Contents
Overview ...... 3
How the Pandemic Changes CPaaS Priorities? ...... 4 CPaaS features map ...... 5 The pandemic and CPaaS vendors ...... 6 The pandemic will pass, but digital transformation won’t ...... 9 3 pillars of CPaaS competition and differentiation in 2021 ...... 10 Machine Learning in media quality ...... 11 Video, Video, Video ...... 12 Diagnostics and analytics ...... 13 Didn’t you miss anything? ...... 13
Cloud Vendors Are Changing the CPaaS Landscape ...... 15 Why now? ...... 17 Amazon Chime SDK ...... 17 Azure Communication Services (AKA ACS) ...... 19 The new model for Video CPaaS? ...... 20 Why telephony is dying and communication is growing ...... 21 Winners...... 21 Losers ...... 22
Twilio Signal And The Future Of CPaaS ...... 25 Twilio Signal - past events ...... 26 Twilio By the Numbers ...... 27 Nike and digital transformation ...... 28 Twilio Microvisor ...... 29 Twilio Video WebRTC Go ...... 31 Twilio Flex ecosystem ...... 33 Twilio Frontline...... 34 Other announcements ...... 36 Machine Learning was missing ...... 37 The coming CPaaS fight is in the enterprise ...... 38
Choosing a WebRTC API Platform ...... 39
About the author ...... 40
CPaaS in 2020 - A market in transition Pg. 2
Overview
The year 2020 brought with it a transition in how we view and consume digital communications. A lot of the change can be directly attributed to the pandemic. With over a billion people now indoctrinated in how to conduct video calling and use it in many aspects of life, the old ways are not coming back.
This ebook offers a glimpse of the changes we are heading to in the domain of CPaaS - Communication Platform as a Service, trying to analyze how the vendors in this market are going to operate moving forward.
Each chapter is an article published on my bloggeek.me website during the months of September/ October 2020, covering a different aspect of this transition.
The first chapter maps the offerings of CPaaS vendors and outlines the change in their focus areas moving forward.
The second chapter deals with the entrance of Amazon Web Services and Microsoft Azure into this domain and how this will change the CPaaS market landscape.
The third chapter looks at the Twilio Signal event, analyzing the announcements made in that event. In past years, Twilio set the tone and path for the whole market. 2020 might be a different case.
CPaaS in 2020 - A market in transition Pg. 3
How the Pandemic Changes CPaaS Priorities?
CPaaS in 2020 - A market in transition Pg. 4 The pandemic is changing everything. CPaaS providers need to change their priorities and focus as well.
The pandemic is an epochal event. It caught the CPaaS industry somewhat ready, with gaps found in their video offerings. Behind the pandemic, a few other market changes are taking shape, affecting how CPaaS providers need to plan ahead.
I’d like to look at a few of these trends and outline what I see as the basis of CPaaS competition for the future.
CPaaS features map
CPaaS marketecture and features map
The diagram above shows the CPaaS features map. It is a kind of a marketecture diagram of the various bits and pieces that make up CPaaS.
CPaaS in 2020 - A market in transition Pg. 5 I’ve layered it from Infrastructure, through Communications Building Blocks and Higher Abstraction to the Simplified Runtime domain. While not all CPaaS vendors will fill all building blocks in this map, they all see it in front of them one way or another.
Here are a few things to note:
I’ve decided not to place Email or IoT in here though I could without much effort
The importance of each block will be different for different customers and will change over time. The pandemic certainly changed priorities shifting them towards Video for example
I am using the term Studio, though Flow is the one that is used by most of Twilio’s competitors
ML stands for Machine Learning and it has its place throughout the CPaaS product stack. More on that later
If I had to map priorities for 2021, I’d probably create this heatmap:
CPaaS areas of investment in 2020-2021
The pandemic and CPaaS vendors
In many ways, the pandemic is accelerating the need for CPaaS providers. The world switched en masse from one of physical interactions to a virtual one. This, in turn, exposed a few aspects in the CPaaS market.
Digital transformation fast forward
CPaaS in 2020 - A market in transition Pg. 6 The image above circulated on Twitter some time in March-April this year. It is spot on.
Digital transformation is here and it is here to stay. It came about a few years faster than expected and to get by, companies are relying more on communications and a lot of it comes today from vendors who use CPaaS or by developing the solutions needed on top of CPaaS platforms.
