BT Snaps Up Ribbit for $105 Million
The push to capture the voice of the customer -- even on the road -- may have just hopped ahead a step or two with the latest deal coming out of Silicon Valley. London-based British Telecom, a global provider of communications solutions and services acquired Mountain View, Calif.-based voice solutions provider Ribbit Corp. on Tuesday for $105 million on a cash-free, debt-free basis. According to a message posted that morning on Ribbit's Web site from Cofounder and Chief Executive Officer Ted Griggs, "This is the most important day yet in Ribbit's history."
There had been rumors circulating for some time that BT would acquire Ribbit -- but at a reported price of just $55 million. In an exclusive interview with destinationCRM and CRM magazine, Griggs says he's not sure where those rumors came from -- though he did rule out an internal leak -- but buys into one theory: "Someone may have said 55 million [pounds], which equal about $105 million," he says. "It was amusing."
Denis Pombriant, founder and managing principal of CRM consultancy Beagle Research Group, says that, rumors or not, the price is right. "I think [Ribbit] got what it believes it's worth," he says. "The founders and any investors had to have a pretty good understanding of the value of the company, and that was reflected in the ultimate deal price."
According to Griggs, BT expressed interest in Ribbit early on after the company's official launch in December 2007. Greg Goldfarb, general manager of enterprise applications for Ribbit, says that, after looking at the company's Ribbit for Salesforce product -- an integration with Salesforce.com -- BT realized this was a way to take those capabilities and incorporate them into its 21CN, or 21st Century Network. The folks at Ribbit, however, say they saw much more than a technology partner: "BT gives us access to more technology -- an additional software developer kit -- but it also gives us access to international markets," Goldfarb says. "In the CRM space, this really does broaden our capabilities to help us get outside the U.S. much faster and our trajectory toward other CRM communities will be accelerated as a result of it."
Pombriant also believes the move provides opportunities for both sides. "BT is a forward-looking organization that's trying to see what can be done to incorporate telecommunications in more business applications," he explains. "That's what Ribbit was founded to do and where its strengths lie. It's a good fit."
Using Ribbit's platform, developers can add voice and automation features to virtually any Web-based application or community. For example, in May Ribbit went public with Ribbit for Salesforce, a software-as-a-service (SaaS) connecting voice to Salesforce.com's CRM system. That product -- along with Amphibian, a service from Ribbit that brings together consumers' mobile phones and the Internet -- fits BT's strategy of morphing into a next-generation, platform-based services company. "With Ribbit, not only do we extend our presence in [Silicon] Valley, but we also gain a groundbreaking platform, a growing community of developers, and a world-class team that share a common vision," said BT Managing Director of Service Design JP Rangaswami, in a statement. "Buying Ribbit lets us accelerate that vision."
Goldfarb is quick to point out that previously announced intentions to integrate Ribbit with offerings from other CRM vendors -- including Coghead, NetSuite, Oracle, SugarCRM, and others -- will only be enhanced by this week's deal, not thrown by the wayside. "It's really full speed ahead in terms of that set of ecosystems," Goldfarb says.
Pombriant, who was briefed on the deal by Ribbit, says that the acquisition doesn't shoulder the company with any direct profit-and-loss responsibilities within BT. "It's [essentially] seen as a pure research-and-development organization with a responsibility to get products out," he adds. Griggs supports Pombriant's view, saying the transition to BT will take some time, but will not be unbearable. "A nice thing to help the transition is that Ribbit is being left [as] autonomous as before," he stresses.
In the next couple of months, Griggs says, his company will have access to what he calls "a firehose of opportunities" in terms of applications that developers are already building for integration with Ribbit. He says we can expect announcements of products and other innovation stemming from the BT acquisition "by the end of this year."
Looking even further ahead, Pombriant says that he believes this is only the beginning. "This involves bringing in more and better communications in line-of-business applications, and I would expect that the natural evolution of all this would be to embed video," he posits. Business professionals, he suggests, will finally get to a point where they would rather connect via video than pay increasingly high prices to travel and meet face-to-face.
Griggs does not rule out video, but says he wants to make sure Ribbit can handle it at the same level of quality Ribbit believes it has achieved with voice. "Video is definitely one of those things we get requests for, but we go back and forth on it," he says. "We will incorporate it, but we want to do it right."
By that, he means he wants to be able to give users choice with regard to where they access the video. He says that Apple's iPhone new software development kit (SDK) -- released to developers in February ahead of the 3G iPhone's launch in early July -- only allows applications built natively to be used on the iPhone. Also, the applications built on Google's Android SDK can only be used by providers and devices that support the Android operating system. "With Ribbit, the platform allows you to incorporate most types of devices: mobile phones, landlines, Skype, MSN, Google -- also browsers," Griggs says. "We want to make sure we let video be ubiquitous across all devices -- platform-agnostic."
Pombriant believes the deal will help usher video along, when Ribbit feels the time is right. "Right now, Ribbit is doing voice and [voice over Internet Protocol], but fundamentally, the platform is there to support video as well," he says. "Certainly with BT's deep pockets it could build out the capability."
News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. To contact the editors, please email editor@destinationCRM.com.
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