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Is the end of open source VoIP in sight? Five reasons why it's on the way out

By Brendan Ritchie, Thu 10 Aug 2017
FYI, this story is more than a year old

Clients are increasingly expecting more from their phone systems, and this complexity is ushering in the end of open source solutions (OSS).

Phone calls in our organisation integrate with our ticketing and call flow systems, and our clients integrate our unified communications system with Salesforce, Zendesk and Microsoft applications.

Gone are the days where voice mail to email was a fancy extra and requirements were limited to call forwards and time of day diverts.

I once worked for an ISP that acquired a small voice provider that ran all of its hosted PBX clients on an Asterisk platform. That experience ensured that when given the chance to be involved in selecting the new PBX solution in my new role at Lightwire, open source solutions were bottom of the list.

Open source has had its day in the telco space, and here’s why:

  • Features require in-house development: The market moves quickly; new 3rd party apps that clients require integration capability for are emerging all the time. Open source solutions require telcos to anticipate market movements, develop accordingly, test in house and release regular updates.
  • Development overhead:  Good developers are hard to find, and aren’t cheap. The return on in-house development is not a short term play either. Telcos need to be sure of outcomes and be well funded to keep pace.
  • In house guru: Invariably, smaller telcos end up having a unique individual who understands the platform they have built, but to everyone else in the business it makes little sense. This leaves businesses exposed. Employing additional staff to learn the in-house system can be seen as a threat and the success of new staff largely relies on the quality of training offered by the guru.
  • Documentation: A solid wiki helps, but often doesn’t enable a shadow resource to administer the platform effectively. I have found through the years that wiki detail often becomes out of date and unhelpful. 
  • Support: Open source communities are not a replacement for vendor backed support. Open source options do often have a professional support option, but rarely do they have support staff operating in the required time zone.

In contrast, vendor backed options have:

  • New feature releases: Businesses that have unified communications or PBX solutions as their core business offering are going to do a much better job of keeping pace with market expectations and feature improvements (web conferencing, B2B integration, chat features) than a telco with multiple product streams will.
  • Vendor backed support with commitments to response and restoration times, which in turn can act as the basis for a telco's customer facing service level commitments.
  • User manuals: These provide thorough and up to date training material for each new platform release and can form the basis of client training.
Choosing the right vendor

Vendors are not created equal, and the choice of provider needs to be based on their financial stability, the location of support staff (NZ or Australia works well), feature release schedule, API capability, and quality/price of their support levels.

The absolute key criteria is that the licensing model has to be at a point where a reasonable retail price point keeps the telco competitive and profitable.

The licensing model also has to be understandable. The more licensing levels, add-ons, and support options there are, the harder it gets for a sales team to quote and sell.

Keep it simple.

Which is more profitable, open source or proprietary?

Open source appears more profitable at a high level, after all, it has no licensing costs.

However other costs have to be considered, namely in-house development and support costs, and the cost of any lost business due to the lack of market leading features.

The templated provisioning and support offered by the right proprietary solution, matched with a continually improving service proposition (for which the telco incurs no direct costs) leads to greater profits.

Partner programs

Beware of partner programs that allow more established suppliers of the same solution to undercut new providers.

This problem is as old as the industry itself, and of course, all telcos have the ability to undercut others, even on a loss leader basis, but in vendor world, scale gets lower buy prices, which means new entrants are at a disadvantage.

So what happens to OSS now?

OSS still forms the framework for a number of proprietary solutions that have had significant functionality added, so it continues to play a role in that form.

For telcos focusing on small business users with very basic requirements, OSS represents a low cost solution that can be priced to suit that niche.

Brendan Ritchie (@bcarmody on Twitter) is the CEO for Lightwire Business (@Lightwirebus on Twitter) which provides internet, IP voice and WAN services across New Zealand and Australia.

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