Fonality is jumping off one bandwagon and leaping onto another. The company previously positioned itself as an open source IP PBX phone system provider. But going forward, Fonality is pitching itself as a leading provider of cloud-based phone systems and unified communications for small business. The repositioning also includes a recent CEO change. Here’s a look at Fonality’s new strategy, and the implications for VARs.
At first glance, Fonality has enjoyed some solid success in the IP telephony market. The company’s Q4 2009 sales rose 20% vs. Q4 2008. Similarly, Fonality acquired 28% more customers in Q4 2009 vs. Q4 2008.
Still, Fonality has suffered from a split personality, The VAR Guy believes. On the one hand, Fonality positioned itself as an open source IP PBX provider. But on the other hand, Fonality struggled to escape from rival open source PBX provider Digium‘s shadow.
New Leader, New Message
By January 2010, Fonality transitioned its CEO title from founder Chris Lyman to NetSuite and Brocade veteran Dean Mansfield. Around the same time, Fonality started to de-emphasize open source terminology in its marketing messaging.
Sure, the company’s tagline remains “communicate openly.” But look at Fonality’s revised PR boilerplate:
- Before: Founded in 2004 and headquartered in Culver City, CA, Fonality is a leading developer and marketer of open source IP PBX business phone systems and unified communications solutions for small to medium-sized businesses. Investors include Draper Fisher Jurvetson, Intel Capital and Azure Capital Partners.
- After: Founded in 2004 and headquartered in Culver City, Calif., Fonality is a leading developer and marketer of cloud-based business phone systems and unified communications solutions for small to medium sized businesses. Investors include Draper Fisher Jurvetson, Intel Capital, and Azure Capital Partners.
Open Source Remains Inside
Despite some branding tweaks, Fonality still has a hand in the open source market. The company says its open source telephony platform, trixbox CE, is home to one of the world’s largest and fastest growing communities of open source telephony users, with over 200,000 live deployments and 125,000 new downloads each month.
Also, Fonality continues to partner with open source companies — including a growing relationship with SugarCRM.
Still, Fonality’s messaging to channel partners strongly emphasizes cloud and unified communications opportunities.
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Hey VAR Guy. Thanks for noticing! One big reason for the uptick in revenue has been the excellent VARs participating in our program. Stay tuned for even more exciting changes in the near future.
This company is on its way out if not bought. What was cool a few years ago is now a standard for competitors. Layoffs are the result in higher cash flow.
John: Who said anything about cash flow? VAR Guy reported increased sales. Please explain how layoffs would contribute to increased sales? Your information is erroneous, by the way. We have been hiring left and right the past 90 days.
Sean: Please keep The VAR Guy posted as you make additional channel moves. Our resident blogger appreciates the dialog.
John: The VAR Guy doesn’t have any information on Fonality’s cash flow. But thanks for reading. One request: When posting comments please disclose if you’re a Fonality partner, rival, customer, former employee, etc. Our resident blogger pushes for disclosure so that readers can get a feel for a person’s background and relationship to the topic at hand.
-TVG
It would be interesting to take a loot at VoipNow platform it’s already there, and has better interface
Well, VoipNow has been there for years and it was the first promoting the cloud. It’s not about interface, it’s about architecture and design. It will be impossible for Fonality to compete with VoipNow’s 4Grid, such things can not be changed overnight with a management shift. But well, “cloud” looks like a nice word so we should do it too.
Ugh…I know I shouldn’t bother to respond, but I can’t help taking the bait!
I didn’t read anything in the article that says Fonality is changing its architecture. It just makes note that we have changed our messaging. The fact is that Fonality’s hybrid-hosted architecture has been cloud-based since day one (before people were calling it “cloud”), and it began offering a fully hosted version of it’s product two years ago.
If VoipNow is so great (and I’m not saying it isn’t), why do you find it necessary to hijack threads about other companies to promote it? If you think your product is better than Fonality’s and feel compelled to tell everyone regardless of whether the forum is appropriate or not, at least do some research and base your argument on fact.
[...] The VAR Guy Talks Fonality and the Cloud April 20, 2010 fonalitymarketing Leave a comment Go to comments The IT channel’s most popular industry blog, The VAR Guy has mentioned Fonality in a recent blog posting, “Fonality Repositions: Goodbye Open Source, Hello Cloud”. [...]
Disclosure: I work at Fonality.
Fonality’s architecture has been hybrid-hosted since 2004. Meaning, we knew the cloud was coming 6 years ago, and we put our admin interface in the cloud from the beginning as a strategic move so that when the Internet caught up for enough customers, we could offer services. We provided an excellent premise-based product (which we still provide) for the first 5 years, and then judged (correctly) that the fully hosted market was matured and started offering services entirely in the cloud.
Now we are the only company that can convert a customer from one service to another (hosted to prem or vice-versa) because of an intelligent design many years ago.
None of our architecture changed – we just executed on the next part of our business plan. There are other parts of the plan on-deck if you will, which you’ll see in time.
[...] Fonality Repositions: Goodbye Open Source, Hello Cloud [...]