Open source gleaners hit telephony

Critics call them vultures, or buzzards. I prefer the term gleaners.

They're the people or companies that sweep the last crumbs of profit from a market or industry. Day traders, hedge fund managers, private equity funds -- they all provide liquidity, lubricate the economy, and keep the system efficient.

Signate is using open source to glean what profit remains from the telephone equipment market. They sell a virtual PBX, based on open source tools, which small telephone companies or landlords or private companies can use to provide business-class voice service to hundreds or thousands of desks.

"The telecom business is into its last residue of proprietary applications," CEO William Boehlke told me. "It's where companies like DEC went to die. What used to be a quarter million dollar piece of gear now sells for $75,000, and we can build them for $25,000."

While a company like Fonality will build the box and sell it to a business office, Boehlke sees this as still being a service provider business. "Not only do we need a richer feature set than Fonality but we have to give customers the ability to provide E911 and 411 and meet the CALEA regulations," he explained.

"People bought PBXs so they wouldn’t pay to call a colleague. We don’t have that problem. We think the PBX wil disappear, and will become part of what you pay for basic service. Only large organizations will keep telephony in-house."

Some 20 customers are looking at the early code of the current product, there are 100 firms on his customer list right now, but Boehlke thinks there may only be a universe of less than 1,000 firms he can sell to.

That's OK. It's all profit. And with open source, Signate figures on gleaning a little more of it.