The thing is, in many cases, the increase is also catching businesses off guard, with call centers and support teams being overwhelmed with incidents. And that at a point in time where everyone is forced to work from home - including the call center agents.
This in turn, increases the requirements around technologies that assist in automation of processes and communication channels. Call deflection and agent assist solutions are taking center stage. This changes a bit how CPaaS vendors need to treat communication APIs, and especially what these APIs need to enable.
Are we looking now for more or less Uber-like solutions of matching a customer to a service provider? Or are we more about getting hold of the interaction’s content in real time and injecting insights into it, with or without a human agent?
I don’t have the answers, but I have a feeling that they are different than they were 9 months ago.
CPaaS vendors totally missed video
Yap. We had CPaaS vendors doing video. A few of them. And they’re just fine. Up until the point that video becomes important for everyone and that totally new use cases pop up in our market on almost a daily basis.
Zoom doesn’t mean a magnifying glass anymore. Nor is it talking about getting a closer look.
During the pandemic?
Daily officially launched. And raised money
Dolby.io launched
Agora raised some $350M in their IPO
CPaaS in 2020 - A market in transition Pg. 7 All of the above? Focus on video communications. None of them have any telephony roots or strong telephony capabilities. No phone numbers or SMS capabilities to speak of.
AWS decided it would be nice to join the frey, so they launched their own Chime SDK. With price points that challenge the existing players.
Twilio decided this month to lower their video price points. Cutting them down by some 60%.
8x8’s Jitsi is coming up with its own managed video API service, pricing it around MAU as opposed to the more common per minute pricing.
There’s a minor price war coming up around video APIs. It will be interesting to see how this plays out.
Lack of WFH tooling in CPaaS
WFH = Work From Home
Welp… we’ve built all these nice communication services, but we’ve designed them mostly to work for the office.
On premise call centers moved to the cloud by adopting CPaaS, which is great, but the workforce itself still came to the office. All calls and communications took place from a controlled and managed environment.
The pandemic has forced call centers of tens of thousands of agents to stop coming to the office while continuing to work. From home. How do call center managers know anything about the environment of the home employee? How can he make sense of the quality of experience his agents and his customers are getting?
CPaaS in 2020 - A market in transition Pg. 8 From the interest we see at testRTC in our qualityRTC service, there’s a real gap there. https://www.youtube.com/watch?v=YgR1ycQMjWk
Call this self promotion, but it is one of many areas where CPaaS vendors need to improve in order to offer a suitable WFH solution. Giving APIs is nice. Giving backend network insights and quality related dashboards is nice. Giving pre-call tests capabilities is nice. But I am not sure it is enough anymore.
Other aspects of WFH that aren’t catered for by CPaaS vendors? The need for noise suppression and background blurring/removal - to fit into the current work environments of call center agents and other workers.
The pandemic will pass, but digital transformation won’t
It was supposed to be a quick 2 months thing. Maybe 6. A year tops.
Then came Google and Facebook (not governments, because they can’t seem to be so realistic and pessimistic with their citizens), and simply let anyone work from home at least until July 2021. At least.
Fujitsu? Decided to cut office space by 50% in 3 years as the new normal.
LivePerson, an Israeli company with 1,300 employees decided to give up on its offices altogether and go 100% WFH. This saves money and apparently most employees prefer it while management doesn’t see enough of a degradation in production output.
This obviously isn’t the case everywhere. In a recent interview with the The Wall Street Journal, Reed Hastings, CEO of Netflix had this to say about remote work:
“I don’t see any positives. Not being able to get together in person, particularly internationally, is a pure negative. I’ve been super impressed at people’s sacrifices.”
To some degree, he is correct. It greatly depends on the type of industry and company.
CPaaS in 2020 - A market in transition Pg. 9 Dean Bubley says it best about business events: https://www.linkedin.com/posts/deanbubley_5grealised-industry40-5g-activity- 6710563512999022592-zhqc
My wife is a Pilates and Salsa dance teacher. She needs to work remotely now from time to time, with Zoom and recorded lessons. Her students? They’re fine with it, but whenever they can come over or do a face-to-face-in-the-flesh lesson - they’d take the opportunity.
