April 2015, IDC #IDCTS01X

Technology Spotlight

SIP Trunking for Contact Centers: Think Global, Act Local

Sponsored by: Voxbone

Melissa Fremeijer

April 2015

In the ever increasing world of digitalization and globalization of business, service and experience

are a growing concern for companies. Contact center and customer care services are poised to

undergo a significant transformation driven by consumer requirements for more multichannel and

omni-channel interaction support and consistency. In addition, contact center management are

aware that localized customer support is an essential tool in order to improve customer experience.

This paper discusses the shift in contact center technology platforms to an as-a-service model in

the cloud or hosted deployments as this enables enterprises to benefit from the latest technology

to meet today's customer service needs without the burden of having to invest in, maintain, or

support these complex technology platforms in-house. SIP trunking is an important transport

technology service that helps contact centers improve flexibility and provide consolidation while

enabling localized support and lower costs.

This paper also explores Voxbone's role in the cloud contact center services ecosystem and how

its IP communications services and SIP trunking services enable global enterprise contact centers

to optimize customer support and experience with a local touch.

MARKET TRENDS

Customer Service Evolution

As markets become more and more competitive, companies are seeking ways to differentiate —

and one of these is through customer care. Most businesses realize that customer experience is

one of the keys to attaining customer loyalty and advocacy, which can have a significant impact on

financial performance. Therefore contact centers have historically been at the forefront of

enterprise communication and collaboration innovation. The significant technology changes we

have seen in recent years have also initiated a transformation in the contact center industry. Digital

communications have dramatically changed the way customers interact with companies —

customers are now using more channels to communicate and have more influence than ever

before.

In that ever increasing world of digitalization and globalization of business, service and experience

are a growing concern for companies. Customers expect consistent support and cross-channel

knowledge of earlier interactions, irrespective of when they communicated, how they

communicated, or even from where they chose to do so. This means that contact centers will have

to be much more agile and more innovative than ever before. The requirement for multichannel

©2015 IDC #IDCTS01X 2

and omni-channel interaction support and consistency has been rising consistently and steadily

over the past 10 years.

As each new interaction format is added (online-email-chat-video and chat-social-mobile), the

contact center has had to step up to the challenge of interacting with a customer through whatever

interaction channel the customer chooses. Adding to this complexity today is the requirement to

perform this interaction consistently through "cross-channel" interaction. Cross-channel refers to

the process of a customer moving from channel to channel while engaging with the organization

within the same interaction — for example, with a customer beginning an exploration on the

organization's website, then requesting a web chat session, and then needing to move the

conversation to a mobile phone either because the conversation is becoming more complicated or

if, for example, the customer wishes to continue the conversation while on the move. IDC believes

that leading-edge providers will deliver browser-based communication solutions using WebRTC to,

among other things, enable communication (voice and ultimately video) from completely new

applications and devices.

Larger organizations see globalization of their organization as a way to create economies of scale

by consolidating customer support activities or contact center technology. However, to improve

customer service and experience, these enterprises need to support localized experiences. When

operating on an international scale it can be a challenge to find and maintain contact center

technology and processes globally that can adapt to local differences in customers' communication

habits and needs. This is even more so for medium-sized and small businesses. In terms of

telephone support, contact centers require local support numbers from all over the world, even if

contact center platforms and support teams are based in a different location. These services need

to be flexible and manageable at short notice to accommodate peak traffic. Having to deal with

different operators in each country to obtain local phone numbers and call capacity, and setting up

a network to transport calls internationally, is time-consuming and costly. From a cost-efficiency

perspective savings in overhead costs are considerable when a single global provider facilitates

the connectivity to local telephone networks, while consolidating the required telecommunications

infrastructure at a single place for all the countries in which it operates.

