The purpose of this CXTech Week 26 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.
Once Upon A Time In Tech
This is a long read from Akram’s Razor, but it’s well-worth it for the history of tech boom/busts. The question being considered is whether we’re in a cloud computing boom/bust cycle at the moment, how big is it, and what’s likely to happen. Though not definitively answered in the article (there’s a part 3 to come on how to manage the coming fall-out), it definitely sets out the a compelling thesis on the TAM (Total Addressable Market) problem being faced by all the “as a Service” businesses.
I particularly liked the review of the 1966-1969 tech boom/bust, something I’d not read about previously. Most of the other boom/busts are a nice recapitulation of recent tech history.
He also includes Shai Berger’s call center stack landscape, well done! Shai’s also running a session at TADSummit Americas (15-16 October, Chicago) on “Platform Evolution in Customer Service Communication” and presenting on “The Race to Control the Customer Service Messaging Channel”.
I loved Akram’s quote on the API Economy from the article:
“As for the ‘API Economy’ jargon, every new investing theme needs a nice marketing buzz-word. What this term means to me is that the idea of building a multi-billion-dollar business by writing a very thin piece of software to expose one back-end business process for other application developers to consume, which would have seemed farfetched to most developers even just a decade ago is all the rage today.”
And Larry Ellison is always good for a frank quote, here’s one from 2008 on cloud computing:
“The interesting thing about cloud computing is that we’ve redefined cloud computing to include everything that we already do. … The computer industry is the only industry that is more fashion-driven than women’s fashion. Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? It’s complete gibberish. It’s insane. When is this idiocy going to stop?”
Drastically summarizing the argument: Softbank using Saudi oil money is inflating the market. There’s a glut of tech IPOs: Uber, Lyft, Zoom, Slack, WeWork, Pinterest, PagerDuty, Revolve, Fastly, CrowdStrike, and Jumia. The new and old economies are starting to converge. A correction looks on its way, but its size, how it plays out, and how to manage that correction are to come in Part 3.
The Three Key Risks of Buying Twilio Stock
Risk #1: Does Growth Match the Price?
Risk #2: Gross Margins
Risk #3: Competition
Solid analysis on the risks Twilio faces, and overlaps nicely with the Once Upon a Time in Tech analysis at the start of this newsletter. Twilio will become a full stack enterprise communications enabler. And in the future will likely buy up channels that work well in particular markets, moving from enabling services to service provision. Bringing it into direct competition with Vonage, which is a full-service enterprise communication service provider (a telco that owns its technology – that’s a very rare situation and gives it an unmatched cost basis compared to most telcos).
The above trajectory for Twilio helps address the growth and gross margin risks, as the Enterprise Comms TAM is $200B+. The competition risk is more complex and needs to be examined on a customer segment / offer basis. For the big web companies, they use specific features like anonymous calling (e.g. when you talk with the Uber driver and do not see each other’s phone numbers), which the web company defines, not Twilio. So API provider switching costs are low compared to the savings.
For most businesses, switching costs are significant compared to the potential savings. Especially given Twilio is running on its own telecom app server. Building your CPaaS on open source projects like FreeSWITCH or Asterisk does not deliver a like-for-like service. Most businesses quite quickly use more than the basic function: call number A or send message to number B. This further adds to the switching costs. So there is some stickiness on the Twilio APIs, but as the offer moves into the services, with far greater service revenues, then the potential savings lower the switching cost barrier. I did say the competition question is more complex 😉
What will be interesting is when the API Economy correction comes (I’ve been pointing out the API con for a while), like the dot com correction, Twilio will likely not go away. But like we saw in the dot com correction, the fire-sale of assets and the convergence of the new and old economies could create some interesting opportunities in CXTech – I recommend you get the strategic planning done for this scenario now if you’ve not already started.
When Employees Are Using Software That IT Hasn’t Approved
Nice Harvard Business Review that I see happening more and more often in large corporations. That is, let the lines of business execute at the speed they need to be competitive. The central IT function changes from being the owner and controller of IT solution deployment to the “orchestrator” of an ecosystem of suppliers (including itself). That last point is critical, the CIO is now a competitive supplier to the lines of business, and if it can not be competitive, it gets out of the way and let’s the LoB choose the supplier best fit to its needs.
