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What Is a SIP Proxy? How Does a SIP Server Work?

If you’ve used VoIP before, you may have heard the terms SIP server, SIP proxy, and SIP registrar and asked yourself, “what do these terms mean?”

Answer: these terms mean the exact same thing. Essentially they are the technologies that enable Voice Over Internet Protocol (or VoIP) . It is the job of these technologies to manage all SIP calls made through a network (explained below).

This article will explain exactly how a SIP server works. But in order to do that, let’s first start by breaking it down to its two component parts: SIP and proxy server.

Defining The Components of a Sip Proxy Server

Let’s begin with SIP.

SIP stands for ‘Session Initiation Protocol’. It’s a term used to describe the technology that allows communication sessions between different parties, often using more than one medium, to take place. It brings together many of the ‘building blocks’ needed to make phone calls via an internet connection (aka VoIP calls).

how the sip proxy server works with voip

SIP is the means by which any VoIP calls over a network are properly connected and then safely disconnected once they are finished. Through SIP, a connection is established between any number of endpoints. This connection enables voice and video data to then be transmitted between them, so everyone who is connected can hear, and take part in, the same call.

A proxy server, on the other hand, is a computer system or application which receives and processes requests from a piece of hardware or software (for example, when you type in the address of a web page or want to open a file).

Synergy Between the Components

When brought together, these two technologies are essentially the heart of the system, responsible for routing calls correctly or initiating a range of other options. These options include alerting operators that a caller is on hold and redirecting them correctly according to any rules in place for call handling.

The SIP proxy server doesn’t just allow you to send and receive voice calls using VoIP – it also does the same for instant messaging, video conferencing and transmission of media (i.e. sound and images).

how SIP ties into types of communication

You could describe it as a ‘Highway Code’, providing the rules to ensure that all this traffic flows freely through and between networks to enable seamless, unified communications.

Ensuring Common Standards

Development and oversight of the common standards needed for SIP has been handled by the Internet Engineering Task Force (IETF), which has helped ensure that all communication using voice, video, and other media is of the highest quality.

This has helped make VoIP calling a compelling proposition, not only in quality terms, but also price. Like sending an email, voice and video calls between SIP users cost little to nothing, no matter how distant the parties involved.

There is also no charge for obtaining a SIP address. This isn’t exactly the same as a phone number, but most SIP addresses are associated with a unique phone number – simply because it’s a numbering system which is more widely and easily accepted and understood. So each user on a SIP network can have their own phone number to allow them to make and receive direct calls.

Because it is available for free and can be easily scaled, SIP is fast becoming the ideal solution for businesses looking to grow.

statistic on sip proxy server use

It also means that businesses can use these systems in a package with a hosted cloud PBX (private branch exchange) system, such as one offered by us here at Nextiva. That means that your business or organization doesn’t have to worry about maintaining its own PBX – with the associated hardware and maintenance costs.

Instead, the phone sets on your staffs’ desks will be plugged into a router which is directly connected to our IP-PBX server, through which you access all the system features you use.

At the same time, you can get access to all the VoIP features you’ll need to monitor and control your phone system usage.

These features include, but are not limited to:

  • Automated greetings
  • Call logging
  • Call forwarding
  • Call parking
  • Advanced call analytics
  • Etc.

SIP Vs VoIP – What’s The Difference?

While VoIP is the most common application for SIP technology, SIP extends beyond phone systems and into all digital media. It is capable of handling everything from instant messaging to video and other multimedia content.

So SIP opens up a completely new world of possibilities for sending the whole range of different types of media using your internet connection.

Because of this, SIP brings you all the benefits of using VoIP, including unlimited access to a range of ways of communicating with people aside from voice calls.

So it has all these media at its disposal for sending out its marketing and customer-focused messages. That means you can make them more varied and much more closely tailored to the kinds of message which all segments of your customer base prefer to receive, and be able to react more readily.

What Is A SIP Server and What Does It Do?

A SIP server is an important part of any PBX (private branch exchange) telecoms network used within any business. It is a facilitator of all the various elements which make up any communication between two or more endpoints.

sip server / sip proxy diagram

It’s similar to a signalman on the railway who makes sure that all the points are set in the right order, and the signals are at ‘green’ along the route of the message, so that it can be transmitted.

Then, once a communication session is completed, the ‘signalman’, in this case the SIP server, ensures and the line is cleared and it is ready for the next call or message.

It’s broadly the same as what happens when someone says ‘Hi’ to signal that they want to start a conversation. This process essentially establishes the connection between two networks when they detect that two or more people want to exchange messages.

The SIP proxy server is also known as the ‘decoder’ which ensures that any message, in whatever format, can be received. Once the connection is established the server will then action messages accordingly (i.e. placing a caller on hold or transferring them to another extension).

