SIP vs VoIP: How They Work for Your Business

Business relies on communication. Interaction between team members, collaboration across departments, and open dialogue with customers are all critical types of business communications. A company’s choice of business communications solutions impacts everything from hiring to team productivity and customer service. As you research options, you’ll no doubt have questions about SIP vs VoIP.

It is important to understand the terminology when researching telephony and collaboration platforms. With so many terms like IP-PBX, PSTN, PRI, ISDN, and more, buyers can become confused. The same is true with SIP and VoIP. Though used interchangeably, they are not synonymous. SIP trunking connects internal phone systems directly to the public switched telephone network (PSTN), while VoIP relies on internet connectivity for voice communication.

Business owners and managers today have different levels of knowledge and experience in technology-related terminology. Unless you’ve had significant experience in telephony, you may only know what little you’ve heard or read, and that information could be wrong. We’ll help you by explaining the acronyms and giving you some examples to show how it works.

Clearing up the Confusion between Session Initiation Protocol (SIP) vs VoIP

Session Initiation Protocol (SIP) is a communication protocol that organizations widely use to start and finish multimedia communication sessions, such as voice and video calls. Voice over Internet Protocol (VoIP) is the technology that lets users make voice calls using an internet-enabled device over a broadband connection. VoIP facilitates the transmission of voice data over internet networks, transforming internet connections into effective means for making phone calls, thus establishing and maintaining voice communications. Though different, they are closely linked, leading to the incorrect assumption that they are the same. In short, SIP is one of the specific protocols enabling VoIP.

SIP facilitates the messages traveling between endpoints and the rules for the establishment and termination of each session. Organizations can use SIP to transmit information between two internet-connected endpoints or many.

In addition to voice calls, they can use SIP for video conferencing, instant messaging, media distribution, and other applications, which means it is a highly flexible technology. SIP also enables SIP trunking, expanding the capabilities to communicate not just between internet-connected endpoints but to any phone number, whether landline or virtual.

Related: The Benefits of SIP Trunking for Your Business: Why You Need It Now

Both SIP and VoIP enable voice calling. The difference is in the capabilities of each. If all you need is voice calling, then you can choose a pure VoIP solution without SIP. If, however, you run a thriving business with the need for conducting virtual meetings, sharing documents or videos, or interacting through instant messaging and other multimedia communications, you need SIP. 

What is SIP and VoIP?

SIP (Session Initiation Protocol) is a signaling protocol for voice calls

Session Initiation Protocol, or SIP, is a fundamental technology in modern telecommunications. Think of SIP as the behind-the-scenes director that sets up, manages, and ends voice calls over the internet. It’s a signaling protocol that ensures your voice communication is smooth and uninterrupted. SIP is crucial in VoIP technology, acting as the bridge that connects different devices and facilitates the exchange of information necessary for voice calls. Whether you’re making a simple voice call or engaging in a complex video conference, SIP is the protocol that makes it all possible.

VoIP (Voice over Internet Protocol) is a technology for making voice calls over the internet

Voice over Internet Protocol, commonly known as VoIP, revolutionizes how we make phone calls. Instead of relying on traditional phone lines, VoIP converts your voice into digital data packets and sends them over the internet. This technology allows you to make voice calls using a broadband internet connection, offering a cost-effective and feature-rich alternative to conventional phone systems. With VoIP, you can enjoy clear voice communication, often with added features like voicemail, call forwarding, and even video conferencing, all without the hefty price tag of traditional phone services.

The Roles of SIP vs VoIP in Voice Calls

Using VoIP as a standalone can be a cost-effective option for small or new businesses that have only a few colocated employees. It provides the voice calling functions every business requires. However, most organizations typically use VoIP in conjunction with an application, such as Teams, Skype, or Google Meet, with IP-enabled PBX devices or via a hosted VoIP service that uses SIP technology. 

While VoIP by name is a protocol or set of rules, it is more accurately a term for a set of technologies necessary for transmitting voice data. Multiple protocols, known as a protocol stack, are essential for communications between networked devices. SIP is one of those protocols. One of the best ways to differentiate SIP vs VoIP is from a quote by Gary Audin, tech writer and VoIP and IP telephony expert: 

“SIP is a media-independent protocol—it’s not voice, it’s not video, it’s not data—it could be anything. While it’s mostly applied to VoIP, it’s not a VoIP protocol.”

In layman’s terms, think of SIP and SIP trunking as a virtual highway. Along that highway, you may find destinations that are internet connected, such as a cafe or coffee shop with free WiFi. There may be others like a bait shop or convenience store that only have landlines. VoIP is the car that takes you along the highway to one or more destinations of your choice. 

