Sangoma Announces Transformative Acquisition of Digium

Good news!

FAQ from the header

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Congrats to the Sangoma team. Most IT acquisitions and promises of synergy are often met with eye-rolls and head-shakes by those of us who have been around a few years, but this one seems to make a lot of sense. We’re looking forward to seeing great things!

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Well isn’t that special!

Look, I get why Sangoma is doing this - for crying out loud Digium was making a profit of 30m a year and Sangoma is picking them up for 28m - that is a deal! In 2 years you pay back the purchase price and double your money! I DON’T understand why Digium is doing it - it’s one thing to sell out when you are going downhill with no way to stop it but when your profitable? Somebody clearly wanted to buy a boat and play with their grandchildren!!!

The one thing I will point out to Sangoma is that the Q&A and press releases are COMPLETELY IGNORING what is going to happen to the IP phones and commercial phone systems and this is BAD NEWS. Nobody who has been around the tech industry for any length of time is going to believe that you are going to maintain independent IP phones and premise-based phone system products for any long period time - the entire point of an acquisition like this is to halt competition. So as I see it - here’s your options:

  1. Kill both products and release a NEW phone system and NEW set of IP phones that combine all the best features of both systems

  2. Replace Digium’s phone system and IP phones with Sangoma’s phone system and IP phones

  3. Reposition/remarket Digium’s phone system and IP phones as the “large company, enterprise” brand and Sangoma’s as the “small business” brand (or vis-versa) - this is what Cisco did when they bought Linksys for example.

So, which is it? I think Sangoma needs to get on it and make that decision ASAP because you have installers out there who are going to be real reluctant to quote a system that might end up being taken off the market in a year or so.

I guess you missed the part in the announcement that Digium was losing money, 4 million last year.
This year seems better. I guess that wasn’t sustainable and Sangoma came in for the rescue.
Looks like the asterisk development team is now safeguarded, and hopefully the combined entity will remain profitable.


Please re-read things. You are dead wrong on the profitability. If they were making 30M a year in profit they would of sold for over 100M.

As far as product related things how could we announce something when we haven’t even closed on the sale yet and then need to evaluate everything and talk with customers and partners to come up with the best plan that suits everyone and that may include keeping all products. Time will tell.


Does that mean the end of FreePBX is near? Or will it remain open source like Asterisk will?

Both questions answered in the FAQ linked at the top.

Where would you get that idea from? I thought I was very clear when I said products not projects. Nothing to do with asterisk or FreePBX. Without those their is no Sangoma or Digium. Please don’t start assuming things. FreePBX and Asterisk are 100% not going away and will keep growing and being invested in like they have been.


Congrats to the Sangoma team!

Only good things can happen.

(I can see lotta feature requests on will get into working status. Shhhh… :shushing_face:)

Ah yes, I definitely missed that one - $30m in REVENUE not PROFIT. Big difference there! Although that leads to the question - how can you make $30m in revenue and still lose money?!? Unless this sale was in the works for the last couple years and they decided to crowd all their losses into FY2017 so that the buyer didn’t have to declare a loss after purchase. I guess if your #1 goal is purely “being disruptive” than making money isn’t your strong suite!

But, my second point still stands. There’s been a big press release - but if I was a Digium customer I’d be worried. Tony - the press release stated “increased scale via significantly higher sales” well you cannot scale up to higher sales if your sales are all split up among a bunch of similar products. This is why for example General Motors created the “corporate car” and badged it Oldsmobile, Buick, Chevrolet and so on for whatever brand it was under. THAT was an example of scaling up. GM acquired Buick and Olds, killed their separate R&D and engine lines, built the identical car for both brands and labeled it Olds or Buick or Chevrolet. They greyhairs that desperately wanted to believe that the old Olds was still around got a bone, the accountants got a bone, and everyone was happy.

Your words about retaining all products are nice but not consistent with profitability which is the entire point you are making about the purchase. If I was a Digium customer I would assume that my system is at risk of being orphaned in the future. Your Sangoma customers don’t really care what Digium is doing with it’s products - all they care about is what’s going to happen to the Asterisk project and it’s obvious from a logical standpoint you wouldn’t be stupid enough to kill the goose what lays the golden eggs, the Asterisk project is the only thing in the acquisition that’s going to be left alone.

