04/08/11

By Tristan Barnum, product line director, Business Phone Systems, Digium

When Mark Spencer, the founder of Digium and the creator of the Asterisk open source communications framework, first conceived of a PBX written entirely in software he was attempting to avoid the closed-market expense of a business phone system. He couldn’t have foreseen that Asterisk and its open source brethren like OpenSIPS/Kamailio, FreeSWITCH and Yate would open the competitive door to a wave of new and unique cloud services that fly in the face of conventional telecommunications business models. By “de-proprietising” the telecommunications business and embracing the growth of both advanced IP networking services and open source development models, these technologies are redefining what is possible in the realm of business telecommunications.

Historically, business telecommunications has been a highly exclusive club of well-financed service providers who have been highly dependent upon business models that are pegged to over-subscription, product bundling and oligopolistic market control. Telecommunications infrastructure has been a world of very expensive, highly proprietary equipment and telecom applications such as voicemail, conferencing, three-way calling and caller ID have been developed exclusively within the doors of the large service providers who intended to put them in the market. The nearly simultaneous advent of open telecommunications software platforms (and their expansive feature-sets), server virtualisation and cloud network architectures has created a unique moment in time for the telecommunications industry and one could argue that this business will never be the same.

A scant five years ago, a business shopping for telecommunications products or services would have only a handful of options. Analog lines or a PRI connected to a proprietary PBX and either a best efforts Internet connection such as DSL or one or more T1s of Internet access. Today, a business with an Internet connection of acceptable speed and quality can select from a wide array of cloud-based telecommunications services sized exactly to their needs. These services bring new capabilities at an affordable price and are powered in no small part by open source technologies deployed in the cloud by an army of upstart service providers exploiting these new technological opportunities. The result: an “unbundling” of telecommunications services that provides the consumer choice, flexibility and functionality not available from the conventional telecommunications companies.

The combination of the cloud and open source communications platforms has also birthed an exciting new application marketplace where creative new business models are being developed on a near daily basis. Companies that enable the underlying service of these applications (think ifbyphone or twilio) are acting as cloud “facilitators” for a new generation of applications being developed by both new business models and existing businesses that are developing their own telephony applications. None of these things were attainable by the average business five years ago and we have open telecom frameworks in the cloud to thank.

Where consumers used to be lured to telecom companies by bundled product offerings and the promise of "savings" for buying everything in one place, the cloud now allows them the ability to save substantial amounts of money each month by purchasing their services over the Internet on an ad-hoc basis. Toll-based products such as long distance and international calling have been disrupted by cloud services like Skype and Google Voice. As this market transformation has only just begun and the ways in which it will impact conventional telecommunications are not completely clear, it is safe to assume that cloud services will gain market share from the incumbents as the result of their capability, flexibility and affordability. The only uncertainty is how and when the conventional telecoms will respond.