Common Goals, Various Models to Get There

Customer experience isn't just about live agents interacting with customers but also about the

business processes and systems that support those agents. Even the most well-trained and

experienced agent is limited by the applications used to interact with customers. Often,

cumbersome and siloed legacy systems can be the cause of poor customer experiences. To

benefit from the latest technology, more and more enterprises are opting for managed/hosted or

on-demand contact center services. This is particularly the case for those enterprises that do not

have the resources (financially or operationally) to purchase, implement, or maintain contact center

technology and/or activities. The ease and flexibility of hosted and on-demand contact center

services are among the key benefits that allow these enterprises to stay agile and enable the

interactions that are so important to customer experience, and to do this via the required (digital)

channels with local support.

IDC research indicates that while the majority of companies are still using on-premises contact

center solutions, a large number of them are evaluating the use of a hosted or on-demand contact

center service. According to IDC's 2014 Customer Care BPO Demand-Side Survey, 39% of

respondents were using a hosted or on-demand service, and 38% were evaluating a hosted or on-

demand service (see Figure 1). Only 23% of respondents were using an on-premises system and

were not evaluating a hosted or on-demand model.

©2015 IDC #IDCTS01X 3

FIGURE 1

Hosted and/or On-Demand Contact Center Services Adoption

Q. What statement best describes your company's view on the use of hosted and/or on-

demand contact center services? We are currently using:

Note: n = 115

Source: IDC's Customer Care BPO Demand-Side Survey, 2014

In addition to managing the contact center activities and required technology in-house, there are

basically two contact center service models provided by external companies:

Hosted, which is used to represent contact center services that are delivered via a

dedicated, single tenant model.

On-demand or cloud contact services, often referred to as SaaS, which represent those

services that are provided from a shared, multitenant architecture.

While hosted and on-demand services are different models, many of the same market factors

apply to both, and hosted is often seen as a stepping stone toward pure cloud contact center

services. The multitenant model increases some of the benefits of hosted services, such as

flexibility and lower cost, due to its shared architecture model.

Hosted and on-demand contact center services are often those systems that enable the

interactions that are so important to customer experience. Contact center services can include any

number of the following capabilities: ACD, IVR, skills-based routing, speech recognition, reporting

and metrics tools, CTI and CRM capabilities and/or integration, workforce management, online

recruiting and training platforms, and other capabilities that support contact centers and customer

care processes. Often, much of the functionality is optional and/or provided through partnerships.

These services are often the platform for supporting many channels, including phone, email, chat,

and social media.

The vendors providing hosted and on-demand contact center services and those involved in the

ecosystem are varied; there are pure-play cloud contact center providers (e.g., inContact, 8x8),

traditional on-premises unified communications (UC) and contact center providers that have often

0% 10% 20% 30% 40% 50%

An on-premises solution for the bulk of our contact center function and are not

evaluating a hosted and/or on-demand (SaaS or BPaaS) solution in the next 12–14 months

An on-premises solution for the bulk of our contact center function but are evaluating a hosted and/or on-demand (SaaS or BPaaS)

solution in the next 12–14 months

A hosted and/or on-demand (SaaS or BPaaS)service provider for the bulk of our contact

center function

©2015 IDC #IDCTS01X 4

entered the hosted and on-demand space in part via acquisition (e.g., Genesys, Avaya), BPO

providers (e.g., TeleTech, West), large IT outsourcers (e.g., IBM, HP), and telco companies (e.g.,

AT&T, Verizon). The contact center services ecosystem also includes partner vendors that often

provide ancillary functionality such as workforce management, often resold through the

aforementioned vendors (e.g., NICE, Verint). It also includes SIP trunking providers that primarily

focus on interconnecting local public switched telephone networks from all over the world with

centrally located contact center platforms using a global managed IP network (e.g., Voxbone).

These providers offer local telephone numbers (also known as DID numbers) from everywhere in

the world, and deliver calls to these number over a single SIP trunk.

IDC expects demand for hosted and on-demand contact center services to continue to grow due to

the previously mentioned benefits such as flexibility, scalability, and ease of use. For the U.S.

market, IDC forecasts spending on hosted contact center services to increase at a CAGR of 11.9%

to $2 billion in 2018. U.S. spending on on-demand (cloud) contact center services is expected to

increase at a CAGR of 17.5% to $1.6 billion in 2018.

