The Channel

SIPfoundry Founders Go Commercial with eZuce

By Paula Bernier, Executive Editor, IP Communications Magazines  |  October 01, 2010

This article originally appeared in the October 2010 issue of INTERNET TELEPHONY

The guys who established SIPfoundry have gone commercial. Their new company, eZuce, aims to deliver all-software-based telephony solutions akin to what Microsoft provides. The twist is that the eZuce solution will offer the added benefit of being open source and its go-to-market will be 100 percent indirect.

Martin Steinmann (News - Alert), eZuce’s co-founder and president, says his company delivers the first open software UC solution to hit the core of the enterprise market. Asterisk was in SMB market for a long time, and analysts in 2008 said open source had reached about 18 percent share of the SMB market, he notes.

“We are now taking this model into the core of the enterprise market,” he says. “We continue where Asterisk (News - Alert) left off. I think we are the only credible successor to an open source product in the broader UC market.”

The privately owned company, headquartered in Newburyport, Mass., was founded in February by Steinmann and Jerry Stabile. The company got a seed round of financing in May, and expects to do a Series A round this fall.

“eZuce is new company, but it’s not your typical startup,” says Steinmann. “We are new, but we start out with a mature product, the product that is in the market, that is in the channel, that is referenceable, that is known to work, and is a really serious solution that competes in the mid enterprise market.”

The idea is to deliver and support a complete solution that replaces legacy PBXs like Nortel (News - Alert) CS-1000s, Meridian-1, Aura products and Cisco CallManager. The eZuce solution, which in addition to telephony addresses video, instant messaging and presence, also will compete with the Microsoft offer, but Steinmann spent more time emphasizing the fact that Microsoft’s all-software PBX (News - Alert) model is the way to go and pushing the message that it poses a significant threat to the traditional PBX outfits, than discussing eZuce’s strategy to challenge Microsoft or Asterisk.

“We think the software model and open source economics really unhinge the incumbents’ model,” says Steinmann. “I’ve been inside Nortel. I’ve run the P&L. I know how it looks, and the price differential between what Microsoft introduced based on a software model. And that gets compounded as you add the open source economics into this. [So it] is so vastly different from the current established pricing model in this PBX market that the P&Ls of incumbent vendors just can’t compress to that level.

“And then we deliver what customers and partners really want,” he continues, “and that is an IT application, communications as service, and the solution that comes in at a significantly lower cost.”

Steinmann adds that Avaya’s (News - Alert) purchase of the Nortel assets is creating an opportunity for a new player like eZuce to get a foot in the door with both customers and channel partners.

 “I think the opportunity, to a certain extent, specifically at the operating level, created by the Nortel-Avaya merger was Nortel’s next-generation solution and migration path for the Meridian-1 product was simply not a fit for Avaya,” explains Steinmann, who was Nortel’s general manager of SMB voice prior to its acquisition by Avaya.

“Back in June of 2009 we announced at Nortel that the technology that open UC and eZuce are based on really is the official migration path from a Meridian-1, CS-1000 hybrid system to an all- IP, all-SIP, IT application,” he says. “Avaya instead, in our view, proposes what I would call a lateral migration to Aura. It’s a forklift replacement of an old PBX, and you put in another old PBX. I think a lot of channel partners initially were really interested in that then, but after a little while looking at it more deeply realized what this really is.”

While Nortel outsourced all services revenue to the channel, Steinmann adds, Avaya runs a significant services operation with trucks and feet on the street, so that business competes with what Nortel partners have been doing on their own.

As a result, eZuce is stepping in, and had expected to announce its partner program late last month. In a late August interview, Steinmann told INTERNET TELEPHONY magazine that eZuce was working with “very major channel partners,” some of which have been significant Nortel partners in the past. He says eZuce expects to partner both with MSPs and folks on the traditional voice and VAR side.

Edited by Tammy Wolf