Digium and snom are two companies that have been in the VOIP market for a long time and both are fierce proponents of open source and open standards. This blog has covered them here and here. I spent a little time with both companies at the show to find out how things are going in lately…

Digium

Open source FTW

Angie Reed, Product Manager, and Mark Amick, Director of Product Management, were very excited to share with me some latest developments in Asterisk, the open source telephony project primarily known for the IP PBX. Here were the highlights:

• While most companies are now starting to wake up to the world of unified communications, let’s not forget that Asterisk should be considered a UC pioneer, capable of common UC features even 4-5 years ago
• Lots of growth in Europe where many governments and municipalities have declared “open source only” in its IT systems
• Often used in disaster or crisis situations (e.g. Haiti earthquake)
• Developer community continues to flourish: 8,000 code commits in 2010
• Asterisk Exchange, an online market place for Asterisk products and services, continues to grow
• Version 1.10 by AstriCon 2011
• TCO study Switchvox vs. Other IP-PBX finds over 60% savings on initial investment and 80% on total cost
• Asterisk SCF (Scalable Communications Framework) will give Asterisk even greater capabilities and capacities; beta by September 2011; version 1.0 by end of 2011

snom

snom knows VOIP

COO Mike Storella graciously took some time to demo snom IP phones (there were a lot!) at the booth. I also found out that the company makes a conference speaker phone to rival Polycom (HD voice and all). If you’re a fan of a multi-platform (Linux, Windows, Mac) IP-PBX then you owe it to yourself to stop by the booth for a snom ONE Free CD. Now due to customer demand, snom makes an actual server — snom ONE plus — to house its software. All snom products are sold through distributors and VARs, however. The company has grown and continues to grow in markets worldwide. (I actually saw quite a few snom IP phones being used at other booths on the show floor.)

Just a few days ago Digium proudly released Asterisk 1.8 — over 200 enhancements, security updates, and new features. This version will even work with Google Voice and calendar integration with Outlook, CalDAV, and iCalendar. And that’s in addition to the fancy PBX-y stuff it already does like caller ID, call waiting, hold, transfer, etc.

More reason for any small/medium business to evaluate Asterisk’s potential usefulness in team communications and collaboration.

Also, AstriCon starts today in the nation’s capitol. Too bad I cannot be there to bask for three days in open source nirvana, but if you’re in attendance and feeling generous, why not give us a glimpse by leaving a comment below?

This conference is somewhat refreshing in the telecom industry because you won’t see the usual suspects there — no Cisco, no Avaya, no Siemens, no Microsoft, no Aspect, no Alcatel-Lucent, … There, I just gave you a few good reasons to attend AstriCon next year!

I know what you’re saying: Adhear-what?

AdhearsionCon. Now open for registration.

Developing telephony apps these days has never been easier. Programmers have a variety of languages to choose from, several frameworks and APIs to refer to, and none of them cost much (or at all). Better yet, the inevitable convergence of telephony and Web has brought us innovative mashups and, in my view more importantly, a new generation of telephony and voice app developers. These developers are well-versed in Perl, PHP, Python, Ruby, etc., savvy with third-party APIs, and immensely comfortable with Web technologies.

You may have heard of Twilio, Tropo, Teleku, QuickFuse, and the like. You definitely know about Skype, Asterisk, and Google Voice. And perhaps a bit curious about SIP. Not many folks have heard of Adhearsion (myself included), but it’s definitely something worth digging into.

For starters, Adhearsion is a framework written in Ruby to help developers code voice apps for the open source PBX, Asterisk. Why Ruby? Why Asterisk? (Check the FAQ, jack.)

It’s also open sourced and backed by one of the biggest names in cloud-based voice app development, Voxeo.

I would encourage any developer — Web or voice or anything else — to check it out, especially if you’re in the Bay Area. After all, I believe the world is a better place with you knowing how to bend open source telephony to your will.

On Monday at VoiceCon I attended an afternoon session about the adoption of open source PBX in the enterprise. The session was presented and led by John Malone, CEO of the Eastern Management Group. Steve Sokol, Director of Product Marketing at Digium, and Jeronimo Romero, Managing Partner at EUS Networks, were panelists.

