Telecom cloud, Mergers and Acquisitions, Mergers and Acquisitions, Content

Asterisk PBX Software Pioneer Digium Acquired for $28 Million


Sangoma Technologies Corp. (STC) has acquired unified communications, phone system and open source PBX pioneer Digium. The deal, valued at $28 million, is expected to close this month. The combined companies will have about 300 employees.

Digium founder Mark Spencer created Asterisk (an open source alternative to expensive PBXes) in 1999. The code was designed to transform a PC into a communications server or voice over IP (VoIP) phone system.

Similar to how Linux powers open source servers, Asterisk emerged as an open source framework for building communications applications -- including IP PBX systems, VoIP gateways, conference servers and other custom solutions.

Digium, based in Huntsville, Alabama, evolved to build a range of commercial products. And the executive team expanded to included more traditional networking industry veterans. CEO Danny Windham and some of his lieutenants are veterans of neighboring Adtran, for instance.

Digium Product and Revenue Mix

Digium's current product portfolio includes:

  • A cloud-based UCaaS (Unified Communication as a Service) platform;
  • the Switchvox premise-based phone system;
  • IP phones; and
  • Asterisk software and connectivity products.

Those products and services are available via Digium's channel partner program.

Digium's revenues were $30 million with a net loss of $4 million in 2017. EBITDA (earnings before interest, taxes, depreciation and amortization) was breakeven for Q2 2018, the companies say. The figures reveal just how challenging it can be to scale an open source company's revenues -- especially in the cloud era.

Most of Digium's early products ran on-premises. The company made a more recent shift to cloud-oriented Asterisk systems. Roughly 40 percent of Digium's sales involve recurring revenues, but the UCaaS (unified communications as a service) market is filled with fierce competition.

In contrast, Sangoma's annual revenues are roughly $57 million, and EBITDA is roughly $6 million. The company announced those preliminary figures for fiscal 2018 in early August. They don't include the Digium figures.

Rallying Asterisk Developers, Open Source Advocates

Both Sangoma and Digium are working hard to assure developers and partners that the Asterisk open source ecosystem will continue to prosper under Sangoma's ownership.

Sangoma President and CEO Bill Wignall welcomed Digium staff, partners and customers into the Sangoma family. He also specifically addressed the open source ecosystem, stating:

"To the Asterisk community, I would like to reassure you that Sangoma recognizes the value of Asterisk and is committed to keeping it open source. We will continue to invest in its development and to seek input from the broad base of developers that has led to its outstanding success."

Digium Founder Mark Spencer

Added Digium Founder and Chairman Mark Spencer:

"Given the involvement of both companies in the history of Asterisk dating back to its creation in 1999, Sangoma is the natural home for the Asterisk project. For many years both companies have had teams working to improve Asterisk and make it more accessible. I believe Sangoma's commitments should reassure the Asterisk community that Sangoma is dedicated to the project. I look forward to seeing the results of tighter collaboration between those teams, and the benefits to the community, now that they will be part of a single company."

Among the key next moves to watch: AstriCon, a conference for Asterisk partners and developers, is scheduled for October 9-11 in Orlando.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.