The purpose of this CXTech Week 25 newsletter is to highlight, with commentary, some of the news stories in CXTech this week. What is CXTech? The C stands for Connectivity, Communications, Collaboration, Conversation, Customer; X for Experience because that’s what matters; and Tech because the focus is enablers.
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Slack’s unusual direct listing pegged at $26 per share by NYSE for a possible $15.7 billion valuation
Note, Zoom is twice that market capitalization on a similar revenue, as reported in last week’s CXTech newsletter.
Slack is a messaging app, it has a great experience compared to Cisco and Microsoft’s offers, and like Zoom understands the importance of freemium. But it’s messaging. Yes there are lots of integrations and ottspott is a great example of how voice communications can be added on top. Slack has avoided adding RTC into the mix. Instead focusing on the core of messaging and all the associated workflows across enterprises and their ecosystems.
In their S1 filing, Slack reported that, for the fiscal year ending January 31, 2019, it had generated $400.6 million in revenue, up from $220.5 million in the previous year and up from $105.2 million in 2017. Slack also reported losses of $138.9 million for the fiscal year ending in January 2019.
Their customer / user numbers are:
- Daily Active Users (DAUs): 10 million
- Paid customers: 88,000, up 49% year over year compared with fiscal 2018
- Paid customers paying over $100,000 based on annual recurring revenue (ARR): 575, up 93% year over year compared with fiscal 2018
That’s $1570 per DAU, wow! I’ve migrated TADHack off Slack and onto Riot, tadhack.modular.im, as the limitations on the free Slack service made it unusable to the point we couldn’t even upload files. Usage did drop on the transition as it requires people to do something, however, the new Riot messaging platform gets used around our events.
Most businesses use multiple messaging platforms. We’ve discussed Mio in this newsletter several times in federating Webex, Microsoft, and Slack. They have an interesting survey on workplace messaging. As with all surveys, we need to understand the context. Mio are good friends with Cisco, so there is likely some Cisco-bias in the survey. On user experience they claim Slack and Cisco Webex Teams have equally as good user experiences. I find that suspect. I’ve used both and Slack wins by far, but perhaps my multi-workspace use cases and the variety of teams I work with around the world with Slack makes me biased.
But as I’ve stated before, diversity will reign in messaging, whether it’s personal or work. With China (WeChat) being the notable exception on diversity. Japan LINE is more consumer focused than business, however, I see WeChat widely used in Chinese businesses in preference to the IT provided messaging.
So here’s a vision of the future: a secure federated one, because enterprises (the customers) want that. Consumers aren’t that bothered on federation. Open source federated platforms and the decentralized web are getting better little by little. Which will limit the attempts of the big guys to enforce silos. Its analogous to telephony, where all the PBX systems interoperate over the PSTN.
But telcos have struggled to enable interop for value added services beyond voice, while open source based federation may just do the trick. But that open source / decentralized web vision is a long-play (2030+). The coming decade will be a battle field where the OS (multiple messaging apps and we tolerate the silos for the occasional cut and paste) and limited federation (Mio, Matrix (Riot, Vector, Modular), etc.) rule. In the limit there is no ONE conversation, so there will not be ONE messaging platform.
Nice article from Shai of Fonolo on CPaaS. As we’ve discussed previously, CPaaS is a contrived category from analysts. Whether its CPaaS, UCaaS, CCaaS, 2FA, etc. it’s all just services running on telecom app servers. Twilio, a CPaaS poster-child, is also a leader in the US SIP trunking market, is that CPaaS? Its management is through an API, some of the VAS are available through an API. Its definitely programmable telecoms / CXTech. A broader category, that captures the convergence we’re seeing across CPaaS, UCaaS, CCaaS, etc.
Another example on why using technology to define markets leads to poor analysis. Vonage is an enterprise focused telecom provider (offering global telephony, SIP trunking, CPaaS, UCaaS, CCaaS, and a range of other services). Is Twilio its closest competitor? Not really. It’s the business-focused divisions of the telcos like AT&T and Verizon who have a similar packaged offers. But Twilio does overlap and will increasingly overlap as its offer becomes ever more enterprise focused across: marketing, operation and customer care. Using technology to identify market segments is not very useful. It’s better to examine their customer base and who they view as the competition. Competition for $$$ defines markets, with ‘do-nothing’ being the greatest competitor we all face.
As Shai states, its getting vague, that’s why we use the terms Programmable Telecoms / CXTech. And why we run this newsletter to show how it’s all growing, converging, and sometimes a little confusing 😊
It’s nice to see the convergence of CPaaS, UCaaS and CCaaS getting broader discussion. Since 2017 we’ve been discussing this at TADSummit and demoing at TADHack, when Apifonica / Dzinga (CPaaS / UCaaS with a little but of CCaaS) was a sponsor.
This year we have broader discussion at both TADSummit Americas (Shai Berger of Fonolo, Thomas Howe of TEN DIGIT Communications LLC,…). And TADSummit EMEA with João Camarate Silva of GoContact and many more.
It’s all just services running on telecom app servers and open source dominates, just like web app servers (Apache and NGINX = 82% of market). As TADSummit is small we can have the conversations the incumbents drown out at larger events, you’ll not hear “video is the new voice” at TADSummit, if you do it will be followed by a round of laughter.
More coverage at a buy rating, Twilio continues to be hot with financial analysts.
Ribbon Research Unveils Comprehensive Insights, Trends and Opportunities for the European Enterprise Communications Market
Ribbon’s research shows that for companies responding to the survey, 73% of those with more than 1,000 employees and 72% of those with 100 to 1,000 employees who have not yet adopted UC expect to do so within the next 2 years.
I’m surprised at these numbers, the case for UC in many enterprises remains tough. Many are still learning about VoIP, and that their mobile phone can ring when their desk phone gets called. We may scoff, being industry insiders, but we’ve not sold the basics, rather the vision for too long.
Phone.com shows how to focus on the basics on their website. They’re selling UC, but in a way most people understand.
I’m amazed on demand SIP trunking is not the default service by now. Twilio took the lead in the US, which is about 50% of the global SIP trunking market, and now dominates in the US compared to the legacy TDM trunking from incumbent telcos.
Unified Communications Presents ‘Huge’ Partner Opportunity in Europe – reference my analysis from last year
In Europe the UC market is complex, and must be considered country by country. Last year I gave a quick summary in this weblog. There are channel opportunities, and existing IT focused providers can easily extend their offer into enterprise communications. But it has to be evaluated on a country by country basis.
Finally, a big thank you to the 100+ people that completed the Open Source Telecom Software Project Survey. I’m working through all the data and will share the results soon.
People, Gossip, and Frivolous Stuff
Matt McLarty, is now Global Leader of API Strategy at MuleSoft, a Salesforce company. I’ve known him since his Layer 7 Technology days. Mulesoft have been investing across the global in building developer awareness, keep an eye them.
Jared Porcenaluk is now a Software Developer at New Signature, a cloud-first, full-service Microsoft partner committed to delivering innovative technology solutions. Jared runs IoT Orlando, and has supported TADHack-mini Orlando since the beginning.
It’s sometimes fun reading the financial analyst reviews on companies, as in the limit numbers can only hide spin for so long.