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 Channel Futures

Best Practices


Digium: Asterisk Accelerates As Economy Crumbles

  • Written by The VAR Guy 1
  • December 17, 2008
As the economy went off a cliff from September to December 2008, Digium says Asterisk downloads rose by 32 percent compared to the same period in 2007. But that's not all. Digium -- which promotes Asterisk, the open source IP PBX -- has about 550 channel partners and resellers, up from about 170 in December 2007, The VAR Guy has learned. Here's the scoop.

Digium AsteriskAs the economy went off a cliff from September to December 2008, Digium says Asterisk downloads rose by 32 percent compared to the same period in 2007. But that’s not all. Digium — which promotes Asterisk, the open source IP PBX — has about 550 channel partners and resellers, up from about 170 in December 2007, The VAR Guy has learned. Here’s the scoop.

According to Digium, Asterisk was downloaded 1.5 million times in 2008, up a startling 50 percent from 2007. 50 percent higher than last year.

Digium’s partner program is growing even faster than Asterisk’s download rate. Channel partners generate roughly 80 percent of Digium’s revenue, and the company’s partner ranks have more than tripled since 2007. Some of that partner success can be traced back to SwitchVox, a channel-friendly company that Digium acquired in 2007.

Officially, Digium says it has roughly 400 reseller partners. But if you lump in OEMs (original equipment makers), ISVs (independent software vendors) and other types of partners, the figure is about 550 partners, according to The VAR Guy’s Open Source 50, a survey that examines open source partner programs. (Complete survey results will be published in January 2009).

In the meantime, here’s another Digium data point: The company has shipped more than four million ports for connecting telephony systems to Asterisk.

Still, Digium is privately held so it’s difficult to truly measure the company’s performance. Is the company profitable or nearing profitability? Hmmm. The VAR Guy needs to seek more answers.

The VAR Guy is updated multiple times daily. Don’t miss a single post. Subscribe to his newsletter, RSS and Twitter feed.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Best Practices

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6 comments

  1. Avatar Tristan Rhodes December 18, 2008 @ 8:38 pm
    Reply

    Seek and you shall find:

    “We have just celebrated our 26th consecutive profitable growth quarter…”

    http://blogs.digium.com/2008/08/10/yet-another-record-quarter/

    Does that answer your question? To me, that sounds like 26 profitable quarters, with each quarter being more profitable.

    Tristan

  2. Avatar The VAR Guy December 18, 2008 @ 9:12 pm
    Reply

    Tristan: No doubt, 26 consecutive profitable quarter growth sounds like good news. And it probably is. But also keep in mind: As a privately held company, Digium could be talking about:

    1. EBITDA (earnings before interest, taxes, depreciation and amortization)?
    2. Operating Income?
    3. Net Income?
    4. Something Else?

    Again, The VAR Guy isn’t questioning Digium’s momentum. Kudos to them. But there’s a big difference between net income growth and EBIDTA growth.

    On the one hand, Digium is fortunate to be privately held in a bad economy. The company can take a longer-term view and build its business rather than worrying about penny-per-share earnings reports each quarter. But on the other hand, it’s difficult for outsiders to get a true feel for Digium’s performance since the finances don’t have to be disclosed.

    That’s not a criticism of Digium. The VAR Guy is part of a privately held company as well. And he isn’t opening his books to anyone … unless a buyer with a big bank account comes along.

  3. Avatar Frank Earl December 18, 2008 @ 11:59 pm
    Reply

    Heh… In some ways being Publicly Traded is a BAD thing- worrying about that penny-per-share deltas in earnings can make you do very, very stupid things in the short to medium term. Worrying about the share-seller value (never confuse shareholder value with that stock price- that ticker value is the share-seller value…) causes you to let go of people when you don’t need to, makes you worry about things like getting out of innovative markets (Witness the BS with analysts, etc. saying Sprint should ditch it’s 4G plans because they’re “too risky”- never mind that the proposals doom the company in about a year or so’s time because they’re about to become yet another also-ran in the standard market people keep trying to push them into…). and so forth.

  4. Avatar Bill Miller December 19, 2008 @ 12:23 am
    Reply

    Digium is indeed profitable, recently marking our 27th consecutive quarter of revenue growth. The downturn is tough on all companies so we’re taking nothing for granted. But in a tight economy where organizations have to do more with fewer resources, Digium and other open-source companies offer an attractive, lower-cost way to do business.

  5. Avatar Rurik Bradbury December 20, 2008 @ 5:52 pm
    Reply

    I have no doubt that Digium is profitable. Even though they only see a fraction of the total revenue from Asterisk, it’s still enough for a successful business.

    To me, though, the success of Asterisk has been highly boosted by the poor strategy of the major PBX vendors. They try to lock in and bilk SMBs — and in doing so created a vacuum, a hunger for a cheaper alternative that Asterisk could address.

    One thing we’re doing by offering Unison unified communications free (Unison site) is filling the vacuum created by overpriced MS Exchange, though we will probably see quite a few seats move over from Asterisk too as companies shift to unified communications.

    Especially in 2009, enterprise software will have to be much more nimble in its business model and VARs will need to be creative with open source or free software if they want to avoid a serious contraction.

  6. Avatar The VAR Guy December 22, 2008 @ 5:33 pm
    Reply

    Rurik: You’ve just identified another perfect storm… the convergence of Asterisk with Unified Communications. No doubt, that’s a hot trend in SMBs.

    Keep The VAR Guy posted as you strive to fill the vacuum.

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