Dial D for Disruption - Mark Spencer, a programmer destroys 7 billion dollar industry

Want to build a phone company for $100? Give Mark Spencer a ring. In a research park outside the low-key bustle of downtown Huntsville, Ala. Mark Spencer finishes his barbecue and resumes wreaking havoc on the multibillion-dollar phone equipment business. Spencer is the inventor of Asterisk, a free software program that establishes phone calls over […]

Want to build a phone company for $100? Give Mark Spencer a ring. In a research park outside the low-key bustle of downtown Huntsville, Ala. Mark Spencer finishes his barbecue and resumes wreaking havoc on the multibillion-dollar phone equipment business.

Spencer is the inventor of Asterisk, a free software program that establishes phone calls over the Internet and handles voicemail, caller ID, teleconferencing and a host of novel features for the phone. With Asterisk loaded onto a computer, a decent-size company can rip out its traditional phone switch, even some of its newfangled Internet telephone gear, and say good-bye to 80% of its telecom equipment costs. Not good news for Cisco, Nortel or Avaya.

"We have to figure out ways to get into everything: Carriers, businesses, equipment companies," says Spencer. "For better or worse, I don't tend to think small."

Spencer, who is all of 29 years old, is poised to disrupt the $7 billion market for office telecom switches (often called PBXs) much the way the Linux open-source computer operating system crushed the price of business computing and brought woe to established leaders such as Microsoft and Sun Microsystems.

Since Spencer released Asterisk to the world in 1999 as a phone operating system, it has been downloaded 500,000 times, and it continues to be downloaded 1,000 times per day. Some 350 contributors have taken it from a rocky voice system to one with clear calling and more than 100 features.

Electric utility Southern Co. is using Asterisk in a pilot program to translate voicemail into text messages for 30 managers' BlackBerrys.

The town of Manchester, Conn. is about to begin using Asterisk to run an application tied to the 911 service that will cost less than $1 million, half the price it would have paid had it used traditional phone equipment, and at 10% of the operating costs. Outsourcing company Sutherland Global Services has tested Asterisk in 400-person call centers, finding it cuts telephone costs by two-thirds.

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Communication, Phone, Teleconferencing, Internet, VoIP, PBX