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SIP is short for Session Initiated Protocol, or Session Initiation Protocol. In simple terms, SIP is a protocol that will let users receive messages of all types, including instant messages, voice and SMS, to whichever communications device they are using, anywhere in the world. This is done by assigning individuals their own IP address so that all messages can be routed to them, regardless of what phone, PC or PDA they are using.
IP (Internet protocol) addresses are the numerical codes that are used on the Internet, and on other so-called IP networks, to direct users to Web sites and also to direct e-mail to the proper mail box. Increasingly however IP networks are also used to carry voice as well.
SIP's basic architecture is client/server in nature and the format was established in 1999 by the Internet Engineering Steering Group (IESG). It is an open standard and has been designed to be a general-purpose protocol.
According to Anlaysys, the current value of the SIP market is effectively nothing, but by 2007 it will be as high as EUR2.9 billion, driven in part by SIP based instant messaging. "We believe SIP-based instant messaging on the fixed Internet could take off fast and create a significant market for SMS-SIP gateways, which allow seamless messaging across fixed and mobile networks," says Margaret Hopkins, author of the Analysys report.
"SIP is a disruptive technology that has the potential to fundamentally change the way telecoms services are delivered -- great news for mobile operators, ASPs and ISPs," she adds.
The standard already has widespread industry support, and had already been incorporated into 3G mobile standards, and Microsoft has placed a SIP client in Windows XP. Analysys estimates that by 2007 there will be over 200 million Western European SIP clients on desktops, in mobile phones and in PDAs, driven mainly by instant messaging.
"The sheer simplicity and flexibility of SIP makes it particularly easy for service developers such as Hotsip and Avaya to work with, and as a result we believe SIP will form the basis of many low-cost value-added services provided over the public switched telephone network and Internet protocol infrastructure," adds Hopkins. But in the short term the dominant revenue stream will come from linking fixed and mobile SIP to SMS messaging, she claims.
The Analysys report also forecasts that revenues from SIP-SMS gateways (available from next year) will be worth over EUR650 million by 2004, and will then peak at EUR2.3 billion in 2006, after which 2.5G and 3G phones will be dominating the market and SMS as a whole will begin to tail off.
"Mobile operators have the strongest case for deploying SIP and these gateways provide a new source of additional SMS revenues from 2G phones to fixed SIP terminals," continues Hopkins.
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