Placing some Fonality on the PBX Business with Linux

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Response from Fonality CEO

Dana - you asked two questions at the closure of your blog and I have replied to them below:

> Once everything moves to the Internet,
> is a PBX really anything more than a very
> limited operating system?

The answer is: "sort of". You are correct that as the world adopts VoIP the impetus for CPE (client-premise equipment) diminishes. And, in this ideological world of perfect voice quality, the Internet becomes the server, and the WAN becomes the LAN. But (and this is a big but) business must be able to get perfect voice quality over the Internet before the premise-based PBX is ever obviated.

Skype and Vonage are interesting at a consumer, and even prosumer level, but they certainly don?t replicate the perfect TDM voice quality that is required by today?s enterprises. Great VoIP quality requires parallel QOS (Quality of Service) strategies across both the SMB LAN and the WAN. QOS shapes packets in such a manner that it prioritizes voice packets over data packets (so your call doesn?t get jittery when your co-worker is downloading an .mp3 song.) Also, to achieve perfect voice quality, segmentation of the LAN (physical and logical) is required.

All of these things require money! So when the small business is considering replacing their premise PBX with a hosted solution over the Internet they need to carefully weigh the cost of the requisite IT infrastructure spend vs. the actual dollars they will save on their long distance bill by switching to VoIP. When you sit down and do the math, unless you make *lots* of calls, the savings are just not there. Most business will find that the means don't justify the end.

Not to ramble, but since this is business, let?s talk bucks. When you do TCO or ROI math on your promised savings of going with a hosted PBX service, the numbers are not promising. Covad charges around $40 per employee per month. This is a perpetual fee. So if you have 40 employees, your monthly cost is $1,600 per month. This comes out to $19,200 for one year, and $115,200 for six years -- which is the average length of time that a small/medium-sized business keeps their phone system. $115,200 for a phone system for 40 employees! Fonality would have sold you the phone system AND the phones for $10-$20K.

Your second question:

> And as Asterisk evolves, doesn't it make
> Fonality unnecessary?

As Linux has evolved, has it made RedHat unnecessary? The answer is "no" -- long after dotcom, RedHat is alive and strong. Their valuation at today's close of the bell was $5.12B. In short, most successful open source technologies needs parental guidance. In essence, they need commercial companies around to ?productize? the technology, create a platform, offer reliable deployments, provide customer service, keep distribution manageable, and lastly offer enterprises a ?neck to choke?.

Let?s talk specifics: Fonality uses V1.09 of Asterisk that contains around 169,000 lines of code. Fonality, has built its own platform on top of Asterisk, and has authored 250,000 lines of code to do such. Why so much code? Well, easy to use software ?aint easy to make! Fonality has spent tons of resources on making our Asterisk-based product reliable, feature rich, easy to use, and always affordable. As Asterisk moves and evolves, we will continue to spend resources to make it even more feature-rich and even easier to use. To quote Mark Spencer, author of Asterisk, ?open source creates extreme capitalism.? He is right. It does keep you honest in the sense that you have to develop ahead of the free (as in freedom, not beer) market in order to add perpetual value. Red Hat has done this for a long time, and so shall we.

Keep on bloggin!

--
Chris Lyman
CEO & Janitor
Fonality, Inc.

Posted by: chris_lyman   Posted on: 01/30/06 You are currently: a Guest | Members login | Terms of Use

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