Digium preps for growth with $13.8 million investment

Open source IP PBX vendor Digium is about to launch a calculated marketing and packaging campaign it hopes will land its Asterisk software and products based on it in the networks of carriers, large corporations, small businesses and even consumers.

With a US$13.8 million infusion of cash from Matrix Partners, the company is also getting marketing experience from the venture capital firm to analyze the potential buyers of Digium's VOIP technology, divide them into categories and craft strategies for selling to them with the help of partners, says David Skok, a general partner with Matrix.

Skok is also a board member of open source application-server vendor JBoss and hopes to apply marketing principles gleaned there to Asterisk.

He says Digium is in good shape already with 130 partners that can develop specific products and deal directly with customers, while Digium remains the technology developer whose name backs up the products partners sell.

"The trick is to leverage partners and not do all of it with internal resources," Skok says.

He says the company will refine what it is already doing by employing automated processes for creating customer leads, marketing and sales, with partners delivering products.

Digium remains committed to the open source model, says Mark Spencer, Asterisk's creator and president of Digium. "Open source enables improvements on products, and we want to build a community around Asterisk from a business perspective," he says.

Spencer says the company was already profitable, but wanted to take better advantage of the huge VOIP market that promises to blossom as businesses evaluate and adopt VOIP to replace their traditional voice systems that are reaching the end of their useful lives.

The range of potential products is vast and includes embedding Asterisk or parts of it in other specific gear, selling it for its PBX features or for its conferencing or its interactive voice response or voice mail, Spencer says.

"There are so many places people use this type of technology. The challenge is not finding opportunities; it's narrowing in on something more manageable," he says.

Digium plans to look at markets and develop packages for each, says Skok. For example, the company will define what a small business needs, from IP PBX, to handsets, to system installers to central management software to service contracts. It will then pull together those elements from its various business partners to present to customers as a single bundle, Skok says.

"We'll develop the whole product required to meet the needs of a market," he says.

Digium plans to announce specific products or product plans based on this new strategy later this year.

While the company is taking US$13.8 million in funding from Matrix, it is not essential to growing the business, Spencer says.

"We're profitable," he says. "Me and my parents put in $4,000 back in 1999 and Adtran put in a little in 2000, but basically we're self-funded."

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