NEWS FLASH Sangoma Acquires Digium

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Yeah, not sure about the future of Asterisk in Sangoma's hands...

I've been evaluating and watching the FusionPBX project (based on FreeSwitch) occasionally, but I'm going to start formally working out migration paths and what tasks need to get done to make a move like that. It's actually open-source, from root to leaf.

Something to be knowledgeable about anyway, but now it seems like a good time to push that toward the top of my priority lists.
 
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Johann

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Digium was losing 4 million last year.
I guess Sangoma came in for the rescue, didn't want Asterisk to die.
 
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chris_c_

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Congrats to Digium and Sangoma.
I gotta admit I didn't expect this merger/acquisition, as I didn't realize Digium was losing $4M per year, but I guess it makes sense, it's a vertical market consolidation!
Question, will Mark Spencer, and other the key Digium team members and Asterisk dev/architect contributors, become part of Sangoma? Work in Greater Toronto Area, Canada? Remotely work in Huntsville Alabama the spiritual origin of Asterisk?
 
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wardmundy

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A number of you have privately reached out for my opinion on the Sangoma acquisition of Digium so I thought I'd just post a few thoughts for everyone to consider. I am hopeful but anxious about the acquisition primarily because of financial considerations that have little to do with how well the Digium and Sangoma/Schmoozers will work together. The compatibility component is the easy part of this marriage. Here's why.

Over the past 5 years, Sangoma has had an average annual net operating loss of approximately $400,000. They actually have shown an operating profit over the past 4 years. Last year, they almost hit $1 million ($800,195 to be exact) thanks in part to the glowing Schmooze/FreePBX financials. Now Sangoma has increased its debt from $4 million to $25 million which they estimate will cost them at least 6% interest annually. That's $1.5 million just in first-year interest for the math challenged. The press release indicates they plan to pay off the loan in 7 years. That means they'll need to come up with an additional $3.5 million annually to meet the 7-year payoff projection. Adding the interest and principal payments, that comes to about $5 million the first year, $4.7 million the second year, and $4.5 million the third year to stay on track to meet their target. Keep in mind that Sangoma also reported a $4 million dollar loss by Digium as part of the purchase agreement. Thus, if the current Digium infrastructure remains in place, that could translate into roughly $9 million of added expense for Sangoma in the coming year.

If you're a current Digium employee, I'd suggest you dust off your resume promptly. There will need to be massive layoffs somewhere in order to meet these projected targets. HINT: It's not going to be in the Schmoozer Dept. which appears to be the most profitable component in the Sangoma arsenal. With the exception of a handful of talented programmers in the Digium stable, I cannot help thinking pretty much everyone else will be gone by Groundhog's Day. Time will tell.

Update: Sangoma's September 5 press release announcing the closing of the Digium deal projects that next year's revenue will almost double from $57 million to $100 million after acquiring Digium, a company that recently lost $4 million. One can only hope, but time will tell.
 
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Steve Davies

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Congrats to Digium and Sangoma.
I gotta admit I didn't expect this merger/acquisition, as I didn't realize Digium was losing $4M per year, but I guess it makes sense, it's a vertical market consolidation!
Question, will Mark Spencer, and other the key Digium team members and Asterisk dev/architect contributors, become part of Sangoma? Work in Greater Toronto Area, Canada? Remotely work in Huntsville Alabama the spiritual origin of Asterisk?
I’m sure the key contributors to Asterisk will be safely employed. Switch Vox does well.

Mark of course hasn’t touched Asterisk code for 10 years at least.

Steve
 

RSTech

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A number of you have privately reached out for my opinion on the Sangoma acquisition of Digium so I thought I'd just post a few thoughts for everyone to consider. I am hopeful but anxious about the acquisition primarily because of financial considerations that have little to do with how well the Digium and Sangoma/Schmoozers will work together. The compatibility component is the easy part of this marriage. Here's why.

Over the past 5 years, Sangoma has had an average annual net operating loss of approximately $400,000. They actually have shown an operating profit over the past 4 years. Last year, they almost hit $1 million ($800,195 to be exact) thanks in part to the glowing Schmooze/FreePBX financials. Now Sangoma has increased its debt from $4 million to $25 million which they estimate will cost them at least 6% interest annually. That's $1.5 million just in first-year interest for the math challenged. The press release indicates they plan to pay off the loan in 7 years. That means they'll need to come up with an additional $3.5 million annually to meet the 7-year payoff projection. Adding the interest and principal payments, that comes to about $5 million the first year, $4.7 million the second year, and $4.5 million the third year to stay on track to meet their target. Keep in mind that Sangoma also reported a $4 million dollar loss by Digium as part of the purchase agreement. Thus, if the current Digium infrastructure remains in place, that could translate into roughly $9 million of added expense for Sangoma in the coming year.

