TWLO Article…

Here’s an interesting piece of market data from the article. I hadn’t seen this before.

The research firm IDC expects the cloud-based API A2P SMS (messaging) market, which is TWLO’s bread and butter, to grow from ~$222 million in 2015 to ~$8.6 billion by 2019. This will be the primary driver of revenue growth, which I expect to total $370 million in 2017.

That’s some pretty heady growth!



Agreed AJ - I topped up this week to take a full position.

<<<The research firm IDC expects the cloud-based API A2P SMS (messaging) market, which is TWLO’s bread and butter, to grow from ~$222 million in 2015 to ~$8.6 billion by 2019.>>>

I bought my shares of TWLO back last week as mentioned on the New Paradigm board and the reasons why. If these numbers are accurate, it clearly demonstrates just how dominant TWLO is as most of the revenues in the industry currently come from TWLO.

This said, current estimates are predicting that revenue growth (although remaining robust) will slow down for TWLO. But the figure you cite from IDC shows revenue growing from 2015 through 2019 at more than 100% per year.

If this is accurate, either TWLO will grow much faster than current estimates, much faster, or TWLO will be losing large chunks of marketshare.

All in all, I don’t think most people have a good grasp on this market and technology as it relates to forward looking investment.

So I would not hold my breath with this prediction by IDC, but growth will clearly be strong nevertheless.


This is the snippet from IDC but it starts in 2014 and ends with the same $8.6B market in 2019.

I saw a market share for TWLO listed at 65%. Let’s say that drops to 50% and they remain the market leader.

Let’s say IDC is way off base and the actual market is only 25% of what they suggest, so $2.15B.
This leaves TWLO with $1.1B in revenue in 2019.
This is roughly a 58% CAGR.
I’d take that.



<<<This IDC study analyzes the global demand for cloud A2P messaging platforms. The A2P messaging market is large at $23.4 billion in 2014, and it is growing at a compound annual growth rate of 8% through 2019. Catalyzing the growth are cloud API messaging platforms. Using the principles of cloud economics and API-driven development, cloud API messaging platform revenue will surge from $106 million in 2014 to $8.6 billion in 2019, representing a share growth from less than 1% in 2014 to 25% in 2019.

According to Mark Winther, group vice president, Telecom, at IDC, “Cloud API messaging platforms are catalyzing growth because they are free to users for test and development and they make it possible to build applications in hours and charge wholesale-like per-message fees.”>>>

The latter bolded area is Twilio exactly. However, I am not sure if IDC is comparing apples to apples here. What Twilio does is disruptive because it is so much easier and cost effective to implement than traditional technology. Thus, Twilio taking 25% marketshare (or API companies in total doing so) will cost much less than 25% of the $20 billion + market for existing technologies.

Nevertheless, yes, very strong growth, and one can indeed see how APIs can so quickly eat up marketshare.


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