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Chronicles

The story behind the story

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Nortel Strong Arms Open Source Vendor

What happens when a VoIP blog (yours truly) writes about the fact that a former Nortel subsidiary (Blade Network Technologies) went looking for a new phone system, chose an open-source Asterisk-based solution from Fonality instead of using Nortel's own PBX …

VoIP & Gadgets Blog

Context & Ripple Effects

April's Register framing of the VoIP wars argued that incumbent telephony vendors treat distribution and service attach — the 'air supply' — as the real battleground when cheap IP calling erodes PBX margins. This story is that thesis arriving at Nortel's own doorstep: Blade Network Technologies, a company Nortel spun out, shopped for a phone system and picked Fonality's Asterisk-based platform over Nortel's own PBX.

The notable part is not one lost deal but the reported response — Nortel allegedly leaning on Fonality after the fact, per the blog that broke it. An incumbent whose former subsidiary won't buy its own gear is an incumbent whose captive-channel economics are failing, which makes pressure on the open-source vendor the cheaper defensive move than repricing the PBX.

First-order effects

  • Fonality gains a marquee enterprise reference — a Nortel spin-off choosing Asterisk over the parent's PBX — but absorbs direct pressure from a top-tier vendor over that single win.
  • Nortel concedes, publicly and within its own family, that its PBX no longer wins on merit even where the relationship should guarantee the sale.

Second-order effects

  • Nortel's channel partners and resellers now have a citable precedent that open-source VoIP meets enterprise requirements, weakening the 'unproven software' objection they sell against and forcing PBX price concessions.
  • Other Asterisk-based vendors inherit both the validation and the risk: if strong-arm tactics work on Fonality, incumbents can be expected to try them across the open-source VoIP cohort.

Third-order effects

  • If incumbent responses to Asterisk losses keep taking the form of commercial pressure rather than product or pricing fixes, the contest migrates from sales competitions toward legal and standards leverage across VoIP — a structural fight between proprietary lock-in models and community-built stacks whose outcome depends on whether open-source vendors can bear the cost of defending deals.

The trend: Enterprise telephony is shifting from proprietary PBX lock-in toward open-source Asterisk platforms, with incumbents' first line of defense being pressure on the vendor rather than a better price.