Executive Suite Fonality’s Chris Lyman

With Rich Tehrani

Rich Tehrani’s Executive Suite is a monthly feature in which leading executives in the VoIP and IP Communications industry discuss their company’s latest developments with TMC president Rich Tehrani, as well as providing analysis on industry news and trends.

The open source market has been steadily gaining momentum as users and VARs alike begin to understand the value that general access to code presents, both in terms of costs and new and innovative applications that can be built in-house or by third-party developers.

In addition to fostering development and cooperation - coopetition, perhaps - open source products, by nature, are designed to work with any number of hardware and software solutions without requiring significant work. In doing so, they also allow customers to choose their own vendors of phones and other peripherals, unlike proprietary platforms, which require the use of certain products in order to ensure reliability.

Despite never having interviewed a janitor for his Executive Suite, Rich recently sat down with to talk about open source with Fonality CEO/janitor Chris Lyman. Chris offered his candid thoughts on the industry as a whole and on what Fonality is doing, along with an explanation of why he refers to himself as CEO and janitor.

RT: Chris, please, share with us a little bit about that title of yours.

CL: You know, that’s a title that I’ve had at my last two start-ups. Each of them has been over a hundred employees, so it’s not as if we didn’t have a janitor, but I guess I just realize that people seem to think the bigger your company gets, the more powerful you get and the more everybody serves you.

What I’ve actually realized is, as the company grows, you start to serve the company more, and your role shifts to solving really hard problems and cleaning up messes. So, there are many days when I come in with the title of CEO, but what I’m really doing is cleaning messes, and those messes go all the way from architecture messes to personnel messes to, who knows what - when no one flushes the toilet in the bathroom, I’m going to do it. So, I do feel like a janitor, and I remind myself that no job is too small, and no mess is too dirty for me to clean up. It keeps me humble.

RT: What does that attitude do for you and your corporate culture?

CL: It reminds everyone, with every email I send that says “CEO and janitor,” that I have an open door, and that I’m not afraid of messes and I’ll get my hands dirty. Maybe a better title would be janitorial supervisor, because I don’t necessarily clean all the messes up with my own hands, but I’m not afraid to look at a mess and clean it up and talk about it. As I said, it fosters humility.

Every company has a tag line, right? Fonality’s is, “communicate openly”. It’s a double entendre, of course, because we’re an open source-based communication company, but we also try to be really honest and direct, and have open door policies with each other.

RT: Why did you start Fonality?

CL: It’s one of those things where you never know why you’re starting a company at the time, but you look back later and it becomes clear, and you’re are able to tell an interesting story about how you got there.

My last company was a web hosting company - I think it was the seventh largest web hosting company in the U.S. - a data company with about 800 servers in an 8,000 square-foot facility, which I sold to a publicly-held telephone company.

The mixture of my data background and the telephone company sort of segued me into IP telephony. That’s why I ended up choosing Fonality, whose focus is providing affordable, easy-to-use PBXs for small businesses. Small business has always been my focus, even back when I had a hosting company. I was selling $20 and $50 per month hosting; I wasn’t Exodus selling $5,000 per month hosting.

So, my whole career, from my very first start-up, which was as a computer consultant servicing small businesses, has been focused on providing small businesses technology solutions, and that’s what Fonality’s about, affordable software PBX’s for the small business market.

RT: What pains do you eliminate for your customers?

CL: Honestly, there’s a price problem with phone systems, which impacts smaller businesses most. The leaders out there - Avaya, Nortel, Cisco - are pillaging small businesses in terms of cost, and small businesses are held hostage by forty and fifty thousand dollar price tags for basic phone systems. It’s a rip-off, and we’re there to solve the price algorithm.

Now, to do that, we also have to solve the ease-of-use algorithm. Phone systems are so incredibly hard to install and maintain, and what would end up happening is that the Avayas and Ciscos end up charging $5,000 to put in a phone system, and $150 per hour for maintenance, moves/adds/changes, and so on. To change the price continuum, sure, we have to make it cheaper overall, but we have to make the maintenance cost go down as well, and that’s an ease of use problem. So, we’re both attacking price and ease of use at the same time - and ask TiVo, that’s not easy to do.

RT: Could you tell me a little bit about your newest product, Trixbox Pro, and how it fits in with your product line?