If you're a current Digium employee, I'd suggest you dust off your resume promptly. There will need to be massive layoffs somewhere in order to meet these projected targets. HINT: It's not going to be in the Schmoozer Dept. which appears to be the most profitable component in the Sangoma arsenal. With the exception of a handful of talented programmers in the Digium stable, I cannot help thinking pretty much everyone else will be gone by Groundhog's Day. Time will tell.
Really, people were asking your opinion or you chose to have another go at Sangoma as you often seem to in many forums! I think you seem to miss a couple of key business aspects. 1) Profit from the last 2 acquisitions probably haven't been fully realised and so you don't know how that will alter long term profitability. 2) With a merger, lots of cost savings can be made from internal systems, change of business practices etc. not just having a major cull of staff.

The ink is barely dry on them signing an agreement and you are already trying to scare monger in the community. Have you ever considered it might be time for you to retire from being an old woman and be more constructive and less critical. You never know, say something positive and it might feel good :)
 

Johann

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A number of you have privately reached out for my opinion on the Sangoma acquisition of Digium so I thought I'd just post a few thoughts for everyone to consider. I am hopeful but anxious about the acquisition primarily because of financial considerations that have little to do with how well the Digium and Sangoma/Schmoozers will work together. The compatibility component is the easy part of this marriage. Here's why.

Over the past 5 years, Sangoma has had an average annual net operating loss of approximately $400,000. They actually have shown an operating profit over the past 4 years. Last year, they almost hit $1 million ($800,195 to be exact) thanks in part to the glowing Schmooze/FreePBX financials. Now Sangoma has increased its debt from $4 million to $25 million which they estimate will cost them at least 6% interest annually. That's $1.5 million just in first-year interest for the math challenged. The press release indicates they plan to pay off the loan in 7 years. That means they'll need to come up with an additional $3.5 million annually to meet the 7-year payoff projection. Adding the interest and principal payments, that comes to about $5 million the first year, $4.7 million the second year, and $4.5 million the third year to stay on track to meet their target. Keep in mind that Sangoma also reported a $4 million dollar loss by Digium as part of the purchase agreement. Thus, if the current Digium infrastructure remains in place, that could translate into roughly $9 million of added expense for Sangoma in the coming year.

If you're a current Digium employee, I'd suggest you dust off your resume promptly. There will need to be massive layoffs somewhere in order to meet these projected targets. HINT: It's not going to be in the Schmoozer Dept. which appears to be the most profitable component in the Sangoma arsenal. With the exception of a handful of talented programmers in the Digium stable, I cannot help thinking pretty much everyone else will be gone by Groundhog's Day. Time will tell.
Do you think the acquisition was a somewhat desperate move to rescue Digium?
After all they provide a core component of Freepbx and Sangoma couldn't watch Digium going bankrupt.
 
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ou812

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I moved to VitalPBX (great system) to get away from Freepbx but now not sure what the future will bring, I guess it's wait and see. Maybe it's time for PIAF to revisit FusionPBX, as a test yesterday I fired one up with there provided script on a Debian server and it was done in 7 min, set a new tenant/domain, extensions, gateway, outbound routes & inbound routes all very simple, now just time to play with the rest.

Gary,
 

wardmundy

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I moved to VitalPBX (great system) to get away from Freepbx but now not sure what the future will bring, I guess it's wait and see. Maybe it's time for PIAF to revisit FusionPBX, as a test yesterday I fired one up with there provided script on a Debian server and it was done in 7 min, set a new tenant/domain, extensions, gateway, outbound routes & inbound routes all very simple, now just time to play with the rest.

Gary,
Funny you'd mention that...

 
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krzykat

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Here is my concern: I feel as if some pieces of FreePBX that have been open have seen neglect of updates when there has been a commercial module in place (examples are OSSEPM and Fax to extensions).
My fear is that FreePBX becomes more closed, and that the open-sourced asterisk starts to cater solely to the needs of FreePBX with options that will only benefit it and the other implementations of asterisk interfaces such as Isabelle, Fusion, and the like will get crushed. What about 3CX and other commercial products that directly compete with FreePBX? If I were them, I would be freaking out and very worried.

Then again, Red Hat has done wonderful things with Centos, so perhaps I am being a bit paranoid (I hope).
 

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