The purpose of this CXTech Week 22 2020 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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Deutsche Telekom AG’s venture capital arm led Aircall’s funding round, which also included a new investment from Swisscom AG and fresh funds from existing investors Balderton Capital and Draper Esprit. It brings the company’s total funding to $100 million.
The UCaaS / CCaaS space is getting crowded, we’ll review some of the challenges that brings in the later article on 8X8. Earlier this year in CXTech Week 4 2020 we reviewed the importance of building up a channel model with the Aircall & CNSG partnership. Aircall are still, as far as I’m aware, running on Twilio which will need to change soon to better control costs and stop funding a competitor.
Automattic, the open source organization behind WordPress.com, WooCommerce, Longreads, Simplenote and Tumblr, made a $4.6M investment into New Vector, the creators of an open, decentralized communications standard called Matrix.
The investment by Automattic extends an $8.5M Series A last year, from enterprise tech specialists Notion Capital and Dawn Capital plus European seed fund Firstminute Capital and brings the total raised to date to $18.1M (which includes an earlier $5M in strategic investment from an Ethereum-based secure chat and crypto wallet app, Status).
New Vector’s decentralized tech powers instant messaging for a number of government users, including France and Germany. Other users include the likes of KDE, Mozilla (announced Matrix would replace IRC), RedHat and Wikimedia. I reviewed them in the Open Source Telecom Software Landscape, presented at TADSummit Asia 2020.
8X8’s recent results and activity show its getting crowded at the top of CXTech
When 8X8 reported fourth-quarter earnings, revenues rose 30% year-over-year, expenses rose by more and its net loss widened from the year-ago quarter. The stock plunged more than 30% in the days following that annoucement. Since 2017, 8×8’s revenues have risen 75%, but expenses have risen 85%, and hence the company’s net losses have widened.
Put simply, at the top of the crowded CXTech market, you have to spend to grow, and for some its spending more than you grow! 8X8 also announced a round of layoffs, 30% revenue growth yet layoffs shows the market is transitioning.
This is the challenge Aircall faces, its cost base is higher than its competition because it still uses Twilio, rather than an aggregator or carrier deals. The medium to large US enterprise market is now a game of scale. Focusing on EMEA and Asia could be a better option, however the strategy must be quite different.
Reasonable Twilio Analysis on how it needs another “breakout” strategy to continue its growth in stock price
While many analysts have upped valuations given the impact of COVID-19 reported in its last quarter Twilio reported, this analysis sums up the situation quite nicely. Twilio is a strong business with a good long-term growth trajectory. However, the stock’s current valuation is high, you’re paying ~22X revenue for a company that will likely grow revenues in the 30% area for the next few years. This is another example of crowding at the top of the CXTech market, as discussed in the 8X8 article.
I’ve talked previous of other trajectories for Twilio to address additional markets, which it’ll likely do through M&A. Bringing its TAM closer to $1T, as discussed in CXTech Week 8 2020.
At TADSummit Asia we had a panel discussion on the Universal API in Asia. Reviewing how the evolution in Telecom API consumer demand and the impact of COVID-19 in educating the market that telecoms need not be bought from your telco. The first battle of CPaaS is coming to a close, with VC funded winners and telcos relatively unaffected. The coming second battle will be far more disruptive. Its going to be a fun decade in CXTech!
Wrapping up TADSummit Asia
That’s a wrap on TADSummit Asia 2020. Through the month of May we’ve created an important milestone by documenting the status, latest thinking and best practices in Programmable Communications / Telecoms (CXTech).
Thank you to every one of the presenters and panelists for their excellent contributions. If someone were to ask me where to find a single resource with the latest thinking across programmable communications, the TL;DR of the TADSummit Asia Agenda is it.
I’ve segmented the presentations into 5 groups:
Industry Status Reviews
Open Source Telecom Software
Call for Sponsors and Presenters for TADSummit EMEA / Americas
As one door closes, another opens. With the completion of TADSummit Asia, our focus moves onto TADSummit EMEA / Americas in November.
The format will be similar to TADSummit Asia, with daily releases of fresh, original, and insightful content from presentations and panel discussions.
If you’re interested in presenting or sponsoring please get in touch.
And don’t forget in October 10-11th we have TADHack Global. We’ll be running most locations hybrid (that is both in-person and online). So if social distancing rules allow, you can finally get some in-person hacking. And if you’re avoid crowds, you can still take part. We’ve always allow remote entries, and your chances of winning are the same whether you’re in-person or remote.
People, Gossip, and Frivolous Stuff
Congratulations to TADHack winner Javier Carrion for starting a new position as Software Systems Engineer 1 (Web) at Design Interactive, Inc
Rob Malnati is now Chief Operating Officer at thatDot. I’ve known him since 2011 when he was at Leapstone (acquired by Motorola).
Boris Selitser is now Director of Product Management at Facebook, previously with Oracle/BEA since 2006.
Scott Snyder has started two additional position as Advisor at Penn HealthTech Advisory Board, and a Digital Economy Platform Senior Fellow at World Economic.