LONDON – VON Europe 2004 – Up-and-coming Swedish SIP startup Hotsip AB today announced an OEM deal with LM Ericsson (Nasdaq: ERICY) that will see its presence server, multimedia engine, and PC client integrated with the giant vendor's softswitch (see Ericsson to OEM Hotsip).

Hotsip CEO Kenneth Gustafsson says he can't predict how much business this will bring in, or from which parts of the world, but he's confident it will help the startup add to its current customer base of Scandinavian incumbent TeliaSonera AB (Nasdaq: TLSN) and Japanese integrator Bell Net Corp., which is also an investor (see TeliaSonera Picks Hotsip for VOIP, Hotsip Secures €5M Funding, and Bell Net Invests €3M in Hotsip).

Gustafsson was talking from his headquarters in Sweden, but his company is one of the more than 40 exhibitors at this year's VON Europe event in London.

Hotsip has just 43 on staff, mostly in R&D, and the arrangement with Ericsson, the culmination of a two-year relationship, is the firm's first major OEM deal. "This is very important for us," says the CEO. “We couldn't sell to the Tier 1 carriers by ourselves. We are too small. Ericsson has the credibility and support organization that the large carriers look for.”

Not only does Ericsson have the credibility, it also has a new relationship with Cisco Systems Inc. (Nasdaq: CSCO) that includes its softswitch (see Cisco, Ericsson Join Forces); and it’s been doing OK by itself, according to analysts at Dittberner Associates Inc. (see Ericsson, Nortel Lead VOIP). The new OEM deal includes Hotsip's Presence Server, its Multimedia Communications Engine (M2CE) that was launched earlier this year, and its Active Contacts PC Client (see Hotsip Launches SIP Platform).

Ericsson says the relationship adds depth to the functions of its Engine Multimedia softswitch, which delivers services such as IP centrex, IP telephony, and video telephony.

Of the multitude of emerging vendors with SIP-based solutions, Hotsip is one of the key companies to watch, according to a Light Reading Insider (formerly Boardwatch Insider) report from late last year (see Boardwatch Insider Surveys SIP). The Swedish company was one of a handful of new SIP vendors to receive the top five-star rating.

The OEM relationship comes as SIP services look set to play an increasing role in carrier and enterprise strategies (see Heavy Reading Sees Money in SIP).

— Ray Le Maistre, International Editor, Boardwatch