Twilio Discussion

https://www.enterprisetimes.co.uk/2017/03/30/can-amazon-conn…

Twilio, in the scheme of things, is presently cheap. Using the term in its common parlance. Based upon 2018 revenues (which is what such companies are valued on, if one wants to so invest), Twilio is cheap. Lets make no mistake about that (and I don’t want to hear from traditional fundamental valuation skeptics. This is not GE, this is growth investing in nascent companies who are creating and redefining the way things are done in the world).

Of late there has been grumblings that AWS with their new call center app, will disrupt Twilio. Defenders of Twilio respond that Twilio is a partner with AWS on this new call center product. And sure enough they are. I have no doubt that Twilio does things that AWS does not, and that Twilio will bring value add to the service.

The problem is, is that after you read what AWS is doing with their call center offering, you get the feeling that for most solutions, you won’t need more than plugging in your CRM software (such as ZEN or CRM) and off you go.

And we know this product works well. It is the same service that Amazon has used internally for years for its internal call center customer service needs. If there is one thing we know about Aazon, and no one would deny, is that Amazon knows customer service, perhaps as well as any company that has ever existed. So we know this product worked to satisfy all of Amazon’s internal needs.

I have little expertise, or insight into why one would choose TWLO over AWS if one needed a call center. I do know that TWLO provides an awesome product, so awesome, that some companies, even though they already have a large traditional infrastructure for their call center, will still use TWLO on top of it to provide more flexibility and features.

So, it seems to me, that serious businesses that are at least somewhat large (the above example was from that bed and breakfast app…you know what I am talking about) will probably choose Twilio.

But myself, as a small business, if I needed a call center, given what I read in the above link, I do not know why I would need more functionality and ease of use (as it is said to be quite easy to use and implement - some say even easier than Twilio) than what Amazon itself had need for.

Worth digging into more. It may explain why Twilio shares are cheap at present, this fear and doubt. It is not this repeated rationalization that “Twilio is pricey and therefore why the shares do not respond to good news,” but the more rational, stepping back and exploring the competitive environment. And the competition is not the other API companies, but AWS as an example. Robust, tested, simple to use, less expensive.

How much Twilio do you need as a partner if you are using AWS call center?

And I am sure many here will tell me, if you have to think that much, maybe you are thinking too much.

Tinker

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We need to pin down what it means that Twilio is a “partner” with Amazon in this area. If a customer uses AWS for its call center, does Twilio share in any of that revenue because some of its features are automatically incorporated? Or can you use AWS for your call center without any Twilio “content”?

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https://news.ycombinator.com/item?id=13976567

But digging deeper, Twilio makes money off of larger implementations, not small 10-20 operator shops. And these larger call centers are not going to be satisfied with what AWS has to offer, which is functional, excellent, but basic.

The risk is that AWS could get serious about this product, and start to invest serious engineering resources and money into it. However, since AWS has had many years to do just this, and have not, it is not likely they will commit to doing it now, given all the priorities they have. Which is why they will rely on third party integrations such as Twilio or Salesforce to enable these higher level functioning.

As such, this overhang may be a good time to look at Twilio.

Tinker

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EdGrey,

You can use AWS for your call center with no other partners or integrations. It is the same internal call center software that Amazon itself has used for its own customer service call center needs for the last multiple years.

What AWS is doing is taking their own internal system and making it available to the world.

So the “partnership” is that you can integrate Twilio services into your use of AWS call center. Or as an example, you can plug Zendesk or Sales Force into the AWS call center, so that they integrate and work as one. But you are not required to do so.

This last example provides another option for Zendesk customers to embed telephony into their services without using Twilio, as they can use AWS instead. However, if the cost is relatively the same, most will pick Twilio I would think.

I am using my experience here to figure out how this works. Normally a product like what AWS is offering would be basic. Most customers would not be satisfied with it. However, this AWS product is somewhat unique in that it is not just a new product created for sale, but a tested product, used by Amazon internally, and now made available for anyone. Different animal.

So long and short, AWS connect is not powered by Twilio. If you want features not available or well done on AWS you can integrate your Twilio solutions into the product, which I think will happen often, particularly amongst more sophisticated organizations, who would probably just go with Twilio to begin with and not bother with AWS connect.

Tinker

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The risk is that AWS could get serious about this product, and start to invest serious engineering resources and money into it. However, since AWS has had many years to do just this, and have not, it is not likely they will commit to doing it now, given all the priorities they have.

Or they could just acquire Twilio.

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Acquiring Twilio would make a lot of sense for Amazon if they intend to push this product, without question.

Also, as much as it may be a competitor to Twilio, as well as a partner, it does give Twilio a further competitive advantage, because you don’t see Nexmo integrating into AWS connect. Just Twilio. Yet another reason to go with Twilio.

But yes, an acquisition does seem more and more likely if Amazon is really serious about this. And btw/ the highest paid execute at Amazon, even more so than Bezos, is the head of Amazon’s AWS services. So he will have incentive to continue to have his division lead the way ($30 million + last year in stock options).

Tinker

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I am not so concern over long term. Market is large enough and can handle multiple players for different customer need. Think about Shopify, there are more competitors in that space. People tends to assume large player will crush first-move small ones when entering a market, but that rarely happens and fear will dissipate once Twilio reports business progress in future earning reports.

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How much is the overlap between Amazon connect and Twilio ?

I went over Amazon connect launch video:
https://www.youtube.com/watch?v=uqmIet8GMaE

Visited Twilio website -
https://www.twilio.com/docs/api?filter-product=sms&filte…

Bert Hochfeld’s writeup on Twilio was very informative.

I am no expert in this, but at this point the overlap does not seem to be significant (I am be wrong). The problem I see is over time, amazon can pretty much encroach any business it wants to. Long term this looks like an acquisition target, most likely end game.

I would love to hear more insights on this from people familiar with technology.

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From Twilio website: Connecting TWLO and Amazon connect.It seems TWLO is promoting this.
https://www.twilio.com/blog/2017/03/supercharge-your-amazon-…

Motley fool article:
https://www.fool.com/investing/2017/03/28/twilio-snuggles-a-…

IBM watson with TWLO:
https://medium.com/cognitivebusiness/cognitive-capabilities-…

Some discussion here:
https://news.ycombinator.com/item?id=13976567

J.P Morgan upgrade and other miscellaneous articles:
http://www.marketwatch.com/story/twilio-could-ride-amazons-c…
https://techcrunch.com/2016/07/05/twilio-now-helps-aws-send-…

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I have finally taken the plunge with TWLO. I like to think that there is so much upside potential, and with limited downside from a potential AMZN acquisition

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https://news.ycombinator.com/item?id=13976567

This link originally posted about Twillio is actally more interesting when the discussion turns to the power of Amazon
It’s control over the retail space now extending to software used in the Cloud

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https://news.ycombinator.com/item?id=13976567

This link originally posted about Twillio is actally more interesting when the discussion turns to the power of Amazon
It’s control over the retail space now extending to software used in the Cloud

One comment I liked.To paraphrase,
the steep part of the J curve starts when the point is reached where companies are no longer looking for reasons to use the product and switch to trying to find reasons not to use it.

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http://blog.fenero.com/amazon-connect-is-not-only-over-price…

A self-serving analysis, but may prove insightful. I don’t have time to delve in it at the moment but have an interest in doing so.

Tinker

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