Digium AsteriskA quiet revolution continues at Digium, the poster child for Asterisk -- the open source IP PBX platform. Many open source companies struggle to line up resellers and solutions providers because, frankly, it's unclear how to profit from open source. But in Digium's case, more than 250 partners are banging on the company's door because Digium really has built a better mouse trap. Here's the scoop.

First, some background: Similar to Linux's impact on the operating system market, Asterisk is disrupting the traditional PBX market -- which is filled with legacy, proprietary, expensive telephony platforms.

Using Asterisk, solutions providers can dive into the open source code, make specific customer modifications, and integrate IP PBXes with open source CRM and call center software. Or, less sophisticated partners can simply resell Digium's Asterisk products with little or no tinkering at all.

Keep An Open Mind

Now, for the challenge: Only a few open source companies have gained a critical mass in the IT channel. Balancing three key factors -- free, open, profitable -- isn't easy. But Digium seems to be on the right track.

The company acquired another Asterisk player -- Switchvox -- a few months ago. And more recently, Digium inked a global distribution deal that could raise Asterisk's visibility worldwide. So far, so good.

But perhaps the most impressive piece of news is this: Digium has unified its channel program across its base of Digium and Switchvox resellers, notes TMCnet, which means everyone can now go to market with a set of clearly defined marketing and sales tools. That channel program includes roughly 250 partners -- but The VAR Guy is quick to note that sometimes numbers are misleading.

Where Are the Profits?

For more than a decade, many small switch and router vendors have made the mistake of bottom feeding -- pushing volume-driven channel programs on thousands of break-fix resellers. "Sell 1,000 of our routers, and we'll throw you an extra 1 percent margin."

Lovely. Volume-driven partner programs are like pyramid schemes. At some point, you attract the worst of the worst resellers and your partner program collapses under the weight of products sitting on warehouse shelves.

In stark contrast, Digium and its partners shouldn't suffer that fate. Promoting Asterisk to small and midsize businesses requires a slightly more sophisticated sell. And the most successful partners will offer a blend of software development, unified communications and voice over IP expertise. These services -- unlike reselling a commodity networking box -- fetch pricing premiums, consulting fees and support contracts from customers.

Sure, Digium's 250-plus partners -- a figure first reported by TMCnet -- could simply resell servers with Asterisk pre-installed. But that doesn't seem to be the case. While low-end router, switch and network equipment makers seem to be struggling amid fierce competition and a weak economy (example: Netgear), Digium and its partners seem to be thriving.

One source tells The VAR Guy that Digium hopes to double its revenue this year, with a potential IPO (initial public offering) to follow in 2009 or 2010. Partners, The VAR Guy firmly believes, will also cash in on the Asterisk boom.