing onsite maintenance for these On Premise PBX systems are beginning to feel the pain of SIP communications and Hosted PBX.

I guess the next question is why these entities are feeling the pain from SIP communications. The answer is simple…Price. Broadband internet disrupted the monopoly of using the “phone company” lines and allowed for more choices by the consumer. Since SIP or VoIP as it is sometimes referred to is more efficient, it costs the consumer less. Providers like Proclaim VoIP are able to offer communication offerings with unlimited long distance, included support, and new features without significant investment.

It seems to me that saving your business money at the end of the day is more important than making the phone company richer. The “Ma Bell” of the US is worth billions of dollars and their shareholders love the huge markups. That is not why we do this everyday, to make them richer. Save your money and consider switching your phone service to VoIP. You will feel good that you made a very smart financial decision for your business.

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