Finally, once a call is complete, it will ensure that the session is properly ended.

How Messages Are Sent

In order for large amounts of data to be sent almost instantaneously, each message is broken up into any number of packets. Each packet contains a portion of the original message. Once these packets reach their intended destination they are then re-assembled in their proper, understandable order.

In preparation for this packet transfer, a SIP server will first send signalling packets. Once these signalling packets have been acknowledged by the receiving network then the system knows it can proceed to transfer the intended message.

How SIP Servers Help Keep a VoIP Network Secure

In order to keep messages safe before and during transfer, SIP proxies start by checking a caller’s identity. In VoIP this information is communicated through the IP address. But ensuring the data is being sent to a safe IP is only the beginning.

Nowadays each SIP server is also required to use a form of Message Digest (MD) Authentication. This authentication process is now in its fifth generation and currently goes by the acronym MD5. It works by a SIP proxy server challenging the identity of a SIP user agent, and converting a message of any length into a random alphanumeric code of a fixed length.

The diagram here explains how MD5 generates its codes – a process known as ‘hashing’. At the bottom, you can see examples of its unique output to code and authenticate every message:

MD5 hashing use with sip proxy servers

As you can see, MD5 adds a layer of security by encrypting bits of data. If networks need additional security beyond MD5 they can then opt for what’s called a Secure Multi-purpose Internet Mail Extension (S/MIME). An S/MIME goes beyond the industry standard by encrypting all data in each message.

Technical Aspects of SIP Proxies: Modes of Operation

A SIP proxy server will operate in one of two modes, depending on its level of sophistication. These two levels are:

  • Stateless
  • Stateful

1. Stateless

A basic SIP server is what’s called ‘stateless’. That is, it just receives and transmits information needed to do its job but doesn’t keep any record of it. Once you’ve been connected to make a call or to the person receiving your message the stateless SIP server’s job is complete.

stateless sip proxy server

Because of the simplicity of a stateless proxy server it is easy for businesses to scale and upgrade. The server also operates at a slightly faster speed because it only has to worry about a limited amount of functions. Though the difference in speed is often negligible, this is important to note in case you find your current system struggles to keep up with your business needs.

2. Stateful

A more sophisticated form of SIP server is also available, known as a ‘stateful’ server. This not only transmits information but stores it to be accessed later. For example, if your first attempt to connect is unsuccessful it can hold onto the call or message and keep re-trying to establish the connection.

Because it remembers information about each action, a stateful SIP server can also pick up a request again and re-route it through another part of a network.

stateful sip server

A common example of this is having ‘day’ and ‘night’ modes on a phone system. Stateful SIP proxies make it so that businesses can route calls to different devices, departments, or offices depending on the time of day. So someone could call at 2pm and speak with a support representative in California. Then when they call again at 10pm they’ll be routed to someone in Ukraine.

Key Benefits of a SIP Proxy

While its main job is to keep a telecoms network running smoothly, a SIP proxy server offers a number of other key benefits, beyond those outlined above.

Keeping your network secure: A SIP proxy server will stop hackers from hijacking a SIP proxy server and getting access to free voice calls or other communications. A proxy server will disconnect anyone who tries to use SIP calls without enough credit to pay for them, or authorization to use the service. Or it can check that a caller has the credit needed, and, if not, disconnect them.

Easy call forwarding: SIP proxies can also forward inward calls to several SIP devices, enabling them to ring on any number of phones. In a busy call center, for example, this can be a boon, as it ensures that inward calls are quickly answered. Or it can send a call to a list of phones in sequence and ring each one until the call is picked up.

Saving callers’ details: Using a stateful SIP proxy, all your calls, messages, and files sent and received will be saved, letting you access or re-send them later if they don’t get through first time. You also maintain a record of all calls made. So if having a full record of what’s been said in VoIP conversations is important for your business, then you should get a stateful SIP server from your network provider.


A SIP proxy server keeps calls flowing smoothly, ensuring that your VoIP call traffic is handled as efficiently as possible. It enables you to cut costs and easily scale as your business continues to grow.

If you aren’t already taking advantage of VoIP contact Nextiva. Our support specialists are ready and excited to help your business grow. Whether you are just getting started or already have offices across the globe, we can help you determine which solution will fit your business needs. Chat with us on our site or visit our VoIP solutions page to learn more.













About the author

Cameron Johnson is a market segment leader at Nextiva. Along with his articles on Nextiva's blog, Cameron has written for a variety of publications including Inc. and Business.com. Cameron was recently recognized as Utah's Marketer of the Year.

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(800) 799-0600

See how Nextiva will transform
the way you communicate.