The recently announced relationship between Minerva Networks Inc. and Nortel Networks Ltd. could be the smaller company's entrée into large telco accounts and Nortel's chance to interlock one chosen middleware vendor with its IMS offering.

At this week's TelecomNEXT conference, Minerva and Nortel announced they have begun integrating Nortel's SIP and IMS capabilities with Minerva’s iTVManager middleware product. ”We’re writing code, they’re writing code, and we’re working together to make sure they work well together,” says Minerva marketing VP Matt Cuson. (See Nortel, Minerva Team on IPTV.)

The relationship is not exclusive in either direction and has not been written in a contract, the companies say. But Nortel salespeople are out selling the Minerva middleware platform alongside Nortel's IMS. "As of today we have one official middleware provider which is Minerva,” confirms Ken Couch, Nortel's director of marketing for IPTV and broadband networks.

Other pieces of Nortel's IPTV "ecosystem" include Amino Communications Ltd. and Tilgin AB (formerly i3 micro) set-top boxes; Kasenna Inc. VOD servers; Terayon Communication Systems Inc. grooming and ad insertion gear; and Irdeto Access B.V. conditional access technology, Couch says.

With less than 60 employees, Minerva has made its living thus far selling to IOCs. But the company says it's now showing up with Nortel at Tier 1 and Tier 2 carriers.

“The bigger guys are very much into working with integrators,” Cuson says of Tier 1 and Tier 2 carriers. “That’s how they’ve traditionally worked in the past and just because it's IPTV doesn’t mean they’re going to do something different.” (See Will IPTV Bloom in 2006?.)

Nortel's Couch says his company had previously been working with three middleware platforms -- Minerva, Myrio Corp. , and Orca Interactive Ltd. -- before "focusing in" on Minerva. Myrio might be the strongest of the three, says Heavy Reading analyst Rick Thompson. "I think, quite frankly, out of those three, Myrio is the only back-end middleware player that has a significant chance of competing with Microsoft Corp. (Nasdaq: MSFT)," he says. (See Myrio's Quiet Quandary and Microsoft Wins IPTV Deal at DT.)

Thompson believes Nortel's choice was influenced by the fact that Minerva's competitors have already found dance partners. Lucent Technologies Inc. (NYSE: LU) has teamed up with Orca, while Alcatel (NYSE: ALA; Paris: CGEP:PA) picked Microsoft and Siemens AG (NYSE: SI; Frankfurt: SIE) chose Myrio -- all part of a trend where large integrators have glommed onto smaller IPTV middleware partners. (See Expect More IPTV M&A and Siemens Boasts IPTV Success.)

Among the top carriers in Minerva's sights is Verizon Communications Inc. (NYSE: VZ), which has been testing Nortel's IMS technology in its labs since at least December. (See Verizon Tests Nortel's IMS.)

Minerva's Cuson says Verizon has begun looking more closely at the IPTV aspect of its IMS plans. “For the last two months we’ve been more involved," Cuson says. “The goal is to get a lab system in there and get them playing with it and try to get them to commit to a trial.”

Cuson says Verizon has always intended to select two IPTV platforms as part of its normal vendor selection procedure. “Microsoft was one, so the question is who is number two. We’re just trying to make sure we’re number two,” Cuson says.

Verizon is currently selling a cable-like video service as part of its FiOS rollout. The carrier chose that approach so that it could roll out quickly using older, proven technology. But analysts say Verizon probably will move to IPTV later on because of the decidedly better consumer experience of an IP-based offering.

— Mark Sullivan, Reporter, Light Reading