Monday, February 27, 2006

Interview with Chris Lyman, CEO of Fonality

My interview this morning is with Chris Lyman, CEO of Fonality (www.fonality.com), a firm that is developing a low cost, PC-based PBX platform. The firm recent raised a round of venture funding, so I thought I'd catch up with the company and learn more about what they're doing.

Ben Kuo: Congratulations on the recent round of funding.

CL: Thank you, we are thrilled to have Azure Capital invest in the company and join our board. The funding process has often been characterized as an evil tax on a business, and we are excited to getting back to the business of running a business.

BK: For those who aren't familiar with Fonality, what is your product and how does it fit into the PBX space?

CL: Fonality offers an IP PBX to SMBs for 40-80% less than the competition. SMBs represent the largest segment of the business market and are woefully underserved. Quite simply, they have never been able to afford the phone system they always needed. Fonality has been able to be so price-disruptive because we offer the compounded savings of open source software, standard PC hardware, and competitively priced IP phones from the likes of Polycom and Cisco.

BK: How did you come up with the idea for Fonality?

CL: I had started another company, a residential VoIP provider, and we needed a phone system. When I went shopping for one, the price I got back was $15K, and I knew we were in the wrong business. Essentially we feel that the modern small business has sophisticated needs such as telecommuting, voicemail->email, and the ability to link remote offices. These are enterprises features that have been unaffordable until we brought the disruptive pricing of open source into the equation.

BK: What's your background in the area?

CL: I founded and ran one of the nation's largest SMB hosting companies. It was called Virtualis and was also LA-based. That is how I learned data. I sold my company to a large CLEC; where I learned the walled gardens of telephony. The intersection of the two is IP telephony.

Also, telephony, like hosting is mission critical. I often joke with my team and ask them what's next in the mission-critical start-up space - a utility company?

BK: How comfortable are customers with running their businesses on commodity PC hardware?

CL: Quite comfortable. Most corporate data, whether it resides on premise or in a data center, runs on a PC today. Fonality offers PBXtra on a range of hardware from low-end PCs to high-end rack-mount servers. Customers can let their budget and deployment size be the determining factors.

BK: How are you going to use the new funding?

CL: Fonality is going to further invest in channel development, improve scalability for larger deployments and expand its executive team. We just hired telecom veteran, Bob Nugent, as VP of Sales. Bob's last three telecom start-ups went public, so we are thrilled to have him on board.

BK: Thanks!