The next big IPO in VoIP
It has been almost two years since the Acme Packet IPO. VoIP industry could do with another little boost. I have my eyes set on Asterisk/Digum next. I think there could either be an acquisition of the company or an IPO within the next 12 months. The usage of Open Source VoIP has hit that critical level where it becomes a force to reckon with.
Digium serves as the corporate identity of the Asterisk project, an Open Source VoIP platform which on average is downloaded 3,000 times per day. The company makes money from (1) selling hardware that lets Asterisk platform interwork with PSTN, (2) licensed version of Asterisk IP PBX system, and (3) IP PBX license revenue selling the recently acquired Switchvox product.
Switchvox product is one of several licensed versions of Asterisk in the market. Digium has in fact also acquired a company that organised Astricon trade show that brings under a thousand developers together from various countries. Astricon owners also ran an Asterisk training program.
So those are the sources of revenue. The company claims to have had 26th consecutive profitable growth quarter. It has shipped over 4 million gateway ports so far. Approximate geographic split of ports/revenues is as follows: 52% North America, 25% EMEA, 23% APAC and CALA. Europe is ramping up fast. Nearly 45% of all Asterisk downloads these days come from Europe.
My interaction with Digium also revealed that the licensed version of the IP PBX part has seen revenue growth of 115% Y-o-Y.
Here are a few more numbers for the number crunchers amongst us: There are about 3.5 million to 4 million Asterisk servers deployed around the world. An estimated 110 million end points are connected to Asterisk systems. That is the story on the enterprise side. Asterisk also happens to be in use at several major service providers. In 2007, these service providers transported over 6 billion commercial VoIP minutes over the Asterisk platform. The monthly run rate at present is likely to be in the region of 1 billion minutes per month. In 2007, about 900k IP Phones were added to Asterisk based service provider systems. That IP Phone figure excludes the self-managed Asterisk networks of enterprise users.
Wow!
The minutes figure takes me back to one of my previous blogs on OpenSER, another Open Source VoIP project that probably handles a higher volume of service provider voice traffic than Asterisk. OpenSER is in use at two of the leading German VoIP providers, 1und1 and Freenet. There are several service providers that mix OpenSER and Asterisk together. Asterisk has a weakness today in the volume of SIP registrations that it can handle. OpenSER does that job better. But Asterisk plans to fix this problem with its next release. The company is also developing the platform for larger clustered networks. The features are certainly available. The scale needs some attention.
And if you thought the Voice 2.0 piece was missing, you should know that Asterisk already has developer friendly APIs available. A lot of Voice 2.0 companies use Asterisk. The company plans to bring more robust APIs to the table and build a marketplace of apps developed by partners. These apps will then be sold via Digium channel.
It seems like Asterisk/Digium has all the major ingredients of a company that could have a successful IPO. It can also be a good acquisition target since it takes you inside an account where you can then sell your support and service level agreements. The barriers to entry into an account are low. However if there is ever an acquisition of Asterisk, it cannot be acquired without acquiring Digium. That is the way Asterisk/Digium is set up. And that is great for the investors. As an industry observer I would however prefer that Asterisk/Digium takes the IPO route rather than the acquisition route. The former would certainly be the desirable option for so many developers and users that have invested time and resources in this Open Source platform.
