A RADICAL CHANGE

SIP Goes Mainstream

IP voice technology finally has morphed into what could be network service providers' best bet for producing new revenue during times of radically reduced capital spending.

The opportunities swirling around new approaches to packet communications built on the Internet Protocol go to the heart of what was the promised big payoff in IP voice -- the ability to quickly develop virtually any type of communications application for any market niche at very low cost.

Now this can be done without requiring the forklift upgrades long associated with the concept of carrier-class VoIP. This is thanks to a surge in development activity surrounding the distributed intelligence architectures made possible by a deceptively simple addition to the IP packet header known as the Session Initiation Protocol (SIP).

During the past year, SIP has gone from being a platform backed by the radical fringe in VoIP to serving as the linchpin in communications strategies.

"SIP has captured the imagination of people who are pushing next-generation applications," says Itamar Gilad, SIP product manager for RADVISION Inc., a supplier of VoIP development toolkits for the SIP environment and the previously dominant H.323 architecture.

Gilad lists interactive voice response (IVR) systems, "all sorts" of unified messaging, programmable servers and instant messaging as key targets for developers. But he also notes there's a lot of development activity focused on more traditional voice applications.

"I think there's a good chance the technology will have a bigger impact at first in these more basic areas," Gilad adds.

For example, the technology's versatility allows service providers to set up a centrally controlled telephony network via use of softswitches and distributed gateways. Or they can feed calls to and from the existing PSTN via SIP proxy servers and gateways in a less centralized, lower cost model, as WorldCom Inc. has done in its move to roll out IP voice services during the past few months.

Especially significant to network service providers that already are delivering circuit-switched voice is the fact that the recently standardized PSTN interface extension of SIP, known as SIP-T, has provided the flexibility to deploy IP communications enhancements from a PSTN foundation.

In what could be viewed as the quasi-official kickoff to the new era in IP communications, Microsoft Corp. and WorldCom demonstrated the implications of SIP and its inclusion as part of the new Windows Messenger protocol stack at Microsoft's Oct. 25 unveiling of its XP operating system.

WorldCom, the first major carrier to implement a VoIP SIP-based architecture, provided the networking platform that Microsoft chairman Bill Gates used to demonstrate how users with computers or other devices equipped with the new operating system could make PC-to-phone calls over any SIP-enabled network without having to download special client software.

WorldCom also demonstrated how a service provider could use the technology to add enhancements to SIP-based communications, in this case adding find-me/follow-me features from its own SIP proxy servers without requiring the end user be equipped with anything but the basic SIP protocol in an end device.

"SIP is now much less on the fringes of the marketplace as a result of Microsoft's decision to make it part of XP," says Henry Seinnreich, distinguished member of the engineering team at WorldCom. "For us, the decision to move forward with IP communications services this year is based on (the engineering group's) ability to demonstrate that, using our in-house-developed SIP server, we could meet management requirements for developing meaningful call features and moving them quickly to execution."

What makes SIP so compelling, Seinnreich and others note, is the fact that the information identifying the nature of the communication, setting up the call and controlling it is embodied in the IP communications packet.

As a result, each session can be structured to include two interacting parties and other SIP-equipped locations where special features or information can be brought into the communication without requiring that everything be managed from a central switching or provisioning location.

In its simplest iteration, this operating environment means that two people communicating via devices that run SIP can call each other via IP packet streams without requiring the involvement of a VoIP service provider. But, in terms of the commercial potential for SPs, this environment also means that virtually any type of enhancement can be added to a two-way call or multi-user conference from remote servers over the IP network, whether or not the SP serves as the provider of the primary voice services for those end users.

An example of how this flexibility can be put to use by a niche player can be seen in the services offered by Denwa Communications Inc. Denwa has been building functions into its system incrementally by partnering with various SIP application suppliers ever since it became a beta customer for Nuera Communications Inc.'s first soft switch two years ago.

Denwa began as a provider of private line services and evolved into a supplier of IP-based toll bypass to international concerns. It then needed a way to avoid the quality loss occasioned by the need to compress, decompress and recompress signals as they moved from the overseas originator to its U.S.-based Class 4 gateway and on to the receiving party.

"Nuera and other parties told us that using SIP in conjunction with SS7 would allow the end media gateways to talk to each other, allowing us to avoid the double compression and switching we were doing in New York," says Denwa COO Trevor Dearman. "This gave us a huge advantage in service quality."

Today, Denwa is providing soft-switched dial tone service and features over LANs via either IADs or directly to SIP phones such as those supplied by Pingtel and Siemens AG.

Features include unified communications and standard call features such as Caller ID, call forwarding, voice mail and three-way calling, Dearman says. In the works are personal service management, allowing users to set calling rules for various types of calls, and a fully featured conferencing service.

What all this adds up to is a service provider with a new value proposition to end users that goes beyond simply saving a penny or two per minute, Dearman notes.

"People want personalized service," he says, adding that the SIP model transforms how such services can be sold. "Not everyone in the enterprise has to convert to the system, which is a hard thing to sell even if there's a lot of appeal to the service.

"In our case, a company can buy the service for just a handful of users and add more as it becomes better understood and more people want it," Dearman says. "It's a whole new approach to marketing communications that gets beyond the traditional distinctions between selling a consumer and an enterprise service."

As of October, Denwa had achieved twice its projected revenue for SIP-based service, and it expects to be on target to surpass the revenue rate of its traditional private line business by next March.

By the end of 2002 the company hopes to be at an annual revenue rate of $50 million on the SIP side, which is twice the current private line sales rate.

The ability to build IP-based value-added features without having a next-generation network in place is essential to the strategy of BroadSoft Inc., a pioneer in the use of SIP whose first customer for its multi-service delivery system went on line in March 2000.

BroadSoft's service system, which supports a variety of personal, group and network services, is designed to be deployed in either a greenfield softswitch environment or legacy circuit-switched network. However it's the latter that has been the biggest market for the product, says Scott Wharton, BroadSoft's vice president of marketing.

"We allow carriers to leverage their Class 5 switches by taking individual business lines off the switch and connecting them to our system," Wharton says. "Our system resides in the data center, which is connected to a gateway that interconnects with the Class 5."

Such an arrangement allows SPs to add new services at low costs and supports extension of Class 5 SS7 support into new territories where a full suite of services can be offered without requiring installation of another switch, Wharton notes.

Adding to the momentum for SIP-enabled IP communications is a decision by the mobile industry's 3G Partnership Program to make SIP the protocol for multimedia communications over packet switched mobile networks.

So far, notes RADVISION's Gilad, there hasn't been much action in SIP with respect to implementation of the precursor 2.5G networks and the web-based services that will be running over them in the year ahead, but there's likely to be a flood of development for true 3G once the 3G SIP architecture is fully defined.

"3G is such a big opportunity for everybody in the mobile space that everybody is interested in moving about as fast as humanly possible toward completion of the (3G SIP) extension," Gilad says. "We don't see much contentiousness there." 

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