With Ribbit, BT Is Rethinking Its Voice Business

When BT, formerly known as British Telecom, splurged and bought Mountain View, Calif.,-based Ribbit for $105 million some 15 months ago, I dismissed it as an attempt by an aging incumbent carrier to reinvent itself as a web-savvy, next-generation communications provider that was unlikely to succeed. “BT has always been long on promise, but short on execution of its grand vision,” I wrote.

Fast-forward to today and BT has fully embraced the new communications reality, one that goes beyond mere voice calls. And to show how serious it is, the company has made Ribbit founder Ted Griggs the chief technology officer of BT Voice.

When I caught up with him on the phone last week, I asked him about the bold move by BT to put someone like him in charge. To some insiders, that might seem like letting the inmates run the asylum, Griggs quipped. Ribbit, if you remember, was started about three years ago with the promise of bringing together web and voice using a new kind of a platform, one that was able to take inputs from different communication tools — XMPP, Skype, Yahoo Messenger, MSN and Flash Media Server –- and make them talk to their “switch.”

More Than Just Voice

JP Rangaswami, managing director of service design at BT who was recently named BT’s chief of digital communications, has championed Griggs’s ascension to his new role. Griggs has always believed that when it comes to service providers, thinking about communications as just voice doesn’t cut it, which is why Ribbit’s products merge traditional notions of communications with web applications and extend them. In other words, voice is viewed as just another API that can be used to enhance a user’s experience. Ribbit for Salesforce and Ribbit for Oracle are two examples of voice and the web coming together, said Griggs.

BT’s big bet is good news for like-minded startups such as TringMe and Twilio, which are also seeking that elusive pot of gold based on the voice-web marriage premise. Now might be their time. Why? Because the very notion of communications is changing. As Alec Saunders, CEO of iotum, writes:

Let’s instead change the conversation –- acknowledge that the carrier network is a platform, and that the carrier has a need for an application community, and begin the dialog between network partners and developers about the ability for those operators to help us get to market.

The New Dial Tone

Indeed, people are increasingly using different modes of communication, from Facebook to Skype to Twitter to SMS, and carriers need to embrace such a change. That means they need to offer new kinds of services, such as voice-to-text, asynchronous messaging, asymmetric voice and low-cost dialing.

In other words, carriers will have to stop thinking like resellers of boxes and more like software-based network operators. Juniper Networks (s JNPR) CEO Kevin Johnson recently started talking about how the next evolution of the Internet is going to be less about router and switches and more about software. His company has made its money selling routers to operators, so he does have an idea as to how operators are thinking.

Carriers Do It Best

Large carriers have many things going for them: global infrastructure, deep pockets and the ability to sell to larger companies. Innovative VoIP startups, on the other hand, have the right ideas, but don’t have the footprint or the resources to grow, Griggs said. To that end, he added, “We are doing what we were doing at Ribbit at a much larger scale at BT.” Carriers provide the nuts and bolts including the software platform, and developers do the rest, he said. (Related post: Is There Money in Voice APIs?)

But again, in order to do that, carriers need to change their thinking –- much in the same way that did with CRM, Skype with voice and Google with advertising. For BT, Ribbit is trying its best. Will it succeed? Let’s wait and see!