On July 7, Sangoma Technologies agreed to acquire Paraxip Technologies in a cash and stock deal of $4.8 million. FierceVoIP caught up with Sangoma Technologies Founder and President/CEO David Mandelstam to talk about the new acquisition and what it means for his company and the open source comment. (Note: Some responses have been shorted for brevity)
Mohney: So what is Sangoma today? A hardware company? A software company?
Mandelstam: We are a hardware company with an additional software component. In order to sell hardware, we have to provide a user interface of some kind. Our user interfaces have always been at a fairly low level, some people like them, it gives them a great deal of control... it works well with Asterisk, they have all the call control, all of that is part of the Asterisk package. It also works well in other situations where people have a certain amount of code they can just plop on top.
There's a different class of users not interesting in writing or maintaining a PRI/BRI stack, all they want to do is place a call and get an answer back. They want these high-level primitives which really just control the system and all the heavy lifting is done by someone else....we could have written our own API, but SIP is the TCP/IP for telephony...
We needed a SIP gateway, it is what we needed if we wanted to be in this business in a serious way. We needed an acquisition and the people that go with it. There's an API to use, but any kind of SIP device can talk to us, you don't have to change anything. We take care of everything else underneath.
There are all sorts of SIP-only implementations, PBXes in SIP, SIPxchange, Asterisk itself. It's much better to have a new cleaner [SIP] interface. It opens up the whole unified communications space where we have never been a player before; now we do.
[Paraxip] also brings to the table, in addition to the SIP technology, they bring a whole bunch of other technologies, including improved operation in the call center. There's a whole basket of interesting technology that are not in our standard space. They have a different, but very complete rolodex, different kinds of customer, people we don't deal with.
Acquisitions have to fit very very closely to be successful. We've looked at many many candidates and we've never found yet before that fit as well as this one.
Mohney: How does this acquisition strengthen your hand in the open source market?
Mandelstam: There are a whole slew of open source projects that don't have really good TDM support. Freeswitch currently doesn't, Yates, SIPxchange just doesn't, other sip only implementations that don't have TDM support. We can provide TDM support to those projects very very easily without anyone having to do a whole lot of work.
We're seeing this as great for the open source community and Asterisk itself. The TDM implementation is totally different, far more scalable. It can easily handle a T3 load of TDM on an Asterisk box using this...[before] nobody could handle 1,000 calls... it's one reason we don't have a T3 card.
Now you can really, quite easily. There are advantages to asterisk as well, stability, certifiability, just general auditability of the code, load sharing ability, which we can bring to the table. Even the Asterisk users should find something really valuable in it for them.
There are open source projects that have [no TDM support], and they really need something.
Mohney: How does the acquisition move you out of the vanilla IP PBX space and into UC?
Mandelstam: Mainly, we have the SIP gateway, the door-opener. Nobody in the UC world is going to modify their code to work with some other API, they're not going to do it. There's no point in going to Microsoft and asking them to do it. SIP fits right in there. The universal API is the other part of it.
Mohney: What's the potential for other acquisitions? Maybe find some bargains somewhere...
Mandelstam: We paid fair price for Paraxip, everyone is happy with it.
You have to find the proper fit. It's not simply that you have find technologies, you have to find somebody, a group of people whom you like and whom you can work with. You want to find something completely synergistic, not something that will destroy your current market.
From a marketing point of view, you want to target one that has its own marketing channels different from yours. You don't want to find that you are confusing the market. You want to find someone that has a different rolodex, different customers.
It's hard to find that combo.
In this world, it is eat or be eaten... just the nature of the beast. Or maybe a bit of column of A [being acquired], a bit of column B [acquiring], that's the kind of world we live in. Growing and acquiring other companies, or growing and becoming a target for acquisition.
Mohney: Anything else you'd like to mention?
Mandelstam: The investment community always asks if this is going to be immediately accrue or if it will take a while [to make money]. It is immediate.