Digium: Doubling Annual Sales with Open Source VoIP

By Aaron Huslage

We thought it would be good to give open source VOIP pioneers Digium equal time, given our recent post about Freeswitch. Digium's founder, Mark Spencer was the original author of the Asterisk PBX, one of the more mature open source VOIP platforms. The company's VP of Marketing, Bill Miller, told me that "Last year was a big year for us; at the year-end we had finished our 24th straight profitable quarter. We had grown to about 130 employees." While Digium doesn't disclose financial figures, its sales have reportedly been doubling over the past few years and it has at least $14 million in venture capital since launching.

Digium has been traditionally focused on the SMB market with its line of telephony interface cards and small appliances and it is increasingly getting into services. Miller said, "We position the products with 2-400 users as an IP PBX. That business is growing over 100 percent year-on-year." The company recently revamped its entire product line and has announced a distribution partnership with 3Com for the sub-30 user range.

Digium continues to invest heavily in the open source side of the Asterisk product as well. Miller told me that "A sizable portion of our developers are 100 percent dedicated to the OSS side and don't do any commercial work." This is quite a difference from some other OSS-based companies like Red Hat that tend to cross-pollinate developers.

Digium has made some missteps in the past, which have stirred controversy among the community outside of the company. This was part of the genesis of several other forks of Asterisk. The genesis of much of the controversy has been the defense of the Digium brand, and Miller said, "It's not Digium that's hurting OSS, it's the people who leverage the Digium brand and don't give back that hurt the OSS side of things. We value it with a vengeance." This is often a point of contention when companies form around OSS projects, and one that has played out in different ways over the years.

With regard to Freeswitch, Miller says that Digium doesn't "see us competing with them any time in the near future." Freeswitch isn't currently capable of commanding the attention of the company in any big way. They are largely in different markets, with Freeswitch focused on service providers, and Asterisk focusing on the SMB market. The relationship is tenuous at best, but there is definitely room for many projects in the VOIP space.

Digium is in many ways a good model for building a company around an open source project. It is a profitable company that has grown very conservatively, picked experienced leadership, and has focused on products above all else. With sales doubling year-over-year, this is surely a company and a market segment to watch.