Larry Ellison has his super yacht, Bill Gates has his humanitarian fund. For Mark Spencer, the symbol of his success is a hot tub.

It may not be the most expensive trophy, but Spencer’s achievement may well prove to be just as revolutionary - turning the world of enterprise telephony on its head.

The tub, now installed at his Huntsville, Alabama home, was bought for him as a token of gratitude by 150 software developers who work on the platform he initiated - Asterisk, the Linux-based IP private branch exchange (PBX) software.

Spencer started work on Asterisk when he was running a Linux support company. “I was still a college student,” he says. “I wanted a phone system and I wasn’t going to buy one for several thousand dollars.”

In 2001, he decided that the open source PBX business would be a better bet than the support game, and decided to refocus the business around it.

His company is now called Digium. It provides Asterisk-based PBXes and telephone hardware, and sponsors the Asterisk open source project. He is competing in a world of office telephone hardware dominated by the big telephone equipment players, such as Nortel, Alcatel and Siemens.

Reliability is key

Running free software on a generic server is obviously much cheaper than buying dedicated PBXs, which typically sell at high margins.

However, in the telephone business, reliability is key. The traditional PBX companies have decades of experience of making telephone systems, and many companies are prepared to pay a premium for the reassurance that their systems won’t fail.

However, the shift towards voice over IP is altering the traditional balance of power in the PBX market. IP PBXs are increasingly becoming the default standard.

This has allowed new players into the market, notably Cisco. And it may open the door for the open source movement.

There are various contenders in the marketplace, such as Pingtel, but Asterisk has established itself as the number one contender. It has taken off quickest amongst companies which are already comfortable with Linux.

“The direct customers tend to be people that are fully Linux savvy,” Spencer says. “If someone knows how to configure an apache web server that is the level of sophistication they need to be able to configure Asterisk.”

Some analysts argue for companies without Linux skills in-house, the costs of buying support on the open market may outweigh the up-front savings on licensing fees – an argument which rages about other open source systems too.

“The difference is you have a lot more capability to shop around," says Spencer. "Anybody can do the service, not just the original vendor. That is what kills a lot of companies that go with the big vendors.”

He has known companies replace a proprietary PBX with Asterisk just to avoid the extra cost, Spencer says.

However, cost isn’t the only reason why a company might wish to switch to Asterisk, he says. It’s an open source system, so anyone has access to the code and can do what they want with it.

“If you bought a PBX from a major vendor, and you wanted the features to behave differently, you don’t have the ability to make that change,” says Spencer.

“The vendor is the only company that can change that. With Asterisk the customer is in control. That is a very compelling argument.”

As voice over IP takes off, companies will increasingly look to use the PBX as more than just a thing to link their telephones to the public call network. It becomes a platform for building voice telephony into other applications, from email to customer relationship management software.

The more open the platform is, the more ISVs and companies themselves can develop on top of it.

Some of the big PBX vendors have realised which way the wind is blowing. Avaya, for example, is moving towards a more open platform in the next few years.

Community platform

It’s still early days for Asterisk. It has won some impressive supporters, including Wall Street Electronica, a US brokerage firm, and the local government of the city of Pforzheim, Germany.

Of course, Asterisk is not just a platform for business. It could be a useful platform for a community ISP to add telephone access to its service portfolio. South Witham Broadband in Lincolnshire is doing exactly this.

Jon 'Maddog' Hall, president of Linux International, has predicted that open source telephony will be bigger than Linux.

Other watchers are more measured, but still on the lookout for big things.

“We are watching it, but I am a little bit sceptical,” says Steve Blood, research vice president at Gartner. “However, if it really is feasible to do VoIP for $10 (£5) a user, which is a twentieth of licensing revenues from a conventional PBX vendor, then it could massively disrupt this market.”

Spencer calls his company “the smallest company in telecoms that matters.” It certainly does matter – but Asterisk may not remain small for long. ®

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