Right Place : Right Time OSS Telephony Adoption Trends

Economic Upheaval Worldwide markets still reeling from global economic crisis IT markets predicted to decline in 2009 Enterprise spending down 30% yoy Carrier spending down 20% yoy Public sector spending down 15% yoy 1. Thomas Wiesel Creative Innovation – Customer Satisfaction – Continual Quality Improvement 1

Economic Upheaval Buyers currently undergoing a ‘reset-tion’ Once spending begins to return, buyer behavior will change Buyers much more cautious Buyers looking for value ROI terms shortened Lower cost alternatives get more airplay Creative Innovation – Customer Satisfaction – Continual Quality Improvement

Economic Upheaval Markets contract as a result of lower cost alternatives gaining share Open Source-based alternatives gaining momentum and acceptance as a result of the economic turmoil and changes in buyer behavior Creative Innovation – Customer Satisfaction – Continual Quality Improvement

Open Source Software Adoption Trends

Function/Application Open Source Solution Operating SystemLinux Web ServerApache BrowserFirefox Telephony/CommunicationsAsterisk DatabaseMySQL Customer Relationship ManagementSugarCRM BackupZmanda Productivity SuiteOpen Office Collaboration SuiteZimbra Creative Innovation – Customer Satisfaction – Continual Quality Improvement

Open Source Trends Source: Savatar Creative Innovation – Customer Satisfaction – Continual Quality Improvement

The Market for Open Source Stand Alone Open Source Market will reach $5.8B by 2010/2011 (26% CAGR) 1 Tens of millions of new downloads of some version of open source software in IDC Creative Innovation – Customer Satisfaction – Continual Quality Improvement

Voice over IP Adoption Trends

VoIP – an upheaval survivor VoIP as a technology category will fair well in comparison to other technologies VoIP enables … Communications expenditure cost reductions Non-centralized work force structure Lower commute costs Lower facilities cost Mobile work force productivity Creative Innovation – Customer Satisfaction – Continual Quality Improvement

Total IP PBX Market Forecast Source: Frost and Sullivan 2008

IP Telephony Adoption IP PBX market will reach $7.9B by 2010 (21% CAGR) IP PBX penetration will still be less than 50% This year, IP line shipments will pass TDM shipments 3 Growth in IP Telephony (IPT) systems dominates PBX market segment 3 19% CAGR 2. Gartner Group 3. TEQConsult Group

Open Source VoIP Adoption Trends

Open Source IP PBX Downloads 2008 total worldwide downloads of Open Source PBX software – Total - 1,750,000 – Asterisk - 1,540,000 – Non-Asterisk - 210, total North America downloads of Open Source PBX software – 490,000 – North America is 28 percent of total downloads Source: Eastern Management Group Creative Innovation – Customer Satisfaction – Continual Quality Improvement

Open Source IP PBX Metrics Total 2008 North American Open Source PBX Business Telephone Systems – 86,872 Total 2008 North American Open Source Business Telephone System end points – 2,854,749 Average 2008 Open Source PBX Business Telephone System end points: – 32.8 end points Source: Eastern Management Group Creative Innovation – Customer Satisfaction – Continual Quality Improvement

2008 Total North America Business Telephone System Market Traditional PBX and Key System Lines 13,029,148 Open Source lines2,854,749 Total Lines15,883,897 Open Source as a % of Total18% Source: Eastern Management Group Creative Innovation – Customer Satisfaction – Continual Quality Improvement

2008 New PBX End Points 2008 Largest Suppliers End Points Open Source2,854,749 Nortel2,632,145 Cisco1,990,255 Avaya1,752,885 Mitel1,228,887 NEC1,222,578 Source: Eastern Management Group Creative Innovation – Customer Satisfaction – Continual Quality Improvement

2008 Business Communications Systems Market Share Source: Eastern Management Group Creative Innovation – Customer Satisfaction – Continual Quality Improvement

Asterisk Share of OSS IP PBX Market Based on most recent implementation Source: Eastern Management Group Creative Innovation – Customer Satisfaction – Continual Quality Improvement

2008 New PBX End Points 2008 Largest Suppliers End Points Nortel2,632,145 Asterisk2,512,179 Cisco1,990,255 Avaya1,752,885 Mitel1,228,887 NEC1,222,578 Source: Eastern Management Group Creative Innovation – Customer Satisfaction – Continual Quality Improvement

OSS IP PBX Vendor Market Share Open Source ManufacturersPercent 3 Com2% Aastra2% Critical Links2% Digium68% Fonality21% Intuitive Voice Technology2% Nortel (including Pingtel)3% SimiComm<1% Source: Eastern Management Group Creative Innovation – Customer Satisfaction – Continual Quality Improvement

How does Open Source Telephony get adopted by end-users? Creative Innovation – Customer Satisfaction – Continual Quality Improvement

How end users benefit from OSS IP PBX (based on OSS) Media Gateways (based on OSS) Soft Switch (based on OSS) Buy a complete OSS-based product OSS Software Commercial Software Hardware Platforms Training Services 3 rd Party Add-ons Build you own – or have an integrator build a solution for you Tool Kit Components

Lo ….…. End-User Technical Competency ….… Hi Packaged OSS Based Solutions Custom Engineered OSS Solution Market Needs vs. End User Technical Skill

Small Business Complete OSS-based Products Medium-sized business Blend of both Large Enterprise Custom Application Components Market Needs vs. Size of Business

The OSS IP Telephony ‘Long Tail’ Turn-key OSS-based products Custom-built OSS-based solutions Creative Innovation – Customer Satisfaction – Continual Quality Improvement Demand / Revenue STD IP PBX

Digium Product Relationships OSS Asterisk V1.4OSS Asterisk V1.6 Turn-Key Products (Switchvox 4.0) Commercial Edition Version C.x Testing and Qualification Turn Key Products (Switchvox 5.0) Commercial Edition Version D.x Testing and Qualification Asterisk Development

OSS Enables Customizable Solutions The holy grail for communications solutions Tightly integrate communications with existing business processes – Reduce cost – Improve productivity Enabled through – Software-based communications engines – APIs and/or custom development Creative Innovation – Customer Satisfaction – Continual Quality Improvement

Summary Next months will be challenging VoIP is an investment that pays a tangible ROI - today Open Source solutions are gaining popularity – Lower cost – No vendor lock-in – Easily customizable OSS + VoIP = Right Place, Right Time Creative Innovation – Customer Satisfaction – Continual Quality Improvement

Questions & Discussion Digium - The Answer is Open Creative Innovation – Customer Satisfaction – Continual Quality Improvement