Asterisk and the Evolution of Telephony

By Corey S. McFadden

During the last decade, open source software has significantly changed the world of servers and networks. The Linux operating system, for example, is used widely in data centers throughout the world as an alternative to Microsoft’s operating systems. This has enabled companies like Google to build successful businesses with lower cost structures than their competitors while achieving a previously unattainable level of flexibility.

Most areas of technology have been affected by this trend, with the notable exception of telephony. Long dominated by stubborn “my way” players at all levels – from the key system to the call center – pricing and support models reflected an outdated understanding of the way software and technology has evolved.

Thanks in large part to a software project called Asterisk, things have changed.

Like many products that have had an effect on the world, Asterisk – the Open Source PBX – would not have existed but for a confluence of factors. The fascination of a software genius with telephones, a start-up technical support company with the need for a phone system (but no budget for one), and a far-flung community of similarly minded software hobbyists connected via the Internet came together to do for voice communications what Linux was doing for computing.

In 1999, Asterisk began as a small project using an off-the-shelf computer, a voice card, and the Linux operating system. Developed by Mark Spencer – still the chief architect of the Asterisk platform – the first versions provided basic PBX functionality. As more people became involved with the project, features like music-on-hold, conferencing, IVR, and even ACD were added to the package.

At the same time, telephone carriers, handset manufacturers, and others began the large-scale adoption of SIP as a standard protocol for IP telephony. Up to this point, several other protocols – some with proprietary “enhancements” – had slowed the development and availability of VoIP handsets and services. It is hard to understate the importance of this development. Soon major manufacturers were producing cost-effective handsets compatible with Asterisk, and start-up telephone service providers (such as Vonage) were providing telephone service via the Internet, driving down the overall costs of telephony while pushing the boundaries of features and services.

Over the next several years, Asterisk evolved to a point where it was functionally comparable and even superior in many ways to other IP telephony systems like Cisco Call Manager. The only impediment to its adoption by a wider audience was the availability – or rather the lack of a formal commercial support structure. As a “community supported” product, solutions to problems were provided by email lists, chat rooms, and other nontraditional channels.

This did not deter technology vendors themselves from experimenting with and adopting Asterisk to meet their communications needs. From this group, sales of Asterisk systems to a wider audience began, and Asterisk continued its evolution from early-adopters and tinkerers to the mainstream.

By this time, Digium, the company that evolved from Mark Spencer’s original venture, was selling a variety of hardware boards for connecting PC server equipment to the outside world. Ranging from basic cards to connect POTS lines and analog stations to single- and multi-span PRI cards with carrier-grade echo cancellation, Digium’s offer of free installation support continued to expand the Asterisk market.

The next step in the evolution of Asterisk – and the final remaining barrier to its adoption by enterprise users – was the introduction of a formal channel partner support structure in early 2007. Digium now has hundreds of authorized resellers and dozens of select resellers (like Infradapt) throughout the world who are capable of providing turnkey system installation and long-term support.

Just how much of an effect has all this had on the wider telephony world? The Eastern Management Group, who has published quarterly reports on PBX sales for more than twenty-five years, announced in January that Open Source PBX sales represented a greater share of the North American market in 2008 than any single vendor. This is clearly a staggering figure. At 18 percent and with 2.85 million endpoints, this surpasses Nortel, Cisco, Avaya, NEC, and every other traditional player. Asterisk itself represents a disproportionate majority of this segment, at 85 percent of the Open Source market.

To understand exactly why Asterisk has moved so far so fast, we need to touch on another confluence of factors.

First, traditional players have long enjoyed high margins and lucrative maintenance contracts on their equipment. Their resistance to new approaches left them at a competitive disadvantage on many levels. Additionally, they disregarded the potential of products like Asterisk by instinctively employing “fear marketing” tactics – attacking the credibility of Open Source as a concept rather than a functional advantage or disadvantage of the solution.

Another factor driving this movement is the broader evolution of the PSTN from TDM to VoIP. At this time, nearly every major telephone company (including every former RBOC) has a SIP-based VoIP offering. This further clouds the future of non-software PBX systems.

Despite the resistance of established vendors to change, it has become inescapable. Following the lead of PBX vendors, enterprise contact center system providers have begun to adopt pricing structures that acknowledge market forces. Once a pricing “rule of thumb,” ten thousand dollars per station is no longer the case in the contact center world. Even major features like predictive dialing can be had for a small fraction of their former cost.

Last to the party (so to speak) have been traditional system vendors in insular vertical markets. Long ignoring market trends, they have clung to a traditional “hardware manufacturer” mentality – undervaluing the importance of software while maintaining a license and maintenance fee structure that exploits its customers as much as it serves them.

While there are certainly exceptions, many of these vendors’ software packages have been neglected to the point where what might have been “cutting-edge” in the mid-nineties is now just an example of structural limitations and work-arounds that seem quaint when placed side by side with a modern software application.

This year will undoubtedly mark a change in the way vendors approach Asterisk and IP telephony overall. Increasingly, vendors are producing solutions compatible with Asterisk. Whether welcome to incumbent vendors or not, Asterisk and the market forces it represents ultimately will help call center owners reduce their costs while also ushering in a new era of flexibility and freedom.

Corey S. McFadden is a managing partner of Infradapt, the adaptive infrastructure company, a Digium Select reseller and provider of technology and communications solutions for the TASterix hosting platform and product line. A veteran of several software and technology companies, Mr. McFadden’s experience with VoIP systems spans more than a decade. He can be contacted at 800-394-2301.

[From Connection Magazine Jul/Aug 2009]

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Wordsmith Peter DeHaan shares his passion for life and faith through words. Peter DeHaan’s website (http://peterdehaan.com) contains information and links to his blogs, newsletter, and social media pages.

Peter DeHaan is the president of Peter DeHaan Publishing, Inc., (http://peterdehaanpublishing.com) the publisher and editor of Connections Magazine and AnswerStat, and editor of Article Weekly.