Great service since 1981 | TeleDynamics distributes wholesale telecom equipment & supplies to qualified dealers and installers only

Become a Dealer Now

Great service since 1981

TeleDynamics Think Tank

SIP outlook for 2018: market growth strong to 2020

Posted by Guest Blogger on Jan 3, 2018 3:40:00 PM

New Eastern Management Group study reflects input from more than 3,500 IT managers surveyed worldwide.

by John Malone, president of The Eastern Management Group

Unified Communications (UC) icons 

As we show in Eastern Management Group's SIP forecast released last year, 2018 SIP trunk and phone growth will beat the growth in IT spending -- just as it did in 2017 -- and do so consistently through 2020.

The global regions with the fastest SIP growth are and will remain Asia Pacific and the Middle East and Africa. The growth rate in these regions is much stronger than in either the U.S. or Europe, both of which, while maturing, still exceed that projected for the whole IT market during the forecast period -- by at least 50%.

The SIP market forecast comes from Eastern Management Group's syndicated research report, SIP Global Market and Analysis and Forecast 2016-2020. The study reflects input from more than 3,500 IT managers surveyed worldwide.

Since Eastern Management Group's earlier SIP study, published in 2013, the market has experienced many changes that are driving sales of SIP trunking, VoIP phones, and related products and services.

The New Drivers behind SIP

Cost is now the big driver behind today's SIP sales. It displaces "anytime, anywhere communications" as the key catalyst.

SIP trunking easily costs 50% less than traditional networks. Furthermore, SIP trunk prices are dropping 5-7% annually. While unstable SIP quality may have hurt sales at one time, such is not the case today. This is a recent finding of a SIP customer satisfaction survey by the Eastern Management Group. In that global study, we surveyed thousands of SIP trunking customers of more than 30 service providers.

Street prices and the even lower deal prices for SIP equipment, like SIP phones, are also coming down every year, based on Eastern Management Group SIP pricing studies.

Eight More SIP Drivers

Many other strong catalysts are driving SIP sales besides cost. We'll look at eight of them.

  1. Cloud and Hosted PBX Sales -- Hundreds of service providers are now in the hosted VoIP market. The remarkable growth rate of hosted PBX has VoIP phone sales soaring. SIP trunks complement cloud applications, so the growth of cloud sales is propelling SIP trunk demand.

  2. Erosion of Proprietary Phones -- Employees and companies have lots of devices that must link to each other. Many proprietary IP phones fall short of interoperating with open standards systems. Several phone system providers now produce best-of-breed, interoperable, open standards SIP devices.

  3. Unified Communications -- Eight unified communications applications play a large role creating SIP demand. These are VoIP, unified messaging, instant messaging/chat, presence, fixed-mobile-convergence, conferencing, single reach number, and out-of-area numbers. Demand will grow for these and other UC applications through 2020. This is good for driving SIP growth.

  4. Collaboration -- Real-time collaboration is increasing. In our 2011 SIP study, Eastern Management Group found 39% of IT managers reporting that collaboration was important. Today, 62% of IT managers say that collaboration technologies are important to their businesses.  Collaboration, including video, thrives on SIP.

  5. Go-to-Market SIP Strategy -- Ever since Eastern Management Group has been developing channel strategies for SIP providers, we have witnessed evolution in SIP go-to-market strategies. This has put more SIP feet on the street, and increased the number of provider solutions.

  6. Full-Service Providers -- The intensity of SIP competition, eroding margins, and new services has created a demand for full-service SIP providers. While many of them may use another provider's network, this is often unimportant to the customer. Full-service providers offer a broad portfolio of products, services, and software of value to the SIP customer.

  7. Ecosystem Partners --These partners may not be in the SIP business per se, but they may offer products that complement those of a SIP provider, as well as offer differentiation and new revenue streams to the SIP provider. 

  8. Managed Services -- These annuities are incremental revenue and profit for the SIP provider. Managed WAN, LAN, security, and video are complementary to the SIP providers' offers.

All these drivers, and more, are pushing SIP sales to new levels. While most end users have at least some SIP elements today, it may be 10 or more years before SIP demand lessens. During this continuing evolution, the market will change. This will usher in more providers, and SIP solutions, in a perpetual motion-like effect.

For questions about the SIP study, please ask our researchers at the Eastern Management Group.

John Malone is writing on behalf of The Eastern Management Group, a communications industry market research company of which he is president. This article is an adaptation of a piece he originally published on No Jitter.

 Browse the TeleDynamics website for VoIP and UC solutions.


You may also like: 

Top take-aways from Channel Partners Evolution

The five trends that will define the evolution of VoIP

The future of telecommunications: The next 25 years



Topics: SIP, Trends

Add a Comment:

Welcome to our Think Tank

In this blog you'll read our thoughts on business telephone systems. While a lot has changed in telecom since TeleDynamics was founded in 1981, we remain as committed as ever to delivering the best customer service in the industry.

If you would like elaboration on a specific topic, please let us know in the comments section.

Happy reading and thanks for stopping by!

Receive New Articles by Email


Recent Posts

click here to download our step-by-step guide to using Wireshark for troubleshooting VoIP
Grandstream HT Gateway spec comparison table download
New Call-to-action
Download TeleDynamics' Guide to Media Gateways
Grandstream GWN7610 Product Review