Open Source Kicks the Cost out of SMB Unified Communications

By Nortel

When new technologies like unified communications hit the market, companies with big budgets are the first to benefit while smaller businesses are often stranded on the sidelines by product prices that are out of their reach.

To try to beat the high cost of buying licensed applications, it's tempting for small to medium-sized businesses (SMBs) to deploy free, 'open source' software, developed by non-profit groups of volunteer users and available to everyone over the Internet.

But relying on open source for critical business communications can be risky for SMBs which have limited IT support on staff, or none at all. If something goes wrong, problems with open source can only be worked out in chat rooms and message boards rather than resolved quickly through the 24/7 expert service that comes with licensed software. 'Free' can have a high cost.

No charge, open source software like web browser, Firefox, and IM client, Pidgin, have become hugely popular for both personal and corporate use. Open source also forms the platform that supports millions everyday on the social networking site, Facebook.

In the computing industry, some open source software such as the Linux operating system have evolved to such high levels of quality that major vendors like IBM are packaging or embedding it with their own products. This gives their customers the advantages of low-cost, open source backed by technical support that's not available if they download the software on their own from the Internet.

Using this same approach, Nortel surprised industry observers in the spring of 2008 by being the first telecom vendor to integrate open source telephony software into a unified communications solution specially designed for SMBs with the simplicity and price they can afford.

Nortel has used open source from the non-profit, SIPfoundry group, together with its own technology innovations and telephony expertise for designing its new SMB solution, the  Software Communication System, (SCS)500. Nortel engineers have contributed significantly to the SIPfoundry code through more than 300 new components, applications, features and improvements to quality that have become an integral part of the open source software.

Nortel also recently acquired U.S.-based Pingtel Corp., which has been a leader in the development of SIPfoundry's sipXecs open source solutions and sold support services to its users. The acquisition of Pingtel Corp. by Nortel will further accelerate the development of innovative new features for sipXecs, which forms the basis for Nortel's SCS500 solution.

One SMB product using open source may not seem surprising but in principle, it represents a bold departure from how Nortel and its telecom competitors have developed their new technologies over the past century. For a company like Nortel, which spent $1.7 billion on R&D in 2007, investments in intellectual property have traditionally been top secret, not shared publicly for the broad benefit of competitors through non-profit open source groups like SIPfoundry.

"When we first started participating in SIPfoundry, there were people who just shook their heads and thought we were setting ourselves not to make money," says Tony Pereira, portfolio leader for Nortel, Business Communication Solutions. "But we're blending the best of two different worlds here. We're taking the flexibility and strength of an accelerated development cycle through a high quality, open source community then adding to that Nortel's long telephony heritage and leadership in the unified communications space plus 24/7 service."

"If you are going to be fast to the market today with low cost products that are essential to a sector like SMBs, you can't afford to have a team of R&D engineers work for two or three years to scale down current unified communications technology from big business to small," he says. "You have to find new ways to free innovation and speed up the process so it's much more responsive to what SMB customers need today."

Open source helps break down time consuming and costly barriers to innovation by being part of a collaborative, global development community that can allow any technology company to do more with less, Pereira says. "A group as reputable as SIPfoundry isn't about amateurs tinkering with code in their spare time just for fun. What's being developed here is based on global standards and nothing is available for downloading from the web site unless it is thoroughly tested."

The approach also meets what SMB customers say they now want from IT and communications solutions - flexibility to pick and choose elements across vendors, rather than being restricted to one proprietary offering that may not have all the features they want to add in the future, at the best price.

"Customers told us they love open source because it doesn't lock them into one vendor but they wanted to buy a commercial version of it to ensure they never have to worry about support and service," Pereira says. "We listened and developed what they need into the SCS500, offering it with leading hardware server platforms from Dell, HP and IBM."

"IBM has had a long standing commitment to open standards for software interoperability. We think that using these open standards and specifications can dramatically improve customers' ability to communicate data within and between their enterprises while offering choice and flexibility," says Leif D. Rush, IBM marketing manager for IP Telephony and Collaborative Technologies. "Open source has become one of the most powerful movements in the history of IT, shifting the revenue model from a focus on selling one piece of proprietary software to selling broad, comprehensive solutions and support so that a cusotmer's range of needs are met."

IBM has become a channel partner for selling Nortel's SCS500 as an opportunity to increase its presence in the SMB market for its own hardware, Rush says, while opening the door for Nortel to sell its software into IBM's hardware channels.

"The SMB market is challenging for technology vendors to serve because when businesses have only 50 to 1,000 employees simplicity and, low cost are such critical factors in what they choose to buy," Rush says. "But every SMB has to have a phone system so why shouldn't they have the same benefits that bigger companies are already receiving through unified communications?"

"The Nortel and IBM alliance for SCS500 gives SMBs all the benefits of open source backed by support from two companies that have a long heritage of strength in their industries," Rush says. "If they run into a communications software problem, Nortel is there for support. If it's a hardware problem, IBM will handle it. This allows SMBs to stay focused on their business without the anxiety that the complexity of their software or hardware will let them down when they need it most."