Fonality Repositions: Goodbye Open Source, Hello Cloud

Fonality is jumping off one bandwagon and leaping onto another. The company previously positioned itself as an open source IP PBX phone system provider. But going forward, Fonality is pitching itself as a leading provider of cloud-based phone systems and unified communications for small business. The repositioning also includes a recent CEO change. Here’s a look at Fonality’s new strategy, and the implications for VARs.

At first glance, Fonality has enjoyed some solid success in the IP telephony market. The company’s Q4 2009 sales rose 20% vs. Q4 2008. Similarly, Fonality acquired 28% more customers in Q4 2009 vs. Q4 2008.

Still, Fonality has suffered from a split personality, The VAR Guy believes. On the one hand, Fonality positioned itself as an open source IP PBX provider. But on the other hand, Fonality struggled to escape from rival open source PBX provider Digium‘s shadow.

New Leader, New Message

By January 2010, Fonality transitioned its CEO title from founder Chris Lyman to NetSuite and Brocade veteran Dean Mansfield. Around the same time, Fonality started to de-emphasize open source terminology in its marketing messaging.

Sure, the company’s tagline remains “communicate openly.” But look at Fonality’s revised PR boilerplate:

Open Source Remains Inside

Despite some branding tweaks, Fonality still has a hand in the open source market. The company says its open source telephony platform, trixbox CE, is home to one of the world’s largest and fastest growing communities of open source telephony users, with over 200,000 live deployments and 125,000 new downloads each month.

Also, Fonality continues to partner with open source companies — including a growing relationship with SugarCRM.

Still, Fonality’s messaging to channel partners strongly emphasizes cloud and unified communications opportunities.

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