IDC forecasts the worldwide outsourced customer care services market to grow at a CAGR of

5.9% between 2013 and 2018, from $61 billion in 2013 to $81.3 billion in 2018. By service activity,

IDC expects CRM technology hosting, the smallest chunk of spending, to grow at the fastest rate,

with a 16.9% CAGR over the forecast period. Customer interactions will grow by 5.7% CAGR

worldwide, followed by fulfillment/logistics at 2.4% CAGR (see Figure 2).

IDC expects spending on the technology outsourcing part of contact center services to continue to

be strong. This will especially apply to those medium-sized to large enterprises that have adequate

resources in the area of customer care activities, but are not sure how they can bring their existing

installation up to modern standards and how to incorporate modern (technological) capabilities

such as social media analytics and social engagement while keeping the lights on. Enterprises that

are relatively new and that are expanding quickly usually have little to no existing infrastructure.

These successful newcomers are often able to leapfrog to an end-to-end on-demand model —

outsourcing technology and perhaps also contact center activities — rather than trying to build an

advanced infrastructure on premises.

©2015 IDC #IDCTS01X 5

FIGURE 2

Worldwide Outsourced Customer Care Services Spending Activity, 2013–2018

($B)

Source: IDC, 2015

SIP TRUNKING HELPS ENABLE LOCAL SERVICES

An important technology development for the contact center industry is SIP trunking (where SIP

stands for session initiation protocol). SIP trunking has been available for a number of years, but in

the past five years we have seen interest in the technology growing strongly, and we can now say

that conversion to SIP is one of the major forces reshaping the call center. SIP covers all

enterprise communication, not just contact centers, but for many companies the journey to an all-

SIP environment starts with the call center.

IDC research shows that growth in SIP trunking services is evolving with the growing need for

consolidation, flexibility, and efficiency — all benefits that help to lower operational costs. For

globally operating enterprises and their contact centers in particular that need to localize or

improve localized customer support, these benefits apply even more. The more countries served

locally, the greater the synergy effect of the main benefits outlined below:

Network consolidation. Enterprises are seeking ways to reduce telecom spend by

leveraging their IP data networks for inter-site, intra-enterprise multimedia communication

and consolidation of connectivity to service providers. SIP trunking offers the ability to

consolidate the connection with the telephone network at a single site (or two sites for

redundancy), even globally, instead of having an ISDN line at every single site. The cost

and architectural advantages of this are obvious.

Flexibility. One of the key benefits of SIP trunks over TDM-based services is flexibility in

terms of capacity management and geographical reach. SIP trunk capacity can be

managed per channel, and while services provisioned on ISDN lines are linked to a

geography and location, location is not an issue with SIP trunks. Over a single SIP trunk,

telephony services from different locations nationally and even internationally can be

.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2013 2014 2015 2016 2017 2018

($B)

Customer interaction

Fulfillment/logistics

CRM technology hosting

©2015 IDC #IDCTS01X 6

delivered. For example, you might have needs in two locations, with 20 concurrent calls in

the U.S. and 20 concurrent calls in Germany. With TDM-based services, you would have

needed 40 channels. With SIP trunking, you can allocate your capacity so that you need

only 20 channels that you can use in the daytime in the U.S. and during the night in

Germany.

Efficiency. Instead of making the phone ever more complicated and expensive, SIP

integrates the phone with the computer and enables contact centers to work more

efficiently. Contact centers find it cost effective as it eliminates the need for more

expensive contact center desk phones without sacrificing functionality.

Other. When VoIP is coupled with SIP trunking the contact center can save costs by

cutting back on toll-free numbers, as VoIP services can be used to enable click-to-call,

which customers can initiate from their PCs or smartphones. In terms of enhancing the

customer experience, SIP trunking also enables HD audio, which can be a real

differentiator.

At the same time, however, there are some issues that can inhibit the growth of SIP trunking

services:

Complexity of implementation. Customers tend to underestimate the complexity of

undergoing such a transformational change when implementing SIP trunking, particularly

from a network architecture perspective. For some customers and SPs, this complexity is a

key challenge when looking at implementing and purchasing SIP trunking services.