We covered this in last year’s TADSummit where Justin Haefner, Medtronic, presented on “Embrace the API Movement”. Diversity will continue to reign in the enterprise, and CIOs are becoming more adept at managing that diversity. When you read articles talking about enterprise messaging in a black versus white context, Microsoft Teams versus Slack, its old-school thinking. Both are going to be there, and the lines of business will decide which grows and which does not, not how often the CIO is taken to the golf course. Enterprise communication experiences will finally catch up to what we expect in consumer communication experiences.
West Telecom Services Expands Flowroute Solution to Deliver International Coverage
Flowroute have supported TADHack-mini Orlando since its inception in 2017. It’s great to see Flowroute’s continued growth as part of West.
West Corporation Announces Rebrand to Intrado
I’ve known Intrado for 2 decades, its a 9-1-1 and emergency communications infrastructure provide to telcos. West bough Intrado back in 2006, and it looks like West decided a brand change was necessary.
CPaaS: A Great Platform that Transforms the Way Enterprises Communicate
You heard eCPaaS (enterprise CPaaS) first from hSenid Mobile at TADSummit Asia. And you’ll be able to hack on eCPaaS at TADHack Chicago in October. This is a nice endorsement of what hSenid Mobile is delivering today.
New TADSummit Americas Sessions
As mentioned above Shai Berger from Fonolo will be presenting on “The Race to Control the Customer Service Messaging Channel.”
When it comes to text-based communication for customer service, a battle is heating up between the big messaging platforms. I’m referring here to Messenger and WhatsApp (both from Facebook), Apple’s Business Chat and Google’s offering called (for now) Google My Business Chat.
Each of those three control a channel (or channels) of communication used by a significant portion of the population. Apple though iMessage on Macs, iPhones and iPads; Google through Android; Facebook through its social networks. (Internationally the dynamic is different, but in North America, they are the only ones with power to change the game.)
Each has the same goal: to dominate business-to-consumer communication, but since they are coming at it from different directions, they can’t use the same strategy.
This presentation will look at how Facebook, Apple and Google are competing with each other; the ecosystem of vendors around them; and how proprietary messaging platforms compare with other
The one, the only, Dean Bubley will be giving the Closing Keynote: BYOSpectrum – Why private cellular is a game-changer.
The telecoms industry loves to claim that 5G will disrupt and transform industries. What it hasn’t realised is that the first industry that will get disrupted is telecom itself. New local or shared spectrum bands (such as CBRS in the US), programmable cloud-based cores, eSIM and various other enablers are making it much easier for enterprises, IT companies, cities and Internet/cloud players to build their own private 4G – and soon 5G – networks.
That’s not to say it’s as simple as installing Wi-Fi, but for various organisations from airports to oil companies to hospitals, it’s becoming a more realistic proposition. There are also various hybrids, where telcos can sell “slices” or local/enterprise MVNO deals, or allow companies to just run a separate private core network. Add in a new set of wholesale models (called Neutral Host), and the future wireless operator landscape looks very different from today.
We’re seeing the democratisation of “programmable cellular networks”.
tyntec and Ooredoo Announce Global A2P SMS Partnership
As A2P grows beyond SMS into broader messaging (WhatsApp, push messaging, etc.), and telcos understanding the benefits of partnering in CPaaS than trying to build a business in this maturing market segment. We’re seeing more telcos partnering up to share in the value created in A2P beyond wholesale SMS, using their channel to market in partnership with aggregators.
This is a small example from the previous article “One Upon a Time in Tech”, of new and old economies converging. There is still a tendency for telcos to want their own instance of the platform, as they consider communications to be their expertise. Which is sort of a technology-centric half-way house between the Vonage model of own all the technology and deliver globally, versus a partnership approach that focuses locally (in the OpCos’ countries of operation). But the halfway house lacks the compelling customer value proposition and competitive cost-basis of the other 2 approaches.
People, Gossip, and Frivolous Stuff
Sergio López Arias, one of our first TADHack winners from 2014 with Famous4Money is now a Python Developer at Aplazame.
Tien Nguyen Khac, another TADHack winner from 2017 and 2018, is now a Front End Developer at Rush.
Matt Millar, who I’ve know since his time at Adobe and will be presenting at TADSummit EMEA in November, is now CTO & Cofounder at Updraft.
Alan Percy is now CMO at TelcoBridges.
Bibi Rosenbach, who I’ve known for 2 decades since his company Personeta was a competitor to my start-up Teltier, announced he’s working on a stealth mode start-up.
Subscribe to CXTech News distribution list here.