The open-source movement, which has long made inroads into corporations via Linux and other enterprise-level software, now has a potentially bigger target in its cross hairs: the PBXs and network routers from companies such as Cisco that form the basis of networking infrastructure.
For now, the movement is largely limited to small and midsize organisations and is focused around the Asterisk open-source private branch exchange and Vyatta open-source routers. Cisco and other old-time networking vendors certainly aren't yet shaking in their boots over it. But it's a growing movement that they ignore at their own peril; lower-cost, higher-function technologies have a way of replacing existing architecture far faster than vendors realise, open-source vendors say.
As you might expect, whether open-source PBXs and routers are superior to their proprietary cousins is a controversial issue. The small and midsize enterprises that have chucked their proprietary PBXs and routers for open-source systems say the latter offer similar functionality with more flexibility and lower cost. Proprietary providers, however, question whether open-source vendors offer adequate levels of support and whether those who buy them have the technical expertise needed to install and maintain the systems.
The threat to Cisco
Open-source "may not have a huge impact now, but we're starting to see some companies with 5,000 endpoints considering switching to Asterisk. The more that do, the more that it will have an impact," Chad Agate, co-founder and CEO of SIPBox, says of Asterisk and open-source technologies. Prior to forming SIPBox, Agate had operated a company that sold Cisco systems, but he sold that firm to concentrate instead on selling Asterisk systems. SIPBox has replaced or is in the process of replacing Cisco, Nortel and Avaya systems -- some with hundreds of endpoints -- and expects more companies to follow suit.
"Open-source makes a lot of sense for non-profit organisations," which constitute a significant portion of SIPBox's customer base, Agate says. "They spend about 40 percent less than for the Cisco system and get the same feature set."
Asterisk runs on a wide variety of operating systems, including Windows, Linux, Mac OS X, OpenBSD, FreeBSD and Sun Solaris. It includes the high-end features of proprietary PBXs and operates on off-the-shelf software. New functions can be created by writing scripts in Asterisk's language, by writing modules in C and by writing scripts in Perl or other languages.
The trend to open-source technologies is somewhat limited now to companies that have relatively simple needs, have some technical expertise on staff or both, according to analysts. But the movement is clearly gaining momentum, with companies either replacing existing systems with open-source technologies or choosing open-source over proprietary products for new installations.
For example, Bill Ciminelli, vice president of network development and services at American Fiber Systems, is in the final stages of converting his company's PBX systems (one Nortel and a shared NEC system) to an open-source-based Asterisk system.
"If someone had presented the idea of an open-source system to me 18 months ago, I would have said no way," he says. "Now if someone comes to me with a technology, I ask first if there's an open-source option."
What it came down to in the end was price for performance. Ciminelli figures that he would have to pay at least three times as much for the same number of connections on a Cisco system as he has on the Asterisk solution.
The advantages of the Asterisk technology, according to Ciminelli, are that American Fiber was able to overlay its old dialling plan with its new dialling plan, enabling users to start using either one. In addition, the networked solution enables American Fiber's telecommunications systems at two locations to work independently of each other if necessary.
Though Cisco's system has similar features, there is some loss of functionality if the connections between the offices are severed, according to Ciminelli. If that happens, the Asterisk system includes a backup via TDM to the second office. The user wouldn't realise the connection had been severed, he says. Cisco could only provide that type of backup with duplicate equipment at each office.
This feature, plus others, such as the ability for each user to set up conference bridges (rather than having to go through a central administrator), as well as price, factored in the decision to pick an open-source system over Cisco and similar competitors, Ciminelli says.
"Sometimes you have to move outside of your comfort zone," Ciminelli explains of his decision to listen to the open-source proposal. "Sometimes you just have to put your prejudices aside and look at competing systems."
Ciminelli, whose firm provides metropolitan fibre systems, expects open-source technologies to make an increasingly bigger impact in the telecommunications portion of the market.
"As voice becomes more of an application, there is a lot less value associated with the name tags on the box," he contends.
Why Cisco may not need to worry
However, Ciminelli is in the minority, and open-source right now represents only a very small fraction of the market, according to Krithi Rao, an analyst at Frost & Sullivan.
"Most of the companies changing to open-source are in the small and middle-size business market," Rao says. "Most of the large companies, which is the market where Cisco concentrates, are going to stay with Cisco. Open-source is a niche market right now."
Others see open-source as a trend that could impact Cisco's business, though perhaps only with IP PBX units. Vyatta provides an open-source router product but is much newer in the market, so it's too early to determine its potential impact, analysts say.
Vyatta's free Open Flexible Router, like Asterisk, runs on off-the-shelf software, yet it offers the same WAN routing and security features as the proprietary technologies.
However, Sam Houston University, despite converting to Asterisk, is maintaining its Cisco routers and not switching to an open-source router system, says Aaron Daniel, the institution's senior voice analyst.
"We're replacing Cisco with Asterisk because it's more cost-effective," Daniel says. "With Cisco, we have to pay a licence fee with each additional phone. With Asterisk, we don't have the licence and our technical team can make any changes that we need."
The open-source infrastructure offerings aren't as good right now as the more traditional systems, he believes, so "we will remain a Cisco shop" in terms of infrastructure," Daniel says. "Open-source routing tends to be slower."
Open-source routing vendors don't agree that their products don't match the capabilities provided by proprietary vendors. Dave Roberts, vice president of strategy and marketing at Vyatta, says that the company is in discussions with a number of companies of varying sizes that want to keep costs in check while being able to change source code to meet their needs. Open-source offers this capability, and proprietary systems don't, he says.
But some companies don't have the technical expertise needed to tweak open-source code to meet their own needs, counter Rao and Cisco officials. Universities, which have students and staff with technical expertise, are notable exceptions. And even companies with some technical expertise may not have the necessary open-source knowledge to maintain the systems on their own. American Fiber Solutions, for example, contracted with Asterisk creator Digium for technical support as well as for the Asterisk system itself.
Bill Miller, vice president of product management and marketing at Digium, admits that most of his company's customers are those with some internal expertise. But he says Digium also provides support for those customers and prospects that need it.
Countering the cost claims
Joe Burton, Cisco's director for engineering for unified communications, counters that once the cost of support is factored in, Cisco's system is competitive on price with open-source systems. Additionally, he says, Cisco uses open-source, notably the Apache Web server, in some of its products.
"We believe that open-source is strong in some areas," Burton says. "We have a history of contributing to it, of leveraging Linux, Apache and other open-source code. We continue to look at the cost of our own solution to ensure that the full cost of ownership compares favourably to others in the market. As long as we continue to provide the right total value to our customers, we'll continue to get our fair share of the business."
Though the router market is certainly newer, Matthias Machowinski, directing analyst at Infonetics Research, says that there is room for open-source products in this part of the market. He wouldn't call them a threat to Cisco, however, because the entire market itself is growing.
"Open-source is growing like wildfire, but the whole pie is getting bigger," Machowinski says. As there is more demand for routers and IP PBX systems, the open-source companies can succeed without taking any significant market share away from Cisco, though Avaya might have some more competition at the lower end of the market, he contends.
"What would be more of a threat would be someone providing a ready-to-use open-source solution" with no coding needed, Machowinski says.
Even so, Sam Houston University's Daniel suggests that Cisco will have to rethink its licensing practices to make its IP PBX offering cost-competitive with open-source products.
Adds Agate, "This could make a big impact on Cisco. This is the way that voice over IP will be done in the future."
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