Sangoma Revs Up Growth via Turnkey Solutions, Global Expansion

Feature Story

Sangoma Revs Up Growth via Turnkey Solutions, Global Expansion

By Paula Bernier, Executive Editor, TMC  |  May 22, 2012

This article originally appeared in the May 2012 issue of INTERNET TELEPHONY magazine.

Sangoma Technologies (News - Alert) Corp. is undergoing an extreme makeover in an effort to supply more customers with more innovative products more quickly. Building on its reputation for product quality, excellent service from highly competent engineering teams, and strong relationships with partners and customers, the company aims to drive renewed growth. The makeover was initiated by industry veteran Bill Wignall when he joined Sangoma as president and CEO in late 2010.

“When taking over the reins at Sangoma, among my top priorities were the definition of a crystal-clear corporate strategy, the establishment of a strong foundation to scale upon, and the need shake things up in order to fuel expansion,” said Wignall. He implemented a three-step process designed to energize the company and propel growth.

Wignall began the process with a comprehensive operational rebuild touching every corner of the company, intended to provide that foundation to underpin its growth. This included re-structuring the team (six of the seven executives and half the staff are new to Sangoma or in new roles), adding industry veterans to the senior staff, re-tooling the engineering teams to focus more on new products and less on sustaining work, and re-launching their entire marketing and sales efforts. The next step was setting a crystal clear strategy for the company. Sangoma is now strategically focused on growth by delivering more products to its customers, targeting global markets (Sangoma now has offices in six countries across North America, Europe, Asia and Latin America), and addressing needs across three customer segments: enterprise users, OEM customers, and carriers. And finally, the third step in Sangoma’s re-build was corporate development, in order to use acquisitions to augment organic growth.

“Our new strategy, stronger team, focus on innovation, broadened product portfolio, and geographic expansion are making Sangoma into the go-to company for network connectivity solutions – well beyond the board company we were just one year ago,” explained Wignall. “We can now deliver any-to-any connectivity between the growing universe of clouds, devices, networks, people, services and applications that permeate the communications landscape. We work hard every day at Sangoma to ensure we are focusing on those things that matter to our customers and distribution partners. This has involved a tremendous amount of change for the people here at Sangoma in a very short period of time, and I’m so proud of the team for how well they’ve adapted.”

As Wignall mentioned, Sangoma built its reputation as a supplier of voice and data boards, a business in which it’s been the leading player for nearly three decades. And while the company is committed to continue selling and investing heavily in its board business, Sangoma recently set a course to expand dramatically its product portfolio.

The company moved that strategy forward last year with its purchase of U.K.-based VoIP gateway appliance outfit VegaStream. In announcing the deal in August, Wignall said: “For years, Sangoma has provided the industry's leading portfolio of TDM to IP boards for use inside servers, and we will continue to dominate that space. However, external gateways, which provide much of the same functionality and can be virtualized and used in cloud-based solutions, but reside outside the server as their own appliance, are becoming increasingly popular. We simply want to offer our customers both options.”

Wignall told INTERNET TELEPHONY that media gateways had been on Sangoma’s product roadmap prior to the VegaStream deal. In fact, Sangoma had started work on a media gateway itself, he said, but it would’ve taken more than a year to get a homegrown product to market, so in the end the company looked to acquire a product in this category. That product is Sangoma’s Vega VoIP Gateway (News - Alert) series that provides interconnection of networks and technologies.

The Vega products represent just one element in a broad product portfolio that is rapidly expanding through the company’s new strategy to launch six to 10 new products annually. That’s up from the single annual product launch schedule it followed in the past.

“I got a lot of crazy, skeptical looks when we first established this new product roadmap and release schedule,” Wignall said. But this kind of a schedule makes perfect sense, he indicated, given the fact that Sangoma is now “ruthlessly focused on innovation.” Sangoma already has proven it can deliver on this aggressive new product rollout schedule, he said, explaining the company has introduced five new products in the last two quarters. 

