Will BT Roll a Strike?

By Thomas Howe

In the book Inside the Tornado, Geoffrey Moore describes technology adoption in large markets by way of a bowling analogy: If you want to get a strike and knock all the pins down, you must first knock over the lead pin, and at least a few pins next to it. These pins take out the ones behind it, resulting in a strike. 

In order for a technology to dominate a large market, it must first dominate several sub-markets, powering complete products, channels and ecosystems that make entries into other sub-markets nearly trivial. The combined effect is market domination, and once the first few pins are down, the rest almost always follow. This effect shows in every technology market, and can not only be seen in modern technologies like personal computers and spreadsheets, but in ancient technologies like calculus, basic technologies like irrigation and even footwear. It is truly a universal and a time and market invariant phenomenon.

As our market grapples with the implications of BT's recent acquisition of Ribbit, this understanding of market maturation is a critical tool for understanding the larger market. In the Telco 2.0 space, there are number of different pins to be knocked over, and there is no doubt that the first pin for BT's consideration are CEBP deployments for large enterprises. Like every large carrier, BT has long standing, strategic and lucrative relationships with domestic enterprise customers. These maturely managed companies make deep investments into enterprise software to manage their business processes, resulting in large economic savings and increased service delivery quality. 

When faced with the mounting evidence of the success of CEBP deployments, they will all demand the ability to integrate their business process with their communications infrastructure. This turns out to be more than a churn avoider for BT, as CEBP deployments also represent lucrative new service offerings and professional services opportunities. For BT, providing this access into their core switching is not an "if", but a "when." Without regard to what happens outside of BT's existing customer base, they must address this need before somebody else does. As large carriers look down the alley, enterprise CEBP is the head pin.

How does Ribbit help? For all the solid business cases that surround CEBP, the fact remains that communications technology is hard technology, and the number of qualified CEBP engineers in the world would surely fit in a jumbo jet. It's not even clear there's enough talent to truly satisfy BT's potential market, never mind the customers of the other 500 world-wide operators of any size.

Ribbit's service creation environment providing Flash and Flex interfaces radically increases the amount of developers available for CEBP deployments and substantially lowers the barrier to entry to creating communications enabled applications. Even though Flash and Flex are essentially web centered technologies, and are relatively uncommon choices for the typical enterprise developer, they are easy to learn and deploy, and nothing's stopping Ribbit from providing SOAP, REST or JavaBeans on their current platform. Ribbit brings the ability to scale the implementation of CEBP deployments for BT.

Does this set BT up to attack the customers of SwissComm, Orange and Verizon?

Yes and no. It is very clear that, in relation to the enterprise, BT is not unique. Every incumbent carrier has similar domestic relationships; old, important, strategic and entangled ones.  These relationships will hardly dissolve overnight, without regard to how compelling and lucrative the applications enabled by Ribbit's technology are. However, this certainly becomes a situation where the clock is now ticking, and if TelMex refuses to provide an API to El Banco de México, they have an alternative. This also represents the first, clearly identified bowling pin. 

If BT is able to dominate the enterprise CEBP sub-market, it sets them up for the second pin: two sided communication service offerings. That said, I expect that BT will be have a fight on their hands to dominate this market in the medium term, as they aren't the only operator with smart guys in the strategy department ... they are the only ones with Ribbit. Ribbit's a hop ahead; BT needs to work to maintain that lead. If an operator fails to hold on to their current enterprise customers, the best they can expect is a 7-10 split.

Thomas Howe is a long-time telecom consultant, writer, and speaker who is the CEO of the Thomas Howe Company, providing expertise in improving the business process with real-time communications. His website is at http://www.thomashowe.com