Hosted VoIP

In previous columns, I have touched on a few of the leading platform play offerings, and in light of some very recent news items; it’s time to revisit their progress. In particular, I’d like to talk about three companies – Ribbit, Jajah and Ifbyphone (News - Alert) – each for different reasons.

I’m going to start first with Ribbit since their news is by far the biggest development in this space and sets the bar for everyone else. As most of you know by now, Ribbit announced they were being acquired by BT (News - Alert) on July 29. They are a great example of a Web 2.0 platform play that service providers can build voice applications off of. I’ve noted previously that they are not an end-to-end provider in the way that Jajah is, but do provide a very good point solution for operators who need to integrate Web and voice services in a hurry. For anyone trying to become a platform play, this deal is a great validation point, and to think that BT paid $105 million is only going to accelerate the rush to get into the game.

The VoIP market is full of companies far more established than Ribbit (News - Alert) who were acquired for a fraction of this amount, and it’s clear that BT is buying more into the promise than the reality. I see parallels here to eBay’s acquisition of Skype, but in this case, Ribbit has little in the way of customers or revenues. The deal may be pocket change to BT, but it’s a huge payout for Ribbit’s founders and investors, and I think it bodes very well for others pursuing platform plays.

I’d have to say that given the price paid, BT was highly motivated to buy Ribbit, and that alone speaks volumes about how important platform plays are becoming. If BT isn’t getting much in the way of tangible assets or cash flow, then what are they getting? Well, they get a ready-made platform to help them become a 2.0 services provider today, which fits nicely with their ambitious 21C network transformation vision.

On a more practical level, they get a company based in the epicenter of Web 2.0 innovation – Silicon Valley, along with Ribbit’s ecosystem of 4,000 developers. The value of these developers is somewhat dubious at this stage of the game, but in terms of a “make versus buy” strategy decision, it’s the best route to follow. This puts BT in the game overnight, and given the global nature of Web services, along with their own reach into 120 countries, they can now be a player in any market, which is going to be key for making this investment pay off. If BT were to pass on Ribbit, I’m certain that other operators with global aspirations – AT&T, DT, Vodafone, etc. – would have come knocking – and failing that, the likes of Google (News - Alert) would not have been out of the question.

This news has several angles that need further exploration, and I’ll continue the analysis in my next column. I need to move on now to two other updates.

Jajah has some very fresh news – as of yesterday – that shows how quickly the platform play concept is evolving. I’ve talked previously about how Jajah is a network-based platform play and can offer a more complete solution than Ribbit. Given Jajah’s success at raising capital and forging Tier 1 partnerships, I’d have to think their ultimate valuation will be many times higher than Ribbit, but that’s not the story here.

Their latest news is a different form of validation, and important in its own right. Jajah has announced they will be “the world’s first telephony application to utilize Intel’s (News - Alert) Remote Wake technology”. These companies have been working closely in other areas, and this is another step forward to embed VoIP into PCs, and eventually other devices powered by Intel’s chips.

The Remote Wake technology essentially enables PCs to become always-on endpoints for telephony. Aside from being a green, energy-efficient solution, it helps migrate voice communication away from traditional phones and into a richer, multimedia broadband environment. This will be a very attractive feature for operators looking to offer Web 2.0-style communications that include voice. While mobile users can get a decent multimedia experience on their smartphones, the possibilities become far more intriguing when calls can be seamlessly routed to the desktop, even when the PC is in sleep mode.

Jajah has been pushing ahead on other fronts recently that extend the value proposition of a platform play. Just in time for the Beijing Olympics, they launched Babel, a real-time voice translation application. Not surprisingly, the first language was Mandarin, and will enable people using Jajah to talk to each other when they don’t speak the same language. It will be interesting to see the take-up of Babel, and the Olympics provide a perfect showcase for what can quickly become a global opportunity for Jajah.

Concurrent to Babel, Jajah has launched Concierge in partnership with a Canadian company, Mobivox. Building on Mobivox’s speech recognition expertise, they can now extend Jajah to hands-free environments such as your vehicle. Voice activated telephony is another attractive value-add, especially for mobility, which should be of great interest to wireless operators looking to find new revenue streams.

Finally, a brief update on Ifbyphone, who is breaking ground in completely different – and new areas. I first talked about Ifbyphone as being an easy to use platform for a variety of voice applications, typically for businesses. They have continued to evolve by releasing new applications and enhancing their back office infrastructure – which is a key part of how they monetize the business.

They view these elements as building blocks for “cloud telephony”, where Ifbyphone’s infrastructure resides. Their applications are based on open APIs, which any service provider can readily access and integrate into their offerings. The idea here is to make it easy for operators to add voice features – for everyone, for niche markets, or for short term scenarios. This may seem intuitive in the Web 2.0 world, but for conventional operators, this is news.

The most recent development of note for Ifbyphone is their focus on the world of advertising and marketing. Voice is the most intimate and immediate mode of communicating, and as such, is the most valued by marketers. Ifbyphone has recognized the market opportunity here and has tailored its platform to their needs. The prospect of integrating full IVR capability into advertising campaigns so easily and cost-effectively has received great interest from this community. Traditionally, the expense, complexity and time requirement made this impractical for marketers, but with Ifbyphone, adding toll free numbers with full reporting, CDRs, etc. becomes a very easy decision.

This is a great example of how service providers can utilize a platform play to address the needs of a particular market, either on a white label or co-branded basis. Since Ifbyphone has a fully SIP-based infrastructure, they can manage the process end-to-end, making it very easy for any operator to partner with them.
With these applications being so flexible, Ifbyphone is helping operators make voice more valuable, and allowing them to offer service for much wider range of applications. This is the essence of what makes a platform play attractive and Ifbyphone strikes me as having a great model for others to follow.

I wanted to touch on these three companies in this column because they all have had recent announcements that speak well to how quickly the platform play is taking hold with service providers. There are certainly many others out there doing interesting things, and I’ll be looking to comment on them in future columns. And by all means, if there are some promising platform plays you’d like to share with me, drop me a line any time.