Comments on: Digium: Asterisk Accelerates As Economy Crumbles

By: The VAR Guy

The VAR Guy — Mon, 22 Dec 2008 17:33:16 +0000

Rurik: You’ve just identified another perfect storm… the convergence of Asterisk with Unified Communications. No doubt, that’s a hot trend in SMBs.

Keep The VAR Guy posted as you strive to fill the vacuum.

By: Rurik Bradbury

Rurik Bradbury — Sat, 20 Dec 2008 17:52:55 +0000

I have no doubt that Digium is profitable. Even though they only see a fraction of the total revenue from Asterisk, it’s still enough for a successful business.

To me, though, the success of Asterisk has been highly boosted by the poor strategy of the major PBX vendors. They try to lock in and bilk SMBs — and in doing so created a vacuum, a hunger for a cheaper alternative that Asterisk could address.

One thing we’re doing by offering Unison unified communications free (Unison site) is filling the vacuum created by overpriced MS Exchange, though we will probably see quite a few seats move over from Asterisk too as companies shift to unified communications.

Especially in 2009, enterprise software will have to be much more nimble in its business model and VARs will need to be creative with open source or free software if they want to avoid a serious contraction.

By: Bill Miller

Bill Miller — Fri, 19 Dec 2008 00:23:58 +0000

Digium is indeed profitable, recently marking our 27th consecutive quarter of revenue growth. The downturn is tough on all companies so we’re taking nothing for granted. But in a tight economy where organizations have to do more with fewer resources, Digium and other open-source companies offer an attractive, lower-cost way to do business.

By: Frank Earl

Frank Earl — Thu, 18 Dec 2008 23:59:09 +0000

Heh… In some ways being Publicly Traded is a BAD thing- worrying about that penny-per-share deltas in earnings can make you do very, very stupid things in the short to medium term. Worrying about the share-seller value (never confuse shareholder value with that stock price- that ticker value is the share-seller value…) causes you to let go of people when you don’t need to, makes you worry about things like getting out of innovative markets (Witness the BS with analysts, etc. saying Sprint should ditch it’s 4G plans because they’re “too risky”- never mind that the proposals doom the company in about a year or so’s time because they’re about to become yet another also-ran in the standard market people keep trying to push them into…). and so forth.

By: The VAR Guy

The VAR Guy — Thu, 18 Dec 2008 21:12:57 +0000

Tristan: No doubt, 26 consecutive profitable quarter growth sounds like good news. And it probably is. But also keep in mind: As a privately held company, Digium could be talking about:

1. EBITDA (earnings before interest, taxes, depreciation and amortization)?
2. Operating Income?
3. Net Income?
4. Something Else?

Again, The VAR Guy isn’t questioning Digium’s momentum. Kudos to them. But there’s a big difference between net income growth and EBIDTA growth.

On the one hand, Digium is fortunate to be privately held in a bad economy. The company can take a longer-term view and build its business rather than worrying about penny-per-share earnings reports each quarter. But on the other hand, it’s difficult for outsiders to get a true feel for Digium’s performance since the finances don’t have to be disclosed.

That’s not a criticism of Digium. The VAR Guy is part of a privately held company as well. And he isn’t opening his books to anyone … unless a buyer with a big bank account comes along.

By: Tristan Rhodes

Tristan Rhodes — Thu, 18 Dec 2008 20:38:02 +0000

Seek and you shall find:

“We have just celebrated our 26th consecutive profitable growth quarter…”

http://blogs.digium.com/2008/08/10/yet-another-record-quarter/

Does that answer your question? To me, that sounds like 26 profitable quarters, with each quarter being more profitable.

Tristan