Ribbit and BT’s evolving platform strategy

Voice 2.0 published a snappy article in response to BT’s shutting down of the Web 21C SDK.  I think the author did a good job of capturing both the opportunities and challenges of the programmable communications future.

Here’s a direct re-print of the article (title links) for convenience 🙂

Ribbit and BT’s evolving platform strategy

One of the challenges facing telcos right now is to open up their network and IT assets to create more value. A common issue is how these initiatives are being driven from the IT side, who intuitively understand the importance of platforms and a developer ecosystem. Meanwhile, the rest of the business fails to comprehend the importance of external innovation, isn’t organised to sell and support it, and the technology platform struggles to have the impact on the business that was anticipated. It’s a familiar story.

In the inbox this afternoon we find a message from JP Rangaswami, BT Design’s MD Strategy & Innovation, telling us that their Web21C SDK platform is no longer going to be supported after the 10th of October. Their developer-ecosystem efforts are now concentrated on Ribbit. Web21C was always a great idea — an SDK for various programming languages that let you interact with BT’s voice switching, making, receiving, rerouting calls, sending and receiving text messages, and carrying out location dips and authentication checks.

But somehow it didn’t quite get traction; the forums over at the Web21C site are a fairly good index, there being hardly any activity. For some reason, having created the most capable telco API suite yet, BT didn’t really promote it. More recently, BT acquired Ribbit, “Silicon Valley’s Phone Company”, VoIP/Web integration specialists who aim to let Web developers build CEBP applications, which immediately raised the question of what they would do with Web21C. Now we know; it’s going to vanish.

What does Ribbit do better?

The first thing is something we’ve long since been aware of. By the very nature of a business with so many moving parts and so much that can go wrong, telcos are risk-averse and slow-moving organisations. They struggle to understand user needs, and quite simply, a lot of user demographics are too small to show up on the radar. This is why we need tools that radically cut the barriers to entry of developing new kinds of applications that embed voice & messaging capabilities. That means anyone can create their own telecoms service: either the users themselves can customise their experience (just as you do with a web portal or extensible browser); or more practically, small businesses and internal IT groups who are closer to the users.

Ribbit was a small startup that understood one particular group well — developers. We analysed no fewer than 70 new voice & messaging players in order to understand how telcos can cooperate with external innovators in order to cope with the decline of carrier voice, and we conclude that it’s precisely this kind of ecosystem they need.

The other advantage Ribbit has was underlined for us by David Sharpley, VP of product marketing channels at Oracle. As he put it, “BT essentially bought 100 developers working on Salesforce.com”. There’s a crucial strategic advantage for you — Salesforce, or rather their developer platform Force.com, gives them instant access to the enterprise, just as being a Windows shop did from the early 1990s until very recently. And CEBPs — Communications-Enabled Business Processes — are where the money is.

Ribbit is just part of the picture of what BT needs to assemble to become a viable and credible commerce platform. Ribbit, for example, is highly dependent on Adobe’s Flash technology for its user interface, just as browsers like Google’s Chrome remove the clunkiness from dynamic Web sites. We know the Web is the one unifying UI of the future, so BT has work to do to “webify” Ribbit. BT already has some of the other parts of the puzzle, such as its Tradespace e-commerce platform, and we can think of others that we’d have our M&A folk circling.

Telephony as the surprise growth engine of the future

In our Voice & Messaging report, we pointed out that what really matters is the social meaning of telephony — in a sense, there’s a shadow of metadata attached to every call and text message, strongly determining its value to the participants but hardly affecting its cost to the operator at all. As we said in the report:

The kind of research required is different to anything the industry has undertaken. It is not about statistics and user surveys, but about social anthropology. To create value, the issue that must be understood is the social meaning of telephony – not what was said or how long the call took, but what was intended by the call.

It’s in the nature of CEBPs that the bits transferred are attached to actual money. People call up freephone numbers because they want to buy stuff, not because they fancy a chat. The combination of low demands on the infrastructure and high social value means that these offer the potential for high margins. But at the same time, these kinds of interactions are valuable because they are tightly coupled to very specific problems in individual firms’ processes. You’ll never find a telco capable of spotting these opportunities. Hence the need for an external innovation strategy.

And it’s not as if telcos aren’t aware of this. Here’s a chart from the report showing the areas our fixed and converged telco respondents thought they should invest in:

graph1vom.png

Notice the big spikes for APIs and commerce. Of course, the real lesson here is that to achieve the promise of Telco 2.0, you need both those things working in close harmony; which might well be what Ribbit, Salesforce.com, and BT’s network have in store for their competitors. Web21C was nice in as far as it went — but it lacked the social and commercial elements, and so it never took off.

BT still needs to articulate to its investors a business strategy that joins together call centres, open APIs, CRM systems, and network management. These assets span across Global Services, Wholesale and Retail. If it gets this right, it could spell a revolution in how telcos make their money. We’ll be discussing these issues with JP Rangaswami and the Group CTO, Matt Bross at our event on 4-5 Nov in London.

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