This means that whatever it is CPaaS vendors are seeing as requirements may well stay and stick with them for the long run. What we have now isn’t a new normal, but there’s no going back to the old normal either.
3 pillars of CPaaS competition and differentiation in 2021
When I had to decide what are the main areas of investment for CPaaS when it comes to differentiation and competition towards 2021, I came to these 3 domains: machine learning, video and diagnostics.
There are two reasons why I chose these domains:
1 Renewed focus on IP based communications. WebRTC and VoIP are becoming paramount to the growth and future of CPaaS. SMS and phone numbers are great money makers, but they’re not the future. The pandemic threw us a few years into the future, accelerating this trend
2 Competing with in-house development. Phone numbers are complicated. Not because they are technically complex, but because they require haggling and contracting with multiple carriers around the globe, which gives an immediate advantage to CPaaS providers. With WebRTC that doesn’t exist anymore, and in-house becomes a bigger competitor to CPaaS providers. The domains below will increase the gap between build and buy for potential clients and also increase the perceived value of a solution
CPaaS in 2020 - A market in transition Pg. 10 #1 Machine Learning in media quality
Noise suppression. Background replacement. Super resolution. Bandwidth estimation. Packet loss concealment. …
All these are algorithms in the media processing domain affecting the user experience in communications. Like everything else they are now shifting towards using a lot more machine learning than in the past.
The current forerunner in importance and mindshare is noise suppression, with a lot of partnerships and M&A activities around it.
When it comes to machine learning in media quality, what are CPaaS vendors doing today?
Almost nothing at all.
Dolby.io have noise suppression and other audio enhancements
Agora actively invests in machine learning. They’ve spoken about it at Kranky Geek multiple times, around super resolution and video encoding
AWS added noise suppression to Chime, which is most likely part of the new Chime SDK. They even won an award for their noise suppression capabilities
The rest? Not doing much about machine learning, researching or doing bots.
This cannot last.
We’ve already seen how WebRTC is being unbundled for the purpose of differentiation. That differentiation will come in the form of optimizations, mostly done by use of machine learning.
What will vendors do? Especially when we see the leading UCaaS vendors actively investing in machine learning media processing capabilities? This sets the bar to what a communication service needs to look like, and without such capabilities, why should I as a developer use that CPaaS vendor?
CPaaS in 2020 - A market in transition Pg. 11 #2 Video, Video, Video
Tony Robbins going virtual. Is this a CPaaS implementation???
Did I already say we’re in the year of the video?
It is.
A billion have been indoctrinated over a period of 1 month this year on how to use Zoom. don’t nitpick me on the exact number please. My mother now users Zoom in her daily life of a variety of activities, including a book reading club she joined
Many CPaaS vendors had video capabilities but they usually amounted to 1:1 interactions or small group sizes. There isn’t a day going by where I don’t get a new requirement from someone that CPaaS providers can’t cater for today. Many of these are in the domain of broadcasts and large groups (100 or more participants). Using CPaaS for them today feels like hacking at best. Impossibly challenging at most.
There are many areas where CPaaS providers are lacking when it comes to video. Here are the few that immediately come to mind:
What we are seeing is a rapid growth in the feature set and requirements of video centric use cases. These needs to be addressed. As a simple example, how do you do a live session with one presenter streaming to a large audience and the audience in turn sending their own video to the presenter, so that the presenter sees them all at the same time (or can alternate between them)?
There’s a blurring of the lines between voice, video, broadcast and streaming. There’s a need to seamlessly switch from one to the other. Broadcast and streaming comes today predominantly from non-CPaaS vendors. There’s a growing pressure for these to be wrapped into CPaaS for interactive use cases
Price points of video services need to be adjusted. With the change brought by AWS Chime SDK, and the pricing model of 8x8 JaaS, there are bound to be changes for other CPaaS vendors. This is imperative, especially when build vs buy decisions rely so heavily on back of the napkin calculations of minutes use multiplied by a static number
CPaaS in 2020 - A market in transition Pg. 12 Location of data centers and the latency brought about due to it. Most CPaaS vendors have 10 or less data centers they operate from. Now that everyone is using video, this just isn’t enough. It might be nice for voice calls in call centers, but video calls the world over are different - and they take place a lot more locally within regions and countries now, so having data centers closer to users is becoming more important than ever
The investment in video communications in all its facets will be important to stay competitive in this space.
