The purpose of this CXTech Week 46 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.
You can sign up here to receive the CXTech News and Analysis by email. Please forward this on if you think someone should join the list, I also publish this on my weblog. And please let me know any CXTech news I should include.
Twilio fluffs its latest projections – a deeper dive looks a little more suspicious
I covered Twilio’s lower than expected projections in CXTech Week 44.
“But for the current quarter ending Dec. 31, Twilio forecast revenue in a range of $311 million to $314 million vs. estimates of $322 million. The company said it expects profit of 1 cent to 2 cents vs. estimates of 7 cents.
This soft guidance could be laying the ground for a block buster Q4, or we could finally be seeing all the competition and evolution in the market finally nipping at its heels. We’ll know next quarter.”
We didn’t need to wait a quarter, only a couple of days, to see what happened. It turns out they made a ‘math error’ (its arithmetic not mathematics, but enough on my petty peeves) in reporting their numbers. Just one more peeve, its method not methodology, methodology is the study of method.
Back to the Twilio story… Come on, the process for releasing quarterly numbers is so damned water-tight. It was not a mistake. I’m not a financial analyst and immediately picked up on the drop, and any one of the exec team reviewing the release would have seen the same. The risks associated with fluffing those numbers are considerable. Are they looking at different ways to play the market using projections? Or is there something else going on?
So I looked at insider sales, and on the 18th Oct Jeff sold $3.7M is stock (see update below). Which given his total holdings of about 5%, and net worth of $1.2B is a sale of about 0.3%, negligible. But still, it doesn’t look good to sell just before such a ‘mistake’.
And then a few days later this report raises its head, which made sense with the original projections. So likely it wasn’t a mistake, rather a disagreement over whether the WhatsApp risk should be mentioned in the projections. Its not a new risk, Uber was also a risk when they went IPO. I was surprised WhatsApp it still spending $50M a year with Twilio, and hasn’t migrated that over to other providers like Telesign, Vonage, and Tyntec a while ago. They all offer a better service given they have more direct carrier interconnect. But as my surveys have shown, “don’t fix what isn’t broken, especially if development is required” is a significant lock-in for many enterprises on Twilio. And looks like it also is with its big customers.
So the end result, it wasn’t an arithmetic
mathematic error, likely a disagreement on whether to include the WhatsApp risk in the projections.
Update: Jeff, George (COO), and Lee (CFO) have what is likely an approved stock dumping program so it’s not considered an event, as shown here. It’s interesting to note, Jeff has increased the monthly dump from 20k to 35k shares in September, to unwind his Twilio position a little faster. 2020 is going to be an interesting year for Twilio. Though I’m not winding back my revenue projections on Twilio yet.
iPaaS (integration Platform as a Service) is really just API Management with some pre-integrations. There are loads of them out there like, Axway, Cloud Elements, Apigee, AWS, Mulesoft, Zapier, IFTTT, etc.
The key is scope, Whendu is focused on contact center integrations with a small team of about 8. Which given the time, effort, maintenance of each integration seems a very small team. While the likes of Mulesoft are much broader API management general enterprise solution.
Also the Five9 founders were also the founders of Whendu. So the team has come full circle.
- I hate getting spam called.
- I wanted to put a barrier between myself and the caller and have the caller pay a price that I define.
- I wanted to create an incentive for me to pick up.
- I think it’s terrible that phone numbers are a source of identity, why not use a real source of identity?
- I wanted to get rid of providers that sell your number, your data, etc.
- I wanted to get rid of sim swapping
- I wanted to see if I could make phone calls using an Ethereum address
- I wanted to put more control of calling back into the receiver’s hands
This is only the beginning, more and more people will use the decentralized web to solve such communication problems, some focused on very specific pain points, others solving more general cases. As the decentralized web enters main stream developer adoption, we’ll see a new wave of telecom innovation, where the ‘network’ is owned by the people. But this is likely a decade away.
Synchronoss Advanced Messaging Technology Will Help Power a Fully Interoperable, Rich Messaging Application for CCMI New Joint Venture from AT&T, Sprint, T-Mobile and Verizon
So the technology behind CCMI will be the same as that used by the Japanese mobile operators. This is a step in the right direction, as I suggested back in 2018.
The challenge now is creating a single operational A2P framework so brands need only register once, not with multiple carriers or aggregators, and avoid carrier specific exceptions on content / message frequency / etc. Its structured with all the support tools specific to the many different businesses out there. A corner shop needs an A2P account with much different needs than a global brand. So it just works like LINE.
This is a challenge Japanese mobile operators are facing, they’ve put a tick in the box of cross carrier messaging, but the A2P business remains quite complex compared to LINE. It’s a business problem, not a standards implementation problem.
Telcos are no longer focused on telecommunications, they considered it commoditized. For everyone else that thinks communications is an exciting and fast growing business, TADSummit is for you.
Some of the telcos’ distractions given their commoditized view point include:
- 5G, unfortunately 4G is good enough for most customers’ internet access;
- AR/VR (Augmented Reality / Virtual Reality), trying to copy FACEBOOK, good luck;
- digital transformation, aka trying to catch-up;
- NFV, aka telco-special virtualization;
- RCS, over a decade trying to catch up with the 100s of IM services, and now misaligned to the market as the focus is still on message interoperability rather than the A2P business problem;
- mobile edge compute, mis-labeling a cloud computing category in the hope analysts do not notice;
- broader cloud compute services, which many tried a decade ago and then closed down or sold off;
- AI, big data failed, so let’s have another go and this time blame the software (AI) not the data scientists; and
- the sad list of distractions goes no from focusing on being a best in class telecommunications service provider. TADSummit is still here if you want to re-focus 😉
People, Gossip, and Frivolous Stuff
Andy Gent is now Director at Revector Technologies – DNA Tracker. Its a solution for phone / people tracking at airports. It reminded me of the solution from TruePosition, though knowing Andy likely provides a much more cost effective solution.
Charlie McNiff is now IoT Account Executive at Lenovo, moving from Telit.
Henning Schulzrinne is now a Technology Fellow at Senator Ron Wyden. Its great to see a Member of Congress getting the best advice possible on many tough technology issues facing America, particularly around privacy.
Michelle Reese is now the President of Internet of Things America.