How SIP and VoIP Work Together

SIP trunking: a method of connecting traditional phone lines to the internet

SIP trunking is a game-changer for businesses looking to modernize their communication systems. It’s a method that connects traditional phone lines to the internet, allowing businesses to make voice calls over the internet using their existing IP PBX infrastructure. By leveraging the SIP protocol, SIP trunking establishes and manages voice calls efficiently, providing a seamless transition from traditional phone lines to VoIP telephony. This approach not only reduces costs but also offers scalability, making it an ideal solution for businesses of all sizes. With SIP trunking, you can enjoy the benefits of VoIP calls while maintaining the reliability of your current phone system, all through a robust internet connection.

Deployment Examples

When you hear the term VoIP, you may imagine a hosted VoIP solution where the vendor hosts and operates the PBX functionality, like call handling, voicemail, and other applications. The customer’s IP-enabled phones connect to the internet and ultimately to the vendor’s servers and software. This, however, is just one type of VoIP deployment. While there may be initial costs associated with a VoIP setup, the long-term savings and benefits make it a valuable investment.

SIP trunking is a more comprehensive approach, delivering telephone services and unified communications to customers with SIP-enabled PBX and unified communications solutions. In this case, the PBX provides call management, voicemail, auto attendants, and other features.

SIP trunks establish the connection between the PBX and the public telephone network, replacing the need for legacy telephone lines or Primary Rate Interfaces (PRIs). Working with the right provider gives businesses the ability to select the IP-PBX hardware and software that works best for them while freeing them from the expense and inflexibility of traditional phone lines and carrier relationships.

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The other ways to deploy VoIP are managed and hosted IP PBX. The latter is a hassle-free version where a provider oversees everything for you. With a hosted IP PBX, you don’t have to buy the hardware or set up the SIP trunking because you get a pre-configured VoIP system.

A hosted IP PBX is ideal for companies without the capital for a fully customized SIP trunking service. Remember that this solution involves creating applications and buying hardware, so if your company isn’t ready or doesn’t have the budget, you have the choice of going for a managed IP PBX. SIP technology, however, is fast becoming the preferred method of deploying VoIP across an enterprise.

Benefits of SIP

Among the benefits of SIP with VoIP are its reduced cost, augmented efficiency, and scalability compared with older systems. Let’s look into the advantages in more detail.

Cost Efficiency of SIP Trunking

Traditional enterprise phone systems took a considerable investment to not only implement but also to maintain. There was a phone line installation, new hardware to purchase, and then you had to hire someone to route calls. As a business grew, it required more phone lines. Then there was the monthly service plan, long-distance fees, international call tolls, and other add-on services. 

Using SIP with VoIP can save companies up to 60% over traditional business phone systems and services. That number could increase if the company conducts a considerable number of long-distance or international calls. Not only is the overall bill lower, but it is predictable from month to month—and there is no need for a hefty hardware investment.

Mobility and Scalability

With SIP, your entire organization stays connected—whether your staff is virtual, colocated, traveling, or at client sites. It allows communication to and from mobile devices, computers, or landline phones. SIP lets you consolidate your voice and data into a single network. Since there is no need for physical lines, scaling is quick and easy as your organization grows or as your business needs change. 

Rapid Return on Investment (ROI)

As you can imagine, traditional business phone systems took years to produce an ROI. They served a valuable purpose, but many companies were left waiting for that return when technological advances made their equipment obsolete. SIP, on the other hand, requires no capital investment and little upfront costs to implement. With minimal initial investment, the ability to choose only the services you need, and no expensive hardware that can become obsolete, you realize an almost immediate ROI. 

Unified Communications

Today’s operations typically require a variety of communication tools. However, having multiple, disparate software systems is a training and maintenance headache. SIP enables your organization to move to an integrated suite of communications tools.

Unified Communications as a Service (UCaaS) puts all your communications and collaboration tools on one cloud-based managed platform. Your teams can access anything they need to stay productive and serve their customers, from video conferencing to instant messaging, presentation software, collaboration apps, and other business tools, on one cohesive, integrated platform. Since it is a managed platform of integrated software, your team never has to worry about patching, updating software, or potential software incompatibility.

Reliability

SIP is highly reliable. Your connection remains stable even if the internet is not. By providing redundancy, SIP allows you to continue your communications and collaboration even in the event of a failure. 

Ease of Administration

SIP trunking provides an administrative dashboard that makes changes quick and simple. You can add lines, change how your calls are routed, add or remove services, and much more. In only a few minutes, you can add, change, or discontinue service, as well as buy and manage phone numbers, modify billing preferences, and review and export real-time call data records. Everything you need to manage your enterprise communications is on-demand.

SIP vs VoIP Made Easy

Understanding the difference in SIP vs VoIP is as simple as understanding that they are different technologies that are fully customizable to work together. SIP is preferred by so many companies in all types of industries because it is easily implemented, highly scalable, and cost-effective—no matter the budget. It opens the door to the communication and collaboration abilities you need to stay productive and competitive. 

Getting the most out of your SIP and VoIP services means having the right provider partner. SIP.US offers straightforward SIP trunking solutions to businesses looking to improve their communications and reduce costs. Partnering with SIP.US makes a VoIP transition easy with the proper SIP trunking deployment to fit any business’s needs. Get started now.