CL: Trixbox Pro is a really cool project. Let me explain why it’s different from what we’ve been doing with PBXtra, which has been an affordable, easy to use PBX, that’s really sold as an appliance with the software included. With PBXtra, you get a UPS box at your door one morning, and it reads, “What can Brown do for you?” You open the door, and there are actually two boxes - one with our server with installed software, and the other with your phones, all preconfigured. That’s PBXtra, and it’s been a great direct product.

However, it has not been well received by the data VAR community, until now. The education cycle in telephony is over, and the data VARs understand they can now monetize IP telephony, so they’ve come to us and said, “Yo, Fonality, we’re smart enough to build servers; we’re smart enough to buy IP phones from VoIP Supply and configure them ourselves. Give us the software; let us monetize the hardware; let us have hardware on the rack so that, when a customer’s phone goes down, we can we can drop it off without having to order it from you.”

So, with Trixbox PRO, we abstracted the software from the hardware. Think of PBXtra like Macintosh. It works great because the software has been wedded to the hardware. What we had to do was take a Microsoft Windows approach. Microsoft had to abstract software from hardware so that it could run on anybody’s hardware, and that’s exponentially harder to do. It’s very unsexy work, but it has to be done to open yourself up to all different types of set phones, servers, and interface cards.

So, Trixbox Pro is a software-only PBX. It’s got a couple of really cool advantages over PBXtra and really the whole industry. We developed a base version for offices with fewer than 20 users, and we made it free. Call me dot-com crazy, but we’re gambling that if we get in hundreds of thousands of businesses for free, as they grow up and become bigger businesses, they’ll buy the enhanced versions of Trixbox Pro, and I think it’s working. We launched about a week ago and we have about 2,000 downloads a day. If there are ten users on the end of each installation, that might be as many as 20,000 new users per day.

RT: In terms of your other launch, trixNet, can you give us an update on what that is and how it’s done?

CL: trixNet is very cool; it’s basically a free calling service for businesses worldwide that allows calling between users - the key is that it is done with their existing phone numbers. To that, most people’s reaction is, “Huh? How can my AT&T business call your French Telecom business for free?”

Basically, what we’ve done is create a directory service that is part of Trixbox Pro - even the free edition, effectively making all Trixbox users trixnet members. When two members place calls between one another, Trixbox Pro performs a quick check with trixNet to see if the number is part of trixnet. If it is, it makes that call free point-to-point, bypassing both carriers, yet still using both carriers’ phone numbers.

RT: It’s almost the way email might work?

CL: It’s the way email might work, but it’s front-ended by regular phone numbers, so email typically tends to work with really funky SIP URI’s, kind of like long email addresses - these hybrid hard to remember items. What we wanted to do was make trixNet not change user behavior. So, I’m on an IP or an analog or a softphone, and I want to dial your number just the way I always have, and that call needs to be free.

RT: How do you feel that the open source world has changed the telecom market?

CL: So open source questions for me are always a little scary, because open source zealots are usually listening and ready to sort of slay me on their blogs if I say anything wrong, and I always do. I’m actually not a big believer that open source innovates. I’m a big believer that open source replicates and integrates, which, I guess, creates a little innovation on its own, but let me explain.

Open source typically replicates the closed source software model, and does it for free or very cheaply. So, you can look at most open source projects: My ASCII replicates closed source databases; Asterisk replicates Cisco and Avaya’s closed source software. But what happens in this process of replicating is they use open exchange standards and what happens with those standards is enforced integration. So, as they’re creating this project and are using these standard protocols, like SIP, different other open source or even closed source projects using those same standards start to snap into place, and you start to get unified communications on the back end. So, open source, in the process of replicating, creates integration, which makes information flow seamlessly through different software applications, and which does start to create some innovation. But, the short answer is what open source does is cost.

Open source gets you a similar solution for less, but as a by-product of doing it in an open source way, it creates integration. So, when a key director, who puts an open source product in, will naturally have a better rate with other software products he’s using and create both compound in savings and compound in knowledge sharing. I think anytime you increase knowledge sharing and decrease cost, you’ve done a good thing for the world. IT

You can read more of what Chris had to say online at www.tmcnet.com or listen to the podcast in its entirety at www.tmcnet.com/1124.

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