Switchvox this week formally launched a reseller program designed to promote the company's open-source-based private branch exchange systems to small and midsize businesses.

The San Diego-based company has been marketing its Switchvox VOIP (voice over IP)-capable PBX systems since February. During that time it has signed more than 200 resellers, according to Josh Stephens, Switchvox's CEO.

Switchvox's systems start at $995 for a server running Switchvox software on top of Asterisk PBX, a Linux-based, open-source, software-only PBX application that includes VOIP capabilities as well as support for analog or digital phone lines.

In addition, Switchvox provides such value-added features as advanced call-reporting and statistics. Switchvox also provides a switchboard feature, a Web-based application that runs on a user's PC and emulates the features and buttons of a multi-line telephone.

"Through this interface, you can call numbers from your memory dial list, put calls on hold, park calls, transfer calls, view caller ID information, and conference calls, even if you are using an inexpensive handset that doesn't have these buttons or features," Stephens said.

The Switchvox product bundle can use analog lines, but most Switchvox deployments use VOIP.

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"We expect the Switchvox-type systems to have as much impact on the PBX manufacturers as the broadband voice providers are having on the carrier market," said Adam Bristol, president of Current-Concepts Corp., a telecommunications VAR in Lyme, N.H.

Bristol said open-source PBXes have generated considerable interest among his customers. He said he sold a 20-phone, two-server Switchvox solution in the past week. The product suits offices of eight to 100 users, he added.

Switchvox resides in the middle of Current-Concepts' roster of unified VOIP solutions. At the low end, the company resells a solution for the small office/home office market. The company also sells a high-end VOIP solution, which Bristol said isn't "terribly affordable for the small to midmarket business."

The Switchvox PBX supports a range of phones. Bristol said his company has used Switchvox with phones from Cisco Systems Inc. and Polycom Inc., among others.

Switchvox initially sold its PBX product online, but Stephens said he now sees resellers "as the future of our sales force."

He said Switchvox lends computer-oriented resellers a bridge into the phone system business, since VOIP uses technology they already are familiar with. "They understand how it works," Stephens said, adding that resellers experienced in setting up routers and diagnosing networks "will have no problem setting up a [Switchvox] system."

Next Page: Open-source consultancy debuts.

Open-Source Consultancy Debuts

An open-source software and systems integration consultancy debuted this week in Dallas.

OREV LLC, which does business as o*rev, advises organizations on the use of open-source technology. The company's services include business and technical consulting, research, technology evaluation, and project management.

Raven Zachary, o*rev's founder and principal, said the company will work with customers of all sizes, but believes a sweet spot exists in the small and midsize business market. "Large organizations generally have established IT consulting relationships that may include open-source capabilities," he added.

Zachary said he sees a major opportunity in the Dallas metropolitan area, describing o*rev as the only open-source consulting firm in the vicinity. But the company will work with customers beyond the Dallas environs and already has clients outside of Texas, he said.

As for larger consulting firms, Zachary said he sees them more as potential allies than business rivals.

"I'm not worried about the large consulting firms because, in general, we are selling to different markets," he said. Zachary said his company could partner with the larger companies or help them build their own open-source expertise.

"My competition is the other choice—going proprietary," Zachary said.

And while the company is not averse to working with, or recommending, proprietary solutions, its prospects lie with open source, he explained. "We are an open-source consulting firm, and our capacity for growth is tied to the growth of the open-source market segment," he said.

At this point, o*rev isn't building its consulting business around a defined set of open-source products. Zachary said his company will find specific opportunities as the market matures and competition increases. He did cite Compiere, an open-source ERP (enterprise resource planning) solution, as a product his company is evaluating.

Now, Zachary and o*rev are in the process of building a "core team" of open-source professionals and a global network of open-source experts. The latter will serve as a virtual work force and contribute skills on a project-by project basis, under the direction of the core team.

Prior to launching o*rev, Zachary was director of Internet technology for La Quinta Inns, where he implemented an open-source e-commerce solution. In 1998, he co-founded The Communicator for Rhapsody Project, which sought to bring the open-source Netscape browser, now Mozilla, to the Rhapsody Operating System, now Mac OS X.

Next Page: Report: Customers sour on offshoring.

Report: Customers Sour on Offshoring

Organizations engaged in offshoring IT show increasing levels of dissatisfaction with their providers.

That's among the findings of a DiamondCluster International Inc. global outsourcing study released on Tuesday. The Chicago-based management consulting firm reported that 51 percent of buyers surveyed prematurely terminated outsourcing contracts. In DiamondCluster's 2004 outsourcing study, 21 percent of buyers reported axing relationships.

Tom Weakland, who leads the outsourcing advisory services practice at DiamondCluster, said he was "shocked to see that number more than double over the past 12 months."

During the same time span, the number of buyers satisfied with their offshoring providers dropped to 62 percent from 79 percent, according to DiamondCluster.

Weakland noted that the surge in abnormal terminations and customer dissatisfaction becomes less surprising as one considers the following:

High turnover: "In places where offshoring is growing very rapidly such as India, there is a lot of competition to attract and retain the best talent and lots of … people switching jobs," Weakland said. For buyers, he added, turnover gets translated into vendors' inability to meet staffing commitments.

Supply-side glut: Many of the outsourcing firms now providing services around the world did not exist three to five years ago, Weakland said. Smaller companies lacking differentiation compete on price, and customers may fall into the trap of hiring a low-quality provider, he added.

Lack of experience in high-end services: Offshore outsourcers may lack experience as they move beyond commodity services such as application maintenance and into higher-end business process or managed services. Providers "don't have … the depth of expertise in those areas yet and, therefore, have people learning on the job."

DiamondCluster's 2005 Global IT Outsourcing Report is based on surveys and discussions with 210 senior IT executives at global 1000 companies and with 242 senior executives at outsourcing vendors in the United States, India and other countries. Copies are available by e-mailing requests to outsourcingreport@diamondcluster.com.

Arrow Offers NetApp Program

Arrow Electronics Inc.'s Enterprise Storage Solutions division on Tuesday kicked off a marketing program for Network Appliance resellers.

The NetApp solutions program, devised by Arrow with NetApp's approval, provides customizable components including direct mail, e-mail marketing and sales-solution guides, according to Arrow. The intent is to increase solution sales in IP-based storage, data protection and compliance, Microsoft Exchange environments, and Oracle database environments.

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