Pingtel Breaks Open VoIP Monopolies With New Open Source Business Model

Woburn, Mass., February 18, 2004 — Pingtel Corp., a leading provider of SIP-based Voice–over–IP (VoIP) solutions for Enterprise communications, today announced that the company is moving its entire Enterprise communications suite, including the company’s award-wining SIPxchange IP PBX platform, into open source. With this move, Pingtel has shifted its business model to become a subscription-based software and services company similar to leading Linux-based enterprise subscription models, focusing on producing business-grade distributions of open source code and offering the requisite customer support, documentation, professional services and training functions required to support mission critical enterprise communications applications. The company plans to release the code in March 2004 through its website (www.pingtel.com) and on the open source community site currently being developed by Pingtel and its partners.

With this move Pingtel leverages two major trends in the enterprise open source market: a) The increasingly prevalent customer requirement for standards-based solutions and multi-vendor interoperability that lowers the total cost of ownership and provides customers with greater control, flexibility and innovation, ultimately transitioning enterprise telephony to a standard IT application versus a proprietary, vertically integrated hardware solution, and, b) The rapidly increasing adoption of Linux and other open-source applications within the enterprise IT market.

“The combination of standards-based SIP and open source is a powerful union that will reshape the enterprise communications market at every level, providing the foundation on which a new market model will be based,” said William J. Rich, Pingtel’s CEO. “By leveraging the cost benefits and flexibility of open source with the low-risk, field-proven, business-grade SIPxchange IP PBX source code, customers will obtain enterprise communications solutions as low-cost software distributions that readily integrate with customers’ preferred infrastructure, hardware and applications as alternatives to expensive, single-vendor solutions available today. This shift will accelerate mass-market adoption, enabling VoIP to leapfrog legacy TDM-based technologies and become the pervasive enterprise communications technology of choice.”

Pingtel’s enterprise communications suite includes the SIPxchange Comm Server for IP PBX and call routing applications, SIPxchange Media Server with voice mail, auto-attendant and IVR, the Pingtel Configuration Server and the Instant xpressa™ SIP soft phone and xpressa™ desktop SIP phones. SIPxchange software runs on standard PC server hardware and using the Linux open source operating system. Pingtel will offer Enterprise Editions of the open source code base with full support and documentation on a subscription basis, based on the number of CPUs in the server host.

Pingtel is in the process of migrating its existing customer base to the new open-source model. Currently deployed in over 100 corporate facilities, Pingtel’s SIPxchange product family is highly valued for its high quality and ability to drive down the cost of enterprise communications programs and provide robust, reliable service supporting mission-critical voice and data applications.

“The move to an open source business model will escalate the trend towards interoperability between products and away from the previously closed and proprietary world of voice communications. This development will provide the rich variety of product options and lower maintenance costs that we have always enjoyed in the data network arena and will allow us to tailor the best solution for our organization,” said Mark Dumic, Manager, Networking Systems & Telecommunications at Swarthmore College. “By certifying a high-quality, low-risk solution based on open source, Pingtel is engendering a dramatic shift in the cost structure of VoIP technologies. This shift, combined with the inherent flexibility and adaptability of open source gives us the power to decide when and how we will leverage VoIP technologies in our network.”

The Open Source Business Model

“Open Source has the potential to bring PC-like economics and multi-vendor solutions to the telephony market, providing the same magnitude of price and innovation benefits to the enterprise customer,” said Rich Costello, research director with Gartner, Inc. “The secular shift from TDM-based technologies to IP is well underway within the enterprise telephony market and the combination of SIP, as the defacto VoIP standard, and open source has the potential to accelerate the adoption. Fundamentally, this will force the telephony market to re–examine the current model of vertically integrated single-vendor solutions to the more open model typical of the information technology (IT) sector.”

The move to open source addresses a significant market opportunity with the enterprise Communications market. Ideal for enterprise customers with up to 400 lines, SIPxchange will tap into a market with annual requirements for between two and four million new systems. This represents an infrastructure market opportunity of between $2.5 and five billion annually. Based on the open-source subscription model, Pingtel has the opportunity to participate in a subscription license market estimated by the Gartner Group to be nearly $3 billion.

Creating a Development Community to Support Innovation

In order to support a community of developers for SIP–based technologies, Pingtel is working with other open source leaders to develop a community–based website. Currently under construction, this site will be the industry’s premier repository of information for developers. Within the community, developers will be able to share updates, discuss issues and tap into innovative ideas and developments from peer groups around the world. Currently scheduled to open in March of 2004, the community site is being established as an autonomous, not-for-profit entity.

“The availability of open source alternatives has revolutionized the enterprise server and desktop market and will do the same for the application layer,” said Stuart Cohen, CEO of the Open Source Development Lab. “By introducing an open source alternative to existing, proprietary VoIP solutions, enterprise customers can look forward to new level of quality, innovation and choice.”

SIPxchange, the industry’s first open source based enterprise communications suite, is grounded in the concept that a community of ideas provides a more fertile ground for innovation, progress and product development. Customers will benefit from the move to open source by the commoditization of the core PBX software, leading to lower prices, higher quality through peer review, true (non-polluted) standards, multi-vendor interoperability and accelerated innovation. Select customers are already working with versions of the code to ensure applicability to their specific needs and network applications.

About Pingtel Corporation

Pingtel’s open source business model will prove to be a fundamentally disruptive force in the $5 billion per year enterprise PBX market. By offering enterprise–class, all SIP–based, open source IP PBX software under a Linux–style subscription license, Pingtel is combining the best attributes of open source development — low cost, adaptability and flexibility — with the reliable solutions and support enterprises require for voice applications. Pingtel's open source IP PBX software is the linchpin technology that will catalyze the movement of enterprise communications into the data center and away from purpose-built hardware. Like enterprise–grade Linux, this approach will drive commoditization of traditional telephony hardware and software and eliminate technology lock–ins that have plagued the industry for decades. This new business model will lead to pervasive adoption and shift significant market share away from vertically integrated, proprietary–solution competitors. For more information, visit www.pingtel.com. See how Pingtel’s open source business model is changing how public and private companies are judged and valued at VoiceCON 2004, booth #513.

Note to Editors: Pingtel, Instant xpressa, xpressa, etc. are trademarks of Pingtel Corp. All other trademarks are the property of their respective owners.