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So you're saying they're a commodity offering with no customer lock-in?

josh_carterPDX 10y ago
They're a SaaS play with no lock-in. Which is great for businesses who want to use Twilio on a small scale then grow strategically. Sucks for Twilio because they want to have as much predictable revenue as possible.
- ithinkinstereo 10y ago
  I disagree about the no lock-in. Twilio just works. You can set it up and then forget about it, which I think is very appealing to the SMB market. The hassle of moving off Twilio likely outweighs the cost savings. So LTV is prob high and churn pretty low. As long as they can grow accounts, (which they are doing and the pace is accelerating), I think they'll be fine.
  - mooreds 10y ago
    I think they are just like stripe. When you get to a certain volume you start to do the cost benefit analysis of moving off the saas provider. Until then they are the first choice for a large portion of the developer population. After that, it's just a numbers game: will it cost more to redevelop the functionality they provide (either on your own or with another vendor) than you will save over a reasonable timeframe? If the answer is yes, you keep paying twilio, otherwise out migrate. I have no first hand experience on what size makes sense for twilio, but this article gives us an upper bound (a huge one, to be sure).
  - tyingq 10y ago
    I think there is a "no lock in" problem, depending on what their customers are using them for. One of Twilio's upstream providers, bandwidth.com, released their own api, and is undercutting them on pricing: https://www.bandwidth.com/pricing/ https://www.bandwidth.com/pricing/
user5994461 10y ago
I'll venture on the aggressive side and say they are even less than a commodity. Communication companies like these are inherently highly competitive. Each one only cover some part of the world (for instance, SMS to USA and canada). When you have a big company operating in multiple continents, like Uber, you MUST have multiple service providers to cover all your customers (and it will also come with costs savings so you really have maximum incentive to diversify). Once you have diversified to 3+ providers, you mastered the abstraction good enough to plug them in and out. The next logical step is to take advantage of that to put providers in a same zone in competition with each other.
- matt4077 10y ago
  Twilio offers numbers for something like 60 countries, as well as cross-border sms and calls. And the interchangeable nature of their business is pretty much the definition of a commodity.

They're a SaaS play with no lock-in. Which is great for businesses who want to use Twilio on a small scale then grow strategically. Sucks for Twilio because they want to have as much predictable revenue as possible.

ithinkinstereo 10y ago
I disagree about the no lock-in. Twilio just works. You can set it up and then forget about it, which I think is very appealing to the SMB market. The hassle of moving off Twilio likely outweighs the cost savings. So LTV is prob high and churn pretty low. As long as they can grow accounts, (which they are doing and the pace is accelerating), I think they'll be fine.
- mooreds 10y ago
  I think they are just like stripe. When you get to a certain volume you start to do the cost benefit analysis of moving off the saas provider. Until then they are the first choice for a large portion of the developer population. After that, it's just a numbers game: will it cost more to redevelop the functionality they provide (either on your own or with another vendor) than you will save over a reasonable timeframe? If the answer is yes, you keep paying twilio, otherwise out migrate. I have no first hand experience on what size makes sense for twilio, but this article gives us an upper bound (a huge one, to be sure).
- tyingq 10y ago
  I think there is a "no lock in" problem, depending on what their customers are using them for. One of Twilio's upstream providers, bandwidth.com, released their own api, and is undercutting them on pricing: https://www.bandwidth.com/pricing/ https://www.bandwidth.com/pricing/

user5994461 10y ago

I'll venture on the aggressive side and say they are even less than a commodity. Communication companies like these are inherently highly competitive. Each one only cover some part of the world (for instance, SMS to USA and canada). When you have a big company operating in multiple continents, like Uber, you MUST have multiple service providers to cover all your customers (and it will also come with costs savings so you really have maximum incentive to diversify). Once you have diversified to 3+ providers, you mastered the abstraction good enough to plug them in and out. The next logical step is to take advantage of that to put providers in a same zone in competition with each other.

matt4077 10y ago
Twilio offers numbers for something like 60 countries, as well as cross-border sms and calls. And the interchangeable nature of their business is pretty much the definition of a commodity.