It is S.O.P. in tech for the acquirer to drop redundant products of the acquired. So far nothing in your comments or in the press release would lead anyone to assume Sangoma’s products were going away and I would think you would be daft to tamper with something that is making money. Instead the attention is going to be focused on Digium’s products and what is their future. The service contract fees will prevent an immediate slash-and-kill of their products but the desire to make them profitable and scale up is going to make it inevitable that something changes there. My advice is that the sooner Sangoma commits to some time figures the better.

Nothing would hurt you to make an announcement that as part of the sale Sangoma has committed to maintain the Digium products, unaltered, for the next 2 years while you contact the Digium customers and find out what they would like a future to look like. It would put a date on “when we are going to start screwing with your phone system” that would prevent those customers from being worried about your intentions and bolting or falling prey to being picked off by opportunists like Cisco.

But, suit yourself. I’m raising a flag from “outside the wall” that you simply don’t see from the inside and if you don’t care about it, it’s your choice. Maybe I’m wrong and you have already run around to the major Digium customers and made commitments and your not worried. But if I’m right - you need to do something about this quickly.

How can we comment on something and plans when we haven’t even closed on the deal yet. Please just relax. The Sangoma team is not dumb. We have done 6 of these in the last 3.5 years and the management team combined has done well over 50 deals with alot of them being much larger then this deal.

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As Tony keeps saying the sale has not closed yet. The soonest anything could happen is after the sale closes.

He also said all products COULD stay. Yes that is highly unlikely but these decisions have to be evaluated. Somethings Digium acceled at. Other things Sangoma did. Obviously a stronger product will be more attractive. This is by no means an arbitrary process. As the teams work through these decisions they will be analyzing multiple data points. I am personally not involved in any of this so I don’t obviously know what those points are but it seems above Tony said user, reseller, customer feedback will matter. My unsolicited advice is to not come in assuming things. Provide your constructive feedback and desires through the appropriate channels. If you have a particular product you want to be heard on contact your point of purchase or account manager. Assumption and panic don’t really progress the conversation.

I would assume in the next year or two we will see the fruit of all this. M&A events like this with longstanding products and teams is going to take time, but this is obviously exciting for both FreePBX and Switchvox users. There was a good episode of VUC thats online from Friday worth checking out.

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The problem isn’t going to be people like me who are raising the issue publicly. The problem are the customers out there who have already put money into Digium gear and no matter what you all say, are going to be looking for some actual commitment. And commitment isn’t going to come from their point of purchase or account manager who lacks authority to commit the company to any course of action.

Only the exec staff of Sangoma has authority to make promises on Digium gear future and nothing that anyone of you Sangoma fanboys says about it matters in this area. If anything you really need to but-out since you aren’t helping Tony at all.

So far the official line is “we can’t comment until the deal closes” which as I pointed out isn’t any comfort to someone who has spent coin on gear. I don’t know if the additional “trust us we know what we are doing” is going to be very reassuring to those folks but I suppose they do feel better knowing that at least their support is now being provided by a profitable business.

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So I need to but out. Interesting. Whys that?

Tony I see you missed the sentence before this which said “Only the exec staff of Sangoma has authority to make promises” you identify as COO by definition you are an executive officer ie: exec staff. You also missed the following sentence “since you aren’t helping Tony at all” Most execs would read this to indicate “oh he wasn’t talking about me” but I guess when you are skimming/speed reading whatever it is, you miss the intent in the post!

Here I’ll help out since you are speed reading and missing intent so much “send Ted a whole lot of money” there maybe I’ll get lucky, ha ha!!!

It seems there has been a lot of commenting here. What was said is no decisions will be made prior to the deal closing. In any event your stuff won’t just stop working so it seems your investment is safe regardless of any comments.

The statement so far has not been HA HA we have a secret. The statement has been pretty clear. No decisions will be made until the process closes. Nothing more, nothing less. All acquisitions have a process. You don’t just get to arbitrarily skip steps just because you’re bored.
The first step is agreement (done)
The second step is disclosure (done)
The third is closing (8/31)

So even if none of the other stages matter the above MUST complete. Then the deal is actually final.

Following the above comes a stage of transition where decisions will be made. These decisions are your true concern. These decisions don’t exist until we get past 8/31 so there are no guarantees to make or not make regardless of if it is the janitor or the COO ( note sometimes the same person)

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