Software and equipment versions. The existence of multiple vendors and multiple versions

of each vendor's software is also hindering SIP trunking growth. Some customers may

have several PBXs provided by different vendors at different times, making the whole

license and software process for SIP trunking more time consuming.

Equipment-related costs. The cost of upgrading the existing IP equipment (PBXs, session

border controllers, etc.) and obtaining the necessary licenses and software to use them

can account for a major part of a company's budget when considering implementing SIP

trunking services. Replacing local equipment with a centralized contact center solution in a

networked environment can, however, negate much of that cost.

Moving forward, IDC expects the benefits of using SIP trunking services to outweigh the

challenges. IDC believes the growth in SIP trunking services will also be fueled by VoIP migration

and equipment replacement cycles. A significant portion of the contact center networking

infrastructure is reaching end of life, and this includes key communications equipment such as UC

infrastructure and IP PBXs. Replacement cycles and upgrades will be key for SIP trunking

deployments. The new equipment being installed is mainly IP enabled and supporting legacy TDM

technology usually comes with a fee. An increasing number of vendors have made their equipment

SIP enabled in recent years. The growth in the number of home-based agents is also driving use of

SIP and IP-based softphone agents. Contact center agents can work from home while using the

same platform as in-office agents. This can often simplify operations, training, and reporting by

allowing the contact center data to flow through one system rather than in separate physical

locations.

For the European enterprise market as a whole IDC forecasts strong growth for SIP trunking, from

almost 2.8 million SIP trunk connections (equivalent to 49% of all business IP connections) in 2013

to 6.8 million (60% of all business IP connections) in 2018, at a CAGR of 19% (see Figure 3).

©2015 IDC #IDCTS01X 7

FIGURE 3

Penetration SIP Trunking in Western Europe, 2013–2018 (Million)

Source: IDC, 2015

SIP trunking services are being offered under a variety of models with a few offering international

SIP trunking services for both incoming and outgoing traffic. In most cases, these tend to be

incumbent operators offering the services to large multinational organizations outside of their home

market. However, not all providers offer SIP trunking services for call centers; in some cases the

service is only available for enterprise use, but not for call centers. Local SIP trunking providers, on

the other hand, tend to have a strong presence in their local markets but limit their service to

national traffic and outgoing international services. In most cases the local providers concentrate

on dedicated models inside their home market and act as an over-the-top provider, on top of other

service providers' networks (see Figure 4).

0

2

4

6

8

10

12

2013 2014 2015 2016 2017 2018

(M)

VoBB sites

Dedicated hosted VoIP sites

IP Centrex (sites)

SIP trunking (trunks)

©2015 IDC #IDCTS01X 8

FIGURE 4

SIP Trunking Provider Model

Source: IDC, 2015

VOXBONE CONTACT CENTER COMMUNICATION SERVICES: GLOBAL REACH,

LOCAL FOCUS

We have explained why SIP trunking services are increasingly deployed by businesses to deliver

the benefits and cost savings that are associated with the solution, especially for contact center

activities. As mentioned, there are various providers that offer these services.

Voxbone is one of the companies that offers solutions in this cloud/IP communications space. The

company was founded in 2005 and it has created a strong position in provisioning its customer

base with a variety of global IP communications services. Voxbone provides local geographical,

mobile, and toll-free phone numbers (also known as DIDs) from more than 55 countries (and more

than 8,000 area codes) over a single SIP trunk, using its own global private data network for

international transport of calls.

