DESPITE A HOST of technical and regulatory challenges, a rising tide of vendors is working to establish SIP (Session Initiation Protocol) as the de facto signaling technology for packet-based voice communications.

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Cisco Systems, Alcatel, and Nortel Networks, among others, have released SIP-based products and plan to offer wider support for the nascent protocol, a move some believe will assist financially strapped telco and services providers develop new services.

"We've been working on SIP products for two plus years," said Tim McCracken, a product manager at Cisco Systems' voice technology group, who believes the technology holds significant promise.

A number of San Jose, Calif.-based Cisco's voice products support SIP, including the company's voice gateway product, Cisco 7200 Voice Gateway; its line of IP phones; and its call-control software package that serves as a proxy server for receiving and redirecting SIP calls.

Already deployed in instant messaging, VoIP (voice over IP), and other telephony applications, SIP was initially developed to assist in the multicast transmission of multimedia and streamed applications.

SIP is a signaling protocol that establishes a session (an Internet phone call) between two users over the Internet. Once a connection between two users is established, SIP allows bidirectional data flow, enabling two users to talk to each other. Using e-mail style addressing, SIP only negotiates the connection. Other protocols take over to pass the actual data between the two users.

Paris-based Alcatel is also throwing its weight behind SIP with support for the protocol in its service-provider-focused SoftSwitch 5020.

According to Sudeep Gupta, senior manager of next-generation voice networks product marketing at Alcatel, SIP represents that revenue opportunity so many carriers are desperate to find.

"SIP is the future of telephony," Gupta said. "SIP provides avenues to build new services and to do so cost-effectively."

In addition to instant messaging, Gupta sees video conferencing as a likely application that carriers can offer as a service to enterprises.

Jim Thomas, senior manager of SIP services marketing at Ottawa-based Nortel Networks, said Microsoft's recently announced support for SIP is a good sign of broad adoption to come. Microsoft plans to build support for the protocol into its Messenger and Exchange platforms, he said.

VoIP and instant messaging will be initial points of adoption, in addition to better e-mail integration and a Centrex-like replacement, Thomas said.

Centrex is a central office exchange service from local telephone companies where up-to-date phone facilities at the phone company's central office are offered to businesses so that they don't need to purchase their own facilities.

But it's the instant messaging application that is garnering the most interest from vendors and analysts.

Support for basic text messaging will be boosted by the capability of transmitting video and even voice communications directly between two users. SIP will likely be the mechanism that enables this type of connection, effectively replacing H.323, a current standard also used to initiate sessions.

SIP's ability to extend VoIP applications is in part due to the fact SIP packets look a lot like HTML, thus making them easy to read.

"SIP is flexible and simple and able to run on top of other protocols like TCP and UDP [User Datagram Protocol]," said Dave Passmore, an analyst at Burton Group during its Catalyst Conference in San Francisco.

In addition SIP uses e-mail style addressing and uses the same MIME functions as e-mail attachments. Passmore says this, coupled with the ease of management, makes SIP a superior alternative to H.323, a competing signaling protocol.

"H.323 is complex and uses a lot of code," Passmore said. "It is not developer friendly and has a complex handshaking process."

Technology vendors and analysts are not the only ones singing the praises of SIP. A handful of service providers, including Talking Nets and deltathree, are already using SIP in their service offerings.

deltathree offers a hosted service that employs SIP. Working with customers such as EarthLink, which resells deltathree's service, deltathree allows end-users to download its software client that allows them to make phone calls from their PC to any phone in the world.

An additional product from deltathree also permits end-users to make a phone call from their PC but to do so without having to download additional software. This is accomplished by using only the Microsoft instant messaging client, MSN Internet Messenger, which comes bundled with Windows.

Despite all the positive projections, a number of obstacles stand in the way of mass availability of SIP-based services.

One of the most glaring issues is SIP's use of e-mail-style addressing. This makes it next to impossible to initiate a call from the 12-button phones we have today.

As a result, companies developing the SIP standard must figure out a way to make SIP work with numerical phone numbers.

Another adoption challenge borne by the SIP addressing issue is the implication it has for existing communications products. In order to take advantage of SIP, the industry will be asking users to replace existing phones with a PC phone, either stationary or portable.

Another major obstacle is security. If SIP is expected to permit two users to connect to one another regardless of location, it must cooperate with different firewalls. Unlike other technologies that define a single port for use, SIP can use hundreds of network ports.

Despite other remaining obstacles such as government regulations, vendors will continue to build SIP capabilities into voice product lines, Passmore said.

In the near future only small service providers with less legacy equipment will be able to offer SIP services. But as the protocol matures and the issues of security are addressed, Passmore believes major vendors will start to make the move to SIP. "Next year we'll see ILECs [incumbent local exchange carriers] floating RFPs [requests for proposal] for SIP-based IP Centrex gear," said Passmore. "SIP will merge as a new model for telephony."