VoIP vs. SIP: Differences and Which One Is Best for Your Business

Every business needs a comprehensive communication solution to ensure reliable internal and customer-facing contact. When it comes to researching which business phone system will best meet your needs, it can get confusing because there are so many unfamiliar terms and acronyms.

One question business owners are often left with is whether they should go for a VoIP system or a SIP one. It’s not a direct comparison and they can work together to support high-quality telephony. So let’s get into what they are and how they compare.

What is VoIP?

Voice over internet protocol is a phone system that enables voice calls over the internet. There’s no need for phone lines or the Public Switched Telephone Network (PSTN) like with traditional landlines. VoIP technology can translate voice signals into data packets which can be sent over digital networks and translated back into audio for the receiver.

This makes VoIP calls a lot more accessible to small businesses because they just need simple hardware such as mobile devices, a VoIP service provider, and reliable broadband. As a wireless phone service, it’s perfect for teams on the go that don’t want to be weighed down by desk phones.

What is SIP?

Session initiation protocol or SIP deals with various types of data packets, enabling multimedia communications. As SIP handles multimedia communication sessions, users can communicate through voice calls, video calls, SMS, and more. The endpoints SIP transfers data between may be internet-connected. Or by using SIP trunking, it can also connect with landline phone numbers.

This gives businesses a lot more freedom in how they communicate. Sometimes voice communications are enough but some teams prefer to keep in contact through instant messaging and video conferencing as well.

SIP vs. VoIP: 4 Differences

The main difference between SIP and VoIP is the role they play in communications. VoIP refers to running voice calls over the internet. SIP encompasses the protocol for establishing, maintaining, and disconnecting communication sessions such as VoIP communications. Therefore, you can use both. A VoIP service provides internet-based voice call capabilities, often using the protocol SIP. A SIP service provides multimedia communications including VoIP.

Technology

The technology used to power a VoIP phone system is different from that of a SIP system. VoIP just needs to be able to turn audio into data packets, transfer it over the internet, and turn it back into audio for the receiver to listen to. SIP systems use technology to transfer and manage multimedia communications over the internet and connect with traditional phone lines through trunking.

Functionality

SIP protocol has much wider functionality. It allows users to communicate through voice calls, video calls, and messaging. It is a unified communications system because multiple communication channels are managed together. VoIP phones limit users to voice-based communication unless the provider offers additional features.

Scope

SIP’s scope includes voice-based and text-based communication through an internet connection or PSTN. VoIP has the scope to maintain voice calls over the internet and using wireless devices like laptops, cell phones, and any mobile device compatible with the provider’s app.

Interoperability

Beyond the embedded communication channels, the SIP trunking service creates a connection between the internet-based transmission of communication data and traditional telecommunication through PSTN. The integration possibilities of VoIP depend on the service provider. Some providers only offer basic voice call capabilities while the VoIP phone within the Podium platform integrates with text, webchat, CRM functionalities, and more. 

VoIP vs. SIP Pros and Cons

If you’re considering setting up a VoIP or SIP phone system, bear in mind these pros and cons. 

VoIP Phone Pros

• Cost savings
• Easy set up
• Flexibility (can manage from an app)
• Integrations
• Additional features (e.g., text messaging, central inbox)

VoIP Phone Cons

• Requires internet connection and power
• Emergency calling limitations

SIP Phone Pros

• Centralized business communications
• Customizable to your business needs
• Scalability
• Cost-effective

SIP Phone Cons

• Relies on internet connection
• Complex implementation and configuration (e.g., setting up a PBX) 
• Security considerations

How to Choose Between VoIP and SIP?

For most businesses, VoIP is the best option because it’s flexible, accessible, and easy to use even for small startups. Here’s the best way to choose your business phone solution. 

1. Define your communication needs.

What does your business need for successful communication? Your needs could fit within the parameters of a VoIP provider with a platform that includes text messaging and instant messaging alongside voice calls. Your team might prefer to manage calls including re-routing and queuing within an app which is possible with VoIP.

Or your business needs may better suit a SIP provider that offers UCaaS tools. It works particularly well if you already have an IP PBX on site that can be set up for VoIP using a SIP trunk.

2. Consider scalability and future growth.

Don’t just meet your current communication needs. Keep in mind your vision for the future of your business. You may want to start with just voice calls but in the future, you may have the capacity to also offer a text messaging service for clients. Or you may aspire to set up an office in a different location making video calls important for connectivity.

3. Assess integration and compatibility.

Different service providers offer different integrations. Whether going for VoIP or SIP, you need a phone system that is compatible with the other tools you use in the business. Streamlining communications, customer service and sales processes make a real difference in productivity and business outcomes.

4. Evaluate cost and budget.

Generally, the pricing of VoIP phone systems is more affordable than SIP phone systems because SIP has more hardware and software to set up. If you already have company computers or cell phones, you can quickly get started with a VoIP provider just through their app. What can you invest in your business communications?

The Best Phone System for Business Growth

Podium’s VoIP phone system is built with small businesses in mind. We know how much of a challenge it can be to respond to interactions quickly over multiple communications platforms. That’s why we’ve set up our phone system to automatically route to an omnichannel inbox where you can also access all your webchat, text, and social media messages among other communication channels.

Every touch point in the customer journey is managed in a singular system, maintaining a full picture of business communications and enabling integrated organization of customer data. You can be responsive without missing a thing.

The success story of Budget Blinds of Salt Lake and Davis Counties is just one example. With Podium Phones they were able to increase their sales close rate by 33% and save over 10 hours a week by routing 25% of calls to text.

If you’re interested in an all-inclusive platform, give Podium Phones a go.

VoIP vs. SIP FAQs

Q: Is VoIP the same as SIP?

A: No, not exactly. VoIP technology allows you to have voice calls over the internet instead of relying on phone lines. SIP is a communications protocol that deals with voice calls both over the internet and using traditional phone lines as well as other multimedia communications such as video calls and instant messaging.

Q: What is SIP trunking?

A: SIP trunking expands the capabilities of IP telephony by connecting the phone system to both the internet and the PSTN. That means the phone service can be used to call internet-based phone numbers and traditional telephone lines.

Q: Is SIP used in VoIP?

A: SIP is the protocol for how communications data is transferred. That data could be a voice call transferred over the internet, therefore VoIP, or another multimedia communication. SIP can also be used to connect VoIP with PSTN enabling calls to landlines through SIP trunking.

Q: Can you have VoIP without SIP?

A: Yes, that’s possible. While SIP is a common communication protocol that handles voice calls over the internet, there are other internet protocols VoIP providers can use to enable internet-based voice calls.