Its customer base consists of communication providers that are looking to extend the international

reach of their voice network, or to connect their cloud services to the telephone network:

Global telecom operators: Orange Business Services, Telefónica, NTT, Swisscom

Cloud PBX and SIP trunking providers: 8x8 Inc., RingCentral, Phone.com, CallTower

Cloud contact centers: InContact, Liveops, Five 9, Corvisa Cloud

BPOs: Capgemini, 5CA

Multinational enterprises that run their own contact centers, such as Sandvik, a global

leader in the construction machinery industry, and Trend Micro

MNCs

SMEs

SoHos

Incumbents(mostly outside home market)

Dedicated Model

Over the Top Model

National and local players(non-incumbents)

©2015 IDC #IDCTS01X 9

For contact centers and outsourcers it is important to bring calls to the local service numbers of

their customers to the offshore contact center, with high quality and at a reasonable cost. Many

contact centers operating internationally have agreements with multiple voice carriers for the

international reach of their telephone support service. For this, they are usually charged per minute

fees for the international transit of inbound calls, and this can be a substantial amount in the case

of toll-free numbers. In addition, the more countries involved, the higher the administrative burdens

of vendor management for contact centers. Although an increasing number of telco operators

provide their customers with SIP trunking services, global coverage is often too limited (global

carriers' networks reach up to a maximum of 30 countries on average), and often their offers are

limited to toll-free numbers. As Voxbone uses its private data network instead of international

PSTN transit networks, no per minute fees are charged for the international transport of the calls

as is the case with most telco operators. Instead, customers pay for the reserved call capacity on

Voxbone's global IP backbone, which can be shared by all 55 countries the company provides

services from.

Voxbone's strength lies in the synergy the company brings between traditional voice networks and

next-generation IP communication networks. In all 55 countries Voxbone interconnects with the

local telephone network and has a telecommunications license or authorization from the local

regulator. In the majority of countries, the company operates its own geographical, mobile, and toll-

free telephone number ranges. In countries where Voxbone doesn't have its own numbers, it

collaborates with a licensed local voice operator. Voxbone connects its access to these local

phone networks to one global MPLS network, which it uses to transport calls internationally. In

every continent, Voxbone has points of presence from where it delivers calls to its customers, over

a single (or redundant) SIP trunk. This approach results in a higher degree of centralization,

standardization, and simplification of VoIP services for these countries compared with connecting

to local networks via local voice (SIP) trunks. Another benefit is the automation of (web portal and

API) provisioning for Voxbone's customers. Instead of processing times that vary from weeks to

months after a customer's request to update capacity or add new services, web-based automated

provisioning takes just a few seconds. This is a huge benefit for contact centers that are highly

impacted by seasonality and in need of the earlier mentioned flexibility. Voxbone also offers

number portability, allowing contact centers to port customer support numbers operated by local

telecom operators to its network.

Compared with other similar VoIP service providers' offerings, Voxbone's VoIP/SIP trunking

services come at a higher price, but this also translates into high quality of service (QoS). QoS can

be measured in terms of availability, audio quality, and call success rate, and relates to the level of

support and redundancy on the network, systems and database, hardware, datacenter, and NOC

redundancy. QoS is a major focus area for Voxbone, as seen in its 24 x 7 support, proactive

service availability monitoring, and many levels of redundancy.

While Voxbone originally focused on providing international phone numbers to retail

telecommunication service providers and telecommunication groups, its services have become

increasingly popular with multinational contact centers. Many corporations are consolidating

customer support and sales services internationally to increase efficiency, save costs, and develop

expertise. On the other hand, as service and product reach expands internationally, customer

service needs to expand in a similar fashion. In addition, customers require a localized customer

support service including the ability to dial a local support number, even if the support agent taking

the call is located in another country, or even on another continent. Using traditional

telecommunication services, this requires a complex and costly set up. Voxbone delivers local

telephone numbers from 55 countries, and delivers these calls over a SIP trunk to regional or

global support centers. Services are priced at a flat rate and can be provisioned and managed via

©2015 IDC #IDCTS01X 10

a web portal controlling a fully automated back office. As a result, Voxbone has seen strong growth

in contact centers among its customers. The majority of those offer services on a global scale, from

a limited amount of physical locations, in ecommerce, tourism and hospitality, automotive, and

logistics.