#3 Diagnostics and analytics
It is great that you can communicate, but what happens when things go haywire?
In my recent round of updates I am doing for my Choosing a WebRTC API Platform report, many of the vendors made sure I know they have a dashboard for quality and network monitoring. Different vendors give it different names, but they all understood that unlike telephony, there’s a need for insights here, especially since networks are unmanaged.
It isn’t about me as a client understanding if the CPaaS vendor is doing a good job, but rather about me understanding my users’ networks and experience. Current dashboard solutions will need to evolve further to give the insights their customers are looking for.
Didn’t you miss anything?
In my future of CPaaS article from last year I mentioned a few additional trends. Some of them have been reiterated here, though from a different angle and with a different narrative that fits better with the changing times.
There were three topics that weren’t mentioned here yet, and I want to give them a bit of room and explain where I see them in 2021 with CPaaS. nocode/low code
Still a thing. Serverless, Flow, Zapier integration, drag and drop tools. All there. All needed.
CPaaS in 2020 - A market in transition Pg. 13 For the most part, CPaaS vendors seem to be content with the current state of affairs and the current tools they have. Investment in this domain in 2020 didn’t yield anything vastly different, new or interesting.
The domain of nocode is still relevant and interesting. For now, it seems to be mostly limited to the telephony (and voice) aspects of CPaaS.
CCaaS and UCaaS
The lines are blurring elsewhere as well. Areas of IoT (below), messaging and notifications, live streaming - are all suitable adjacencies for expansion of CPaaS vendors.
The largest areas though are CCaaS and UCaaS: contact centers and unified communications
Acronyms will be tricky here. So bear with me.
CCaaS and UCaaS are investing heavily in ML. A lot of it now is around #WFH
CPaaS is going up the foodchain, mainly after CCaaS. Some do it directly (Twilio Flex), others pivoting sideways to conversations (MessageBird Omnichannel Chat Widget)
UCaaS is vying towards CPaaS, introducing their own APIs and even CPaaS offerings
In another world, just next by, other SaaS solutions are blurring their lines. Gist (the chat widget I am using on my WebRTC course site) announced to its customers that it is releasing a full fledged CRM. From conversations to CRM.
CRMs in turn, can use CPaaS vendors directly to build up their own CCaaS offering. With the higher level abstractions geared towards customer engagement, CPaaS vendors now offer a simple route for CRMs in this direction.
This will continue, though I don’t see it as direct competition or real differentiation within the CPaaS domain itself.
IoT
Twilio seems to be the only CPaaS vendor investing in the Internet of Things. It acquired Electric Imp earlier this year. The acquisition wasn’t made with much fanfare, as this isn’t the main focus of Twilio and the current market is interested less in IoT than it is in video calls.
Is IoT part of CPaaS? Time will tell.
I believe that it is, but for now, only Twilio seems to be investing in that domain where none of its other immediate CPaaS competitors have the appetite for it. This will not change in the next couple of years as focus for CPaaS is elsewhere at the moment.
CPaaS in 2020 - A market in transition Pg. 14
Cloud Vendors Are Changing the CPaaS Landscape
CPaaS in 2020 - A market in transition Pg. 15 Amazon Chime SDK and Azure Communication Services mark the entrance of the cloud giants to the CPaaS space, and they are doing it from a WebRTC API angle.
Ever since Twilio became popular, a question was raised over and over again:
When will one of the large IaaS players (Amazon, Microsoft or Google) acquire them or start competing with them directly?
There was no good answer. At least not until 2020, where 3 things happened:
1 The pandemic hit us and we had to stay at home and shelter, or whatever
2 Video exploded
3 Amazon Web Services and Microsoft Azure both launched their CPaaS offering
This. Changes. Everything.
(it doesn’t. It changes only some things, but bear with me) https://www.linkedin.com/posts/tsahi_webrtc-in-cpaas-amazon-has-amazon-chime-activity- 6716309527840468992-gc6e
I already discussed how the pandemic changes priorities for CPaaS vendors. This new development is going to make things more of a mess.
CPaaS in 2020 - A market in transition Pg. 16 Why now?
Amazon Chime SDK was already announced and launched close to the end of 2019. They already have customers and success stories under their belt. Why am I just now getting to look at how IaaS vendors are changing the market?