Malone’s team did a study on open source PBX market share and found that it has an impressive foothold:

Open Source PBXs accounted for 18 percent of the 15.88 million line market for business telephone systems in North America in 2008, based on a new Eastern Management Group study “2009 Open Source PBX Market Forecast”. This represents a 40 percent growth of Open Source PBXs in the last year. Open Source now accounts for a larger slice of the market than any single manufacturer of PBXs, and eight percent more than Nortel, the largest traditional vendor.

Additionally, open source PBX usage is found in all sectors and sizes of businesses, debunking the myth that it’s often the high-tech firms that embrace open source PBX. And the primary driving force? Value, of course. No licensing costs, no hidden fees, no upgrade purchases. Anyone can go download a full-featured PBX like Asterisk today and have it up and running in no time, albeit with very basic setup.

If you’re an open source fan like I am, then you’re probably very excited about the seemingly bright future ahead for open source PBXs. However, Malone predicts open source telephony gaining no more than 33% of the market based on his research into Linux’s history. We’re all aware of Linux’s catapult into stardom and receiving attention from the likes of IBM and Microsoft. Yet today Linux’s market share appears to have plateaued. According to Malone, there are just some companies that won’t be receptive to open source software and there’s nothing to be done.

Still, it’s worth noting that Digium, a company with less than 200 employees, has created a telephony project in just a few years to capture nearly 20% of the market and turning up the heat on Big Telephony. However, one major advantage for Big Telephony is its well-established VARs and integrators — these are the guys who are driving the sales of Big Telephony PBXs.

The road ahead for open source PBX will be filled with potholes and bumps. Steve Sokol’s job to promote Asterisk and other open source PBXs remains challenging. But if he can convince some folks from the flourishing Asterisk community to take a good look at the commercial opportunities in becoming a VAR or systems integrator (like Jeronimo Romero), then there may be a chance of smashing Malone’s prediction of 33%.

The telephony industry used to be very tightly guarded and highly proprietary. Vendor lock-in was a way of business, that’s why you’ll find companies that have decades of relationship with a particular PBX vendor, and market penetration was quite difficult. When SIP and VoiceXML were in their infancy, smaller, agile companies saw the opportunity to transform the industry by offering products that were SIP and VXML compliant. Effectively these companies had an advantage to distinguish themselves from the rest of Big Telephony: We are first-to-market with the latest standards-compliant products. And being small the logical strategy was to release their products as open source in hopes of gaining market share quickly to maintain the advantage.

Asterisk, A (Lone?) Success Story

Unfortunately, there aren’t many successful open source telephony stories. Digium by far is the most notable. Huntsville, Alabama-based Digium, having roots in the Linux business, came out with the highly successful Asterisk open source PBX. One study done in January 2009 found Asterisk to have 18% of the North American PBX market, a statistic that any open source proponent should be proud of in light of the established competition from the likes of Avaya, Nortel, and Cisco.

Just six years ago in an interview with Rich Tehrani of TMCnet, Digium was already enjoying great success and beating Big Telephony:

…

RT: Describe the company’s growth.
Greg Vance (Digium): We’re growing very fast, in fact we grew 300 percent over this time last year.

…

RT: Are there any other serious open source PBX companies that keep you awake at night?
GV: NO.

…

RT: What has been the reaction of Avaya and Cisco to all of this talk of an open-source PBX?
GV: We haven’t had any reaction from them. I think we are under their radar at the moment. However, the users are very enthusiastic. We have many who want to eliminate their Cisco equipment or interoperate with Asterisk. When they look at the price of these systems versus Asterisk, it’s a no brainer. We know that both Avaya and Cisco have Asterisk running in their lab, but we have not had contact with either company in a formal way.

…

But with customers demanding more open technologies and lower TCO, the traditional telephony vendors also had to innovate and adopt open standards in their product portfolio. That’s why today all of them offer SIP and VXML compliant products, too. The evolution was inevitable and crucial for the company’s survival in today’s Internet-centric and open access world. And it was an open source company which paved the way…

Threat to Open Source Companies

With Big Telephony embracing open standards, a threat looms for the smaller players, especially those who have open sourced their products. Granted, many of these open source companies also implement a “freemium” sales model where customers can get additional product features and/or services by paying a fee, but it’s still a tough sell especially to large corporations when Big Telephony can offer the same features with the backing of hundreds (if not thousands) of 24x7x365 tech support resources and other incentives.