For example, Sangoma now offers the NetBorder SS7 VoIP Gateway appliance, (supporting a wide range of VoIP and wireless codecs and call routing via XML scripts,) the W400 GSM Board (to enable selective call routing in markets with disparate mobile-to-mobile tariffs,) a T3 Multiplexer appliance, a Microsoft (News - Alert) Lync-certified software-only gateway, transcoding boards (the first such devices on the market, further evidence of the innovation focus), and Call Progress Analysis software for contact centers. And that’s just a sampling of what Sangoma has recently delivered.  

In a March 26 interview with INTERNET TELEPHONY, Wignall said Sangoma will continue to deliver at this pace during 2012 with new products including an STM-1 mux (the company’s first fiber product), an expanded Vega offering (with gateways for smaller network deployments), and a 16-span board that builds off of Sangoma’s eight-span, 240-session-capable PRI T1/E1/J1 interface board technology, said Wignall, adding that in itself was a huge innovation in the marketplace that has just now been matched by the competition three years later.

Sangoma also has IP-to-IP products, video-based products, and even a social networking solution in the pipeline for 2012. This speaks to the point that the company aims to address customer requirements on a wide variety of fronts – with both hardware and software; video and voice/data applications; wireline and wireless infrastructure; electrical and optical; open source and proprietary efforts; and TDM and IP solutions, or a mix of the two. The common thread, according to Wignall, is that Sangoma products connect networks together, enabling customers to integrate new solutions and technologies with their existing infrastructure in a way that minimizes interruption and keeps costs manageable.

This focus on new products in no way diminishes Sangoma’s commitment to its existing base of open source developers and open source telephony projects. Sangoma always has and will continue to support, sponsor, contribute code to, and advocate for the OST community. It was one of the first supporters of Asterisk (News - Alert) (in fact Asterisk ran first on Sangoma hardware), is a big advocate of FreeSWITCH, and engaged with virtually every OST project out there.

The new growth strategy includes more focus on key international markets. Its strategy of putting more of its own people, and forging new distribution deals, abroad is aimed at helping Sangoma deliver solutions and grow its own business in the markets with the greatest growth potential. Sangoma recently announced distribution deals with new partners across Europe, Asia, Latin America and North America as well. At this point, about 50 percent of Sangoma’s revenues come from customers in North America, 25 percent comes from Europe, and the other slice is split pretty evenly between Asia and Latin America. “I am very comfortable with that balance,” said Wignall. “And it’s definitely going in the right direction.”

Sangoma, a public company, posted revenue growth of almost 30 percent from the first quarter to the fourth quarter in its 2011fiscal year. And revenue continued to hit all-time records for Sangoma in fiscal 2012 with sales up 20 percent in the first quarter and another 15 percent in the second quarter. EBITDA dropped from $0.55 million to $0.33 million during the same period.

Wignall said these kinds of results reflect the company’s focus on revenue growth. Sangoma, he said, is highly profitable, generating cash, it’s now growing quickly, and it has no debt. It’s about top-line growth now, he said. “If we focus on our customers and deliver them more products that meet more of their needs, revenues will continue increasing and our profitability will grow higher still. I can’t think of a better combination.”

When Wignall joined Sangoma, he said, the board of directors challenged him “to ignite the growth engine” at a company whose revenues had plateaued. By focusing on new products, new customer segments and geographies, addressing the needs of customers as well as distribution partners, and making substantial new investments in products, marketing, sales and service, Wignall and the Sangoma team have delivered on this charge.

“Sangoma is really a revolutionized company over the last year. We’re growing quickly, and our refined strategy to deliver any-to-any connectivity between the growing universe of devices, networks, services and applications has resonated throughout the market,” said Wignall. “We’re not just a board company anymore.”

Edited by Stefania Viscusi


Sign up for our free weekly Internet Telephony Newsletter!

Get the latest expert news, reviews & resources. Tailored specifically for VoIP and IP Communications.