Probably a bit because I am doing the update to my WebRTC API platforms report this month. But also because of Microsoft’s announcement of their Azure Communication Services.
Amazon Chime SDK
Amazon started the work to video communications by the introduction of Chime a few years back. Chime is an enterprise communication service (in the UCaaS space), which is akin to Zoom, Google Meet and Microsoft Teams. It enables companies to communicate internally and externally via video and voice with a better set of collaboration tools than just phone calls.
For some time now Amazon Chime was also offered as a whitelabel solution that vendors could “make their own” and integrate it with their service. But it doesn’t allow for much flexibility in terms of the workflow, business logic and user authentication. This has led Amazon to introduce the Amazon Chime SDK.
CPaaS in 2020 - A market in transition Pg. 17 The Chime SDK is one rung lower in the stack. It enables a developer access to the logical building blocks of communications, offering a pure communication API that can be used to connect to any other service. A direct competitor to the other CPaaS vendors offering video capabilities.
What Chime SDK did to really disrupt the market was lower the price point per minute. It comes at a rate of $0.0017 per user per minute. Twilio answered with its own price drop in September 2020:
The new rates are still above the Amazon Chime SDK price points, but they are 40% their previous price points.
It should be noted that peer-to-peer calling available in Twilio Programmable Video is at $0.0015, lower than the Amazon price, but of a slightly different service and feature set.
What Amazon is “selling” here? The AWS story. From the main Chime SDK page:
CPaaS in 2020 - A market in transition Pg. 18 AWS Lambda is already there. Connectivity to other AWS services are also part of the bigger spiel.
Azure Communication Services (AKA ACS)
Microsoft just announced Azure Communication Services in a public preview. This is a full CPaaS offering that includes Video, Chat, SMS and Telephony calling. The interesting tidbits alluded to in the announcement:
Azure enabled, with all the knobs and pieces to connect it to other Azure services; along with the security and compliance of the Azure cloud
Connectivity with Microsoft Teams, which isn’t available yet in the public preview https://www.youtube.com/watch?v=49oshhgY6UQ
Watch that video above. There’s a visual explanation of remote visual assistance. I’d never think of explaining embedded video communications or programmable video communications this way - because I am in the industry for this long. What Micsoroft is doing here is educating the market in the most basic way possible. Something we were missing in our market without even knowing it. This type of an approach can work well in the enterprise space, which hasn’t adopted such services in droves just yet.
What makes this so interesting is this:
1 Microsoft is the only CPaaS vendor who has a huge UCaaS offering. Huge as in up to 5B (or more) meeting minutes a day. Starting off with the same underlying scalable infrastructure means resilience, reliability and scale
2 This is part of Azure and not tied to Teams. Like the AWS Chime SDK offering, the tie in with machine learning in their compute cloud brings value to developers using Azure already
3 Microsoft has Office as another huge asset. If they can make the connection to it here, this is another great differentiator
CPaaS in 2020 - A market in transition Pg. 19 On pricing, Microsoft was a bit more traditional and less bold than Amazon, sticking to the $0.004/minute price point the market seems to have adopted.
The new model for Video CPaaS?
Even before Amazon and Microsoft joined this space, there were two objectives you could see in the mid-term and long-term roadmap for video CPaaS vendors:
1 Add support for machine learning
2 Introduce higher level of abstraction
These map where the new video CPaaS is headed, and the fact that Amazon and Microsoft both come with this “built-in” will accelerate things further.
Machine Learning
Everyone’s doing machine learning these days, and it is part of the future of communications and WebRTC.
Amazon Chime SDK will be offering their noise suppression capabilities. Connect to Kinesis and enable access to all their other machine learning services.
Microsoft in their launch already mentioned Azure Cognitive Services as something that plays/will play nice with ACS.
Other CPaaS vendors are figuring out their way in this space as well, but part of their offering is usually how to gain access to the media for… sending it to the cloud for machine learning analysis. That cloud is going to be AWS and Azure more often than not. Being in that cloud to begin with is going to be an advantage for these cloud vendors and their CPaaS offerings.
Also remember that cloud vendors live and breath machine learning already. CPaaS vendors? Less so.
CPaaS in 2020 - A market in transition Pg. 20 Higher abstractions
Everyone in this space is talking about simplicity now.
