In a small or medium-sized business, the cost of telephone equipment, phone lines, and long distance calls can easily reach tens to hundreds of thousands of dollars. A chief executive officer or operations manager, looking for ways to lower costs, finds there's few ways to do it. Equipment prices are high; management fees are steep; proprietary software locks a company into a particular vendor's solution, and that's not all. Phone equipment vendors, which become virtual monopolies after insinuating themselves into a business, expect companies to pay for costly upgrades on their time schedule, not their customers'.

Although attempts to solve business problems with innovative voice-over-IP (VoIP) solutions exist, the final product simply replicates the vendor lock-in model. The freedom to choose between vendors, increasingly the norm since the telecommunications industry was deregulated, has yet to hit the IP telephony market - until now.

Now there's a new Enterprise Communications Model available based on enterprise-grade Open Source software that empowers small-to-medium-sized businesses (SMBs) to decide when and how to use VoIP technologies. They can choose to use an enterprise-grade VoIP solution at any stage of deployment whether it's in conjunction with an existing traditional phone system, an upgrade to another vendor's VoIP system, or a new build; technologies and vendor solutions can be mixed and matched. It's a radically different approach that invites competition and the simplicity of the Open Source model creates obvious cost benefits and value.

sipX, the industry's first Open Source enterprise communications voice services platform, combines the cost savings of voice-over-IP technology with the quality and adaptability of Open Source software created by a community of developers at SIPfoundry (www.sipfoundry.org); it's a solution that can improve a business exponentially. With an Open Source solution, companies no longer have to pay licensing fees for software or premiums for proprietary hardware. They will pay less for licensing and still get the enterprise-grade support they got from traditional vendors, such as software additions, service-level agreements, and training. If the system's fails, companies can call to resolve the issue. Guaranteed service contracts will make Open Source the low-risk solution widely adopted in the enterprise.

The Benefits Are Clear and Compelling
Using a voice-over-IP solution, a company can take advantage of the merged benefits of IP telephony. Rather than pay to run two separate voice and data networks, businesses can combine the two. Phone bills become markedly less because voice calls over an IP network are much less expensive compared to calls over the publicly switched telephone network (PSTN). System installation costs are less because packet telephony lets users buy off-the-shelf servers from multiple vendors, rather than proprietary Private Branch Exchanges (PBX). Yet, despite these benefits, today's vertically integrated IP telephony market has prevented the wide adoption of voice-over-IP solutions and has locked companies into proprietary systems. Combining a voice-over-IP solution with an Open Source business model solves this problem while multiplying the benefits of IP telephony technology.

Voice-over-IP
While a lot of voice traffic is still carried over dedicated voice circuits on a Public Switched Telephone Network (PSTN), enterprises have started migrating their voice communications from TDM networks to packet-based networks. VoIP provides two-way transmission of voice/audio over a packet-switched IP network and because IP networks are so ubiquitous, VoIP represents a natural evolutionary step as voice, video, and data converge onto a single network.

VoIP offers a number of advantages over conventional enterprise phone systems. Companies can use it to cut their voice and fax costs by eliminating traditional long-distance toll charges or 800-number costs. VoIP technology can also be used to integrate voice and data networks onto one IP-based infrastructure that supports data, voice, and video. This minimizes capital investment in equipment and cabling and reduces the cost of installation, maintenance, reconfiguration, and administration. Using a single set of IP access lines for both voice and data can also reduce network access costs.

While VoIP's benefits are significant, tcurrent solutions for small -to medium-sized businesses duplicate the old proprietary PBX model. So despite the benefits, SMEs find themselves locked into a single-vendor solution, paying to license software, and trapped by whatever equipment, pricing, and patches the vendor issues. To address this problem, an Open Source solution is needed.

Open Source
The key to preventing vendor lock-in and creating an affordable interoperable voice-over-IP solution is to open up the source code to a larger community of developers. Many eyes bring greater stability and more functionality. An Open Source solution lets companies run voice-over-IP communications software on off-the-shelf Linux servers and use equipment from multiple vendors; it's a solution that fosters competition. It's also a solution that chief information officers (CIOs) and even the government support.

With an Open Source VoIP solution, a small to medium-sized business gets the software for free (no licensing fees) and IP/TDM gateway equipment from multiple vendors. Rather than requiring propriety phones, the Open Source solution uses standards-based ones. The business owner only pays for professional services and a support subscription . It's a dramatically lower-cost solution than any of the proprietary systems on the market. It mirrors the way costs in the PC market dropped dramatically as components became commodities. A vertically integrated market denies telephony customers PC-like economics and multi-vendor solutions.

The Open Source model isn't new; in fact, it's picked up a lot of momentum in the past few years. Linux and Apache have gained significant market share. Most Web traffic today travels over servers that run Open Source software. Large enterprises are using Open Source databases to break vendor lock-in and cut costs; so much so that the spread of Open Source software threatens all of the commercial database providers. The Associated Press, Saber, and Cox Communications, Inc. are all using Open Source software from MySQL AB of Sweden. Massachusetts administration and finance secretary Eric Kriss has instructed the state's technology officer to adopt a policy of Open Source and open standards for all future spending on information technology. Even IT directors at the Pentagon have said that Open Source software is cheaper and more secure than proprietary software. Cap Gemini Ernst & Young in France has been using Open Source for 15 years.

Apple, HP, IBM, Oracle, and SAP are all using Open Source software too. They have invested heavily in Linux and the Apache Web server and are using off-the-shelf hardware.

Why has Open Source become important in the voice-over-IP market? Because buyers and the vendors that support the IP phone systems need an alternative to the proprietary software and hardware that locks companies into vertically integrated solutions.

For a comparison of proprietary versus open source solution, see Table 1.

Proprietary VoIP Solution Open Source VoIP Solution

Building an Open VoIP Solution
An Open Source business model in the IP telephony market will be a fundamentally disruptive force in the $5 billion-a-year Enterprise PBX market. This model combines the best attributes of Open Source development, including low cost, adaptability, and flexibility with the reliability and support that enterprises require for voice. Like enterprise-grade Linux, this approach will drive the commoditization of traditional telephony hardware and software, eliminating the technology lock-in that has plagued the industry for decades. This new business model be adopted pervasively and shift market share away from vertically integrated, proprietary competitors.