Not only that, but Big Telephony has the funds to acquire technologies it doesn’t have in order to quickly bring into its fold new products and services to ride the market trend.

For example, Microsoft acquired Tellme to get a better speech recognition engine. Nortel got Periphonics for the voice platform solution. Cisco bought Audium for the voice application development tools. Genesys (an Alcatel-Lucent company) scooped up Telera and VoiceGenie for their voice platform and tools.

In other words, Big Telephony can throw money to get on the open standards bandwagon. Smaller companies, on the other hand, have to build their own bandwagon with blood and sweat.

Even Digium realizes it cannot solely depend on selling Asterisk. It also sells training, support, hardware (interface cards and Asterisk Appliances), and software (add-ons, codecs, etc.). Additionally, it sponsors trade show events like AstriCon, which is important because a good defense against this threat from Big Telephony is to grow your community of not just customers, but developers and other open source evangelists. I believe that the reason Asterisk continues to garner attention and fans is not only because of a good product, but because they are attentive to the user and developer community. Digium provides some resources to support Asterisk and also listens to what the community has to say.

Kansas City, Missouri-based OpenMethods is the developer of the OpenVXML service creation environment (SCE) and main contributor to the open source Eclipse Voice Tools Project (VTP). It is the only open source, platform independent voice app SCE that I know of. Its product is available freely for download and interested VTP developers can easily create plug-ins and enhancements. The OpenVXML runtime engine can communicate to the major VXML-compliant voice platforms from Genesys, Avaya, VoiceObjects, etc. — a great SCE tool to deploy apps across multiple voice platforms in an enterprise. However, much like Digium it too cannot simply survive by just offering a flagship product. OpenMethods also offers professional services in app development and Genesys CTI consulting, as well as a close partnership with RightNow Technologies to offer the only Gvalidated Adapter for RightNow CRM.

Just the other day somebody alerted me of an open source CTI solution, WYBECOM’s TALK. It’s something I’ve never even heard of, and I’ve been in this business for ten years. Obviously, Asterisk being the #1 open source PBX also has its own CTI solution, but that didn’t stop WYBECOM from coming up with their own. Another testament to how open source offers several alternatives and options for users and developers.

David vs. Goliath

At times the future may seem gloomy for open source telephony and tools companies, but I take comfort knowing that the Internet is in itself a sprawling open network. As long as the Internet exists, there will be daring open source entrepreneurs and flourishing open source communities. The Internet is also about interoperability and open standards — something that Big Telephony has started to understand but still hasn’t culturally adjusted well to it yet. It is still in the mindset of selling hardware and licenses and locking in customers.

Open source players in this business need to build a robust community, relevant partnerships, and innovative features to fend off the Big Telephony armada. Being smaller means having the advantage of flexibility and agility, and support of loyal open source fans. However, if they lose focus and stray too far from their open source roots, then they abandon the only thing that distinguishes them from Big Telephony. When that happens it will be David vs. Goliath, except David has no sling and stones.

Disclosure: I was an employee of OpenMethods.

Cisco is betting on high-definition telepresence to be as common as Skype and iChat videoconferencing by giving away its Telepresence Interoperability Protocol (TIP) license to third parties. The company hopes to plant the seeds to see a flourishing telepresence product market which operates on its protocol.

The move is not surprising as the trend has been for companies to “open up” or to adopt open standards. For instance, in March 2009 Skype released its wideband audio codec SILK for free to third party developers.

Once a company has made such commitments to offer such free licenses, the biggest hurdle has always been getting others to adopt the technology. Less than a handful of companies have signed up as TIP licensees so far. It remains to be seen how hard Cisco will push or incentivize others to jump on the TIP bandwagon.

In comparison, Skype has gained traction in the open source telephony community. Asterisk now supports Skype calls, albeit without the SILK codec (yet). But more importantly, Skype decided to submit SILK to the Internet Engineering Task Force (IETF), the first step to applying the codec to become an Internet standard.

Right now Cisco is going about TIP without the blessing of any standards organization. The FAQ is vague on how it intends to tackle this potential problem. Could this deter users in fear of vendor lock-in in the future?

Cisco is making a positive move with this offering, and it could be a win-win situation for everyone. However, it seems there are still some details to be ironed out, but some customers may overlook that simply because Cisco is the dominant market player.