How can I get developers to do their work in hours versus days. Days versus weeks. Weeks versus… no… weeks is too long already.
While this is unrealistic for a full fledged, polished service, it is something that works well towards an MVP or a first stab at a ready product.
Some do this by offering open source or reference applications on top of their CPaaS APIs. Others by offering this as a set of ready-made and highly configurable widgets.
It doesn’t seem like anyone has cracked the code of what is needed here, but the growing focus shows there’s something missing. Especially if we want developers to need to know less about WebRTC and media routing and more about their application logic.
I think that Amazon and Microsoft joining this market will speed up the efforts in this domain, as companies search for differentiation and quick onboarding.
Why telephony is dying and communication is growing
Both Amazon and Microsoft are leading here with video, adding chat and telephony later. Later can be immediately after the initial launch, but it is still later.
In the past it made sense to do the opposite. Lead with PSTN and SMS as money makers, and add WebRTC voice and video, waiting for them to grow in adoption.
Taking the opposite approach shows where the future of consumption is.
Winners
Who are the winners when CPaaS is done by the cloud vendors?
CPaaS in 2020 - A market in transition Pg. 21 Users
If cloud vendors are joining this game, it means there’s enough $$$ in this market to make it interesting, which means more users are consuming such services.
The market education that these cloud vendors are capable of doing and their reach is higher than the other CPaaS vendors, excluding maybe Twilio. This will end up with more enterprises and businesses offering such services and end users using them.
Tier 1 cloud vendors
Amazon and Microsoft. Their timing couldn’t have been better.
If I haven’t known that Bill Gates is causing the pandemic so he can chip us all when his vaccine comes to market and causes all birds to fall from the sky due to 5G, I’d might end up saying that Jeff Bezos is to blame because he wanted the Chime SDK to grow in market share.
In all seriousness though, this gets both Amazon and Microsoft in front of the developers that use them for additional types of services that these developers are going to consume.
Smaller cloud vendors
Digital Ocean and Oracle.
Why are they winners? I am not sure how Twilio can continue running Programmable Video on top of AWS and compete with AWS Chime SDK on price and geographic spread.
Same for the other CPaaS vendors who might be using AWS or Azure. They will be thinking hard if they want to keep their media stacks on these platforms or move them elsewhere. They can move them to Google Cloud, but Google just might introduce the same capabilities and become a competitor. Next in line will be Digital Ocean and Oracle, both cloud vendors that are carrying real time media traffic already. If I were a sales person there, I’d pick up the phone today and call the CPaaS vendors one after the other...
Developers
A definite win. More choice. In clouds they already use. With a price war coming up.
What’s there to lose?
Losers
Who are the losers when CPaaS is done by the cloud vendors?
CPaaS in 2020 - A market in transition Pg. 22 CPaaS vendors
They now have more competition. And not from smaller startups, but rather from the leading cloud vendors.
Cloud vendors already cater to developers, and a larger audience of developers.
Things are going to get interesting for these vendors, as they need to rethink differentiation, their own infrastructure and their pricing.
Twilio
Twilio is the leading CPaaS vendor today.
They are using AWS. Everywhere.
This is definitely hurting them and will hurt them more moving forward.
Out of all the threats to Twilio, having cloud vendors competing head to head with them was the biggest one, and it is now happening.
It made sense for someone like Amazon to acquire them and use them as the communication stack for AWS. now it won’t happen.
Maybe Google will acquire them, though this seems far fetched to me.
3 leading cloud vendors.
Amazon
Now has AWS Chime SDK
Lots of adjacent services for developers
Microsoft
Now with Azure Communication Services
Lots of adjacent services for developers
Owner of Microsoft Teams, used as the underlying technology and media stack, with the ability to connect ACS to Teams if and when needed
Got Office 365 as another huge asset
CPaaS in 2020 - A market in transition Pg. 23 Google
Nothing in communication APIs
Owner of Google Meet and Google Duo
Leveraging RCS with carriers and in Android
Has G Suite and Android as huge assets
Has Chrome and Chrome books as assets
Did I say no communication APIs?
Google is left behind in its communication APIs for developers, which is sad, considering they are the main driving force behind WebRTC.
I wonder if and when will Google close this gap.
Developers
This will definitely rattle the existing vendors. Some of them might not make it through