In terms of new services for contact centers, Voxbone recently introduced the WebRTC-to-SIP

delivery network service. This service adds two capabilities to WebRTC: firstly, Voxbone routes

WebRTC calls over its private global backbone instead of the public Internet, adding high levels of

quality of service and security. Secondly, calls are delivered over a regular SIP trunk, allowing

Voxbone customers to start using WebRTC without the need for additional investment in network

infrastructure. As such, this service is ideal for contact centers wanting to enable "click-to-call"

support from their web applications. Another application of Voxbone's service is the use of its local

phone number as dial-in numbers for conference bridges, either by cloud conferencing providers or

by corporations operating their own conference bridge, for example using Microsoft Lync. To date

Voxbone is the sole DID provider certified for MS Lync 2013, which is becoming increasingly

popular with many businesses.

In addition to inbound SIP trunks, Voxbone provides its customers with the option of dialing local

emergency numbers (such as 112 and 911) in around 20 countries from a PBX that serves multiple

countries. 112/911 calling is mandatory from a telecommunication regulations perspective, but is

often not offered by SIP trunking or cloud PBX providers. As a result, many corporations need to

keep a local telephone line at every site or location to allow calls to local emergency services.

Voxbone allows enterprises and communication providers to cut the last link with the local

telephone network by taking its 112/911 calling service "from the cloud."

CONCLUSION

The need to enhance and innovate customer experience is growing. Customer service and contact

center solutions have been trying to meet the needs of the masses, and adapting simply to the

situation as it looks at the moment of contact. However, influences from the consumer market are

leading to changes in how end users prefer to interact and how they expect customer services to

be provided. Customers now expect cross-channel knowledge of earlier interactions, and

consistent support irrespective of when and how they communicate or from where they chose to do

so. This means that contact centers must be much more innovative and agile than ever before to

meet these growing expectations. In addition, contact center managers understand the need to

deploy contact center technology and processes globally, but that take into account customers'

local differences in communication habits or needs. Localization of service support is key, and will

continue to be so.

Contact center managers are questioning how they can bring their existing installation up to

modern standards and how to incorporate modern capabilities such as social media analytics and

social engagement while keeping the lights on. For enterprises with contact centers it is also

increasingly important to have capabilities such as flexibility and scalability to address seasonal

changes, consolidation of systems for international consolidation of customer support activities,

and international expansion of customer service operations. As for an increasing number of

enterprises with contact centers, hosted and/or on-demand contact center services are the answer.

For some of these enterprises existing (premises-based) infrastructure is at the end of its life cycle;

others are successful newcomers that are expanding quickly and leapfrogging to an end-to-end on-

demand model — outsourcing technology and perhaps also contact center activities — rather than

trying to build an advanced infrastructure on premises. All of these drivers indicate that contact

©2015 IDC #IDCTS01X 11

center technology platforms are clearly moving toward as-a-service models in cloud or hosted

deployments.

An important technology development for the IP telecommunications industry and its customers is

SIP trunking. The contact center is a natural place to test out SIP trunks because it may be easier

to centralize a subset of the communications infrastructure than it is to try and move the whole

system over. SIP trunking has proven that it can enable or improve consolidation, flexibility, and

efficiency — all benefits that help to lower operational costs. For globally operating enterprises and

their contact centers in particular, SIP trunking is an important transport technology service to

enable or improve localized customer support. Since most contact centers are inherently B2C in

nature, this represents a large chunk of the enterprise's voice traffic going to and from the public

network. For contact centers with a major international reach, global SIP trunking services are an

efficient and cost-effective solution to provide local, geographical, and toll-free support numbers

from all countries required. Using a private data network for the international transport of calls is a

key requirement for carrier-grade voice quality and an important cost saver as it avoids per minute

fees for international transit. Such a service offers the opportunity to consolidate contact center

infrastructure, localize customer experience, and reduce telecommunication costs.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory

services, and events for the information technology, telecommunications and consumer technology

markets. IDC helps IT professionals, business executives, and the investment community make

fact-based decisions on technology purchases and business strategy. More than 1,100 IDC

analysts provide global, regional, and local expertise on technology and industry opportunities and

trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help

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