San Jose – At the VON conference in San Jose this week, Digium, creators of the Asterisk open-source telephony software, unveiled the Switchvox 3.5 and the AA60 Switchvox Appliance, designed for large businesses and small businesses, respectively. The new products are additions to Digium’s Switchvox product line, based entirely on Digium’s patented Asterisk technology, an open-source project headed by Digium and backed by hundreds of developers around the world.

Small businesses are a relatively new focus for Digium, which traditionally works with medium to large enterprises. In this open-source telephony market, Digium is up against the traditional phone suppliers and big names like Nortel and Cisco. What differentiates Digium, CEO Danny Windham said, is an ease of use amongst its Switchvox product line, so that small to large businesses can make their phone systems work with whatever level of support and customization they need.

As an example, Windham cited a company that wanted the ability to have the call-in session be heard by those callers waiting in the queue. The customer was a psychic hotline, and the company did not want to lose callers who grew frustrated waiting for their turn. “We use customization of the phone system to make it work for you,” Windham said.

Digium’s goal is to enable all people along the spectrum of tech-savvy to technology illiterate to be able to set up and use the Asterisk program, he added. For this reason, Digium also announced at VON that traditional distributor Westcon will offer Digium’s line of Asterisk-based telephony platforms to its worldwide community of reseller customers, targeting the SMB market.

Windham, who joined Digium over a year ago, is the former director and chief operating officer at Adtran, whose products are often used in conjunction with Digium’s open-source platform. At the VON show today, he spoke to attendees about the open source VoIP market and prevailing industry trends.

The first trend Windham noted was that open source is disrupting proprietary alternatives. In the last few years, the market has been in the formative stage of open-source foundation for the enterprise market, he said. Today the industry is moving toward the phase of using open-source foundation for applications. “We are moving towards a collaborative economy based on mass collaboration,” he said.

“The more contributors that a project can attract, the more momentum that project can create in the marketplace,” Windham said, adding that the projects with the most customization and value-added applications are going to be the most successful.

As an example of a collaborative solution, Windham pointed to Wikipedia, a collaboratively created Encyclopedia, which has over ten times the content of Britannica, even with only five employees as of the end of 2006. The case of Wikipedia raises the question: how reliable is this development model? According to Windham, Wikipedia generally has four errors per entry whereas Britannica averages three per entry. The difference is that Wikipedia can be corrected in real time and typically only takes four minutes to update. He cited TiVo, BMW, Motorola Razr and Vonage phone lines as other examples of open-source projects that have seen a lot of success.

Open source companies in general have emerged with a number of business models, and there is no one de facto business model to make a for-profit company, Windham said. For Digium, there are two distinct corporate roles – the benevolent Asterisk project sponsor and maintainer and the for-profit company promoting Asterisk in packaged versions like the Switchvox line.

Windham described Asterisk as an engine that can be configured for general to specific applications, from SIP phones to conferencing speakers. “Asterisk has truly become a worldwide phenomenon,” he said, with the Asterisk community being voted most influential individual in VoIP at the end of 2006.