Nortel picks up open source software PBX partner

Eighteen months ago, Nortel Networks put together a unified communications software package for server manufacturers to sell as a turnkey solution for small and mid-sized businesses.

Dubbed the Software Communications System 500 (SCS 500), the bundle included Pingtel Corp.’s open source PBX software as well as a number of other pieces. Having signed IBM and Dell, which install and sell the bundle on Linux-based iServer and Optiplex servers respectively, Nortel has now decided to buy Pingtel and bring its expertise in-house.

The Toronto telecom company said Wednesday it has bought Pingtel from Bluesocket Inc. of Burlington, Mass., whose business has become focused on wireless infrastructure, for an undisclosed price.

Paul Templeton, Nortel’s vice-president of business development, said the purchase will help his company’s strategy of finding more server manufacturers to carry the SCS 500. “We completed this acquisition because we’re beginning to get some significant business on the back of the IBM and Dell relationship,” he said in an interview.

With organizations taking a more IT- centric approach to delivering unified communications, Nortel felt it important to bring Pingtel’s technology inside the firm.

Pingtel’s main product is SIPxchange ECS, a full featured IP PBX for Linux with integrated voice mail, automatic call distribution, multiple auto attendants and Web-based system configuration and management tool.

The voice mail system leverages 30 virtual ports and delivers up to 300 voice mail boxes. It provides basic unified communications, including presence. The company says a single server can support up to 1,000 users per location. Among Pingtel’s biggest customers is, said Templeton.

Pingtel also sells three turnkey solutions, either tower or rack servers, that include gateways and firewalls. Templeton said Nortel will support existing buyers of those appliances, but was vague on whether his company will continue selling them.

“There’s a bit of detail to be worked out in terms of what of the existing Pingtel business models we will continue to support,” he said. But he stressed that Nortel’s preferred strategy for selling the SCS 500 will be through deals with other server makers.

Two industry analysts think the deal is smart. Jayanth Angl of London, Ont.,-based Info-Tech Research said it will help Nortel compete against systems built around the open source Asterix IP PBXs from companies such as Digium Inc. and Fonality. “The open source software-based approach is very easy to deploy, manage and integrate and is something proven to work in the SMB space.”

Elizabeth Herrell of Forrester Research noted in an interview that Nortel has been increasingly supporting open source software. “It seems that Nortel understands the market demands for more open source, less proprietary systems,” she said.

On the other hand Zeus Kerravala of the Yankee Group was “quite surprised” at the deal, wondering what this means for Nortel’s partnership with Microsoft to sell unified communications bundles. “My thought was Microsoft and Nortel would be building this stuff together,” he said. More importantly, he argued, the ability of product to succeed as a software platform – as SCS 500 is – depends on the size of its independent software vendor community.

Micrsoft’s base of ISVs is huge, Pingtel’s is small. So Nortel will have to build it own ISV community, which isn’t easy. Avaya, Kerravala noted, has been trying that for years.

While unified communications from most vendors today are based on the SIP protocol, she said, many of their extensions are proprietary. Nortel’s move will help better differentiate itself from competitors, she concluded.

Templeton said the SCS 500 solution provides all of the “classic” features of a PBX while is integrated into an IT environment so can be converged with desktop or server software with communications. So IBM, for example, emphasizes in its marketing that the solution integrates with its Lotus Notes and Sametime collaboration suites as well as Microsoft Outlook and Exchange e-mail and calendaring applications.

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