Source: http://www.canada.com/national/nationalpost/financialpost/story.html?id=a24189d0-d87a-4821-82f9-b25951c1c6a3
The Linux of the telecom world Put an Asterisk beside Mark Spencer, who created open-source software for telephone switches Mark Evans Financial Post Friday, May 06, 2005 Who is Mark Spencer and why should the large telecom equipment-makers be worried about him? Although little-known, Mr. Spencer has developed open-source software called Asterisk that lets businesses install telephone switches that are much less expensive than systems sold by suppliers such as Alcatel SA, Nortel Networks Corp. and Avaya Inc. The market for this equipment, known within the telecom industry as PBXs, is worth about US$13-billion a year. It is expected to climb to US$30-billion by 2009 as companies look to purchase new PBXs that take advantage of Internet-based networks. "I have no doubt Asterisk will change the face of telecom," Mr. Spencer said before appearing at a conference in Toronto recently. "The genie is out of the bottle and nothing will change that." In many respects, Mr. Spencer's software could do to the PBX market what Linus Torvalds did to the operating system market when he unleashed the first version of Linux in 1991. Linux is now the operating system for many computers that host Web sites. Mr. Spencer, 27, said the big difference between himself and Mr. Torvalds is he wants to make money from his technology. The PBX market is a large business because the technology plays a key role within phone systems. In addition to connecting office phones to the public network, they also route incoming calls to the right extension, provide recorded messages and connections to voice-mail, and dialling menus. For the most part, these are expensive proprietary systems that are difficult to modify without the supplier providing the service -- for a healthy fee, of course. Asterisk threatens to turn the market dynamics upside down. The software can be used by anyone at no cost. The caveat is any enhancements must be shared with other users. This is the power of the open-source community: Everyone works together to build a better mouse trap. Mr. Spencer developed Asterisk while a computer engineering student at Auburn University in Alabama. He started a company providing support for Linux users, and needed a phone system. Rather than buy one, he decided to build it from scratch. His company, Digium Inc., made its first sale in early 2002 as companies, looking to reduce costs, found it to be a compelling alternative. Asterisk, which can be installed in a personal computer using Linux, provides users with voice mail, caller ID, call transfer and call waiting, directory listings and an interactive voice response menu system. It also works with Internet telephony systems. Digium makes money from selling customized cards that can be installed in a PC; selling a version of the software that lets licensees keep any improvements for themselves; offering services and support; and licensing a business edition that is robust and fully featured. Susan Eustis, president with Wintergreen Research, said Digium is an excellent company but it has an enormous challenge pursuing customers who want feature-rich, reliable technology. "What they lack is the very strong feature set some of the other companies have," she said. "Even when Cisco came to the PBX market, they had a product with 300 features, and they were up against Avaya, which had 900 features." While Digium grows its business, there are rivals using Asterisk to develop their own PBX products. Markham, Ont.-based Sangoma Technologies Inc. is selling PBX cards based on Asterisk that it claims are better than the ones made by Digium. David Mandelstam, Sangoma's president and chief executive, said Sangoma's 20-year history in the networking and voice markets give it a competitive advantage. "We've been doing it longer and, quite frankly, we have a better product in many ways," he said. "There are two camps: one that says if you buy it from anyone other than Digium, you are killing Asterisk; the other one is people who want to buy the best they can get, and probably the best you can get is Sangoma." As for the major suppliers, they are experimenting with Asterisk in their R&D labs but no one has adopted the technology yet. Chris Umiastowski, an analyst with TD Newcrest, said the big players will have no choice but to embrace Asterisk sooner or later. "If it takes off the way some people expect it will, and you haven't embraced it, you might be dead and behind the curve." Terry Rybczynski, director of strategic enterprise technologies with Nortel, said it is too early to tell how well open-source IP-PBX technology will do. "It's not a slam dunk by any means," he said. "There could be a niche market for it. My opinion is open source will be something picked up and integrated into other systems that customers will buy. This is an interesting and practical scenario." -- * Simon P. Ditner / ON-Asterisk Mailing List / http://uc.org/asterisk *
