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News and analysis of developments in the enterprise communication industry and market with primary focus on Europe.

The author aims to tap into ideas, insights and thoughts of the readers to get varied perspectives.

Views expressed in this blog are solely the author's opinion and in no way reflect those of his employer.

Monday, September 18, 2006

Open source in telecom

Like in the operating systems, open source has come to telecoms. Spearheading the movement are two communities:

a) Asterisk
b) SIP Foundry

The community is quite extensive and geographically well spread. However the community is very restricted to the development of technical know-how. To add marketing and sales to these novel projects, four companies have been set up.

1. Digium: Founded in 1999, this company uses Asterisk as the base platform to develop enhanced suites to meet business needs
2. Pingtel: The base code of its products come out of SIP foundry. Pingtel focusses more on the support element to gain traction.
3. Fonality: Based on Asterisk, the company offers PBXtra- an advanced version of PBX using Asterisk base code. The value proposition of Fonality is around designing the communication architecture to offer best solution thus maximising customer value.
4. Hugh Symons Telecom: Recently launched SIPtrix, a Asterisk based solution developed by the distributors in-house technical consultants.

The big question is:

How successful will the open source players be?

Some analyst firms predict them to gain a market share of 1-2% in Europe by 2008. That effectively translates to anything between 21000-35000 lines depending on the market size estimates from different analyst firms. Most research firms agree that the initial traction for open-source solutions will be in the SMB space due to their lucrative pricing and close relationships/personal rapport that some of them enjoy in this segment.

However once the proponents of open-source demonstrate their products

a) reliability
b) scalability
c) security
d) features and functionalities
e) vendor support on customer lifetime management

that are close to acceptable standards, they will be able to negotiate a larger pie in the carrier market.

For example: Leading analyst firms have forecasted that by 2010, close to 15% of enterprise telephony will be hosted. This translates to approximately 3.8-3.9 million lines in Europe depending on whose market size estimate one refers to.

This is a significant market that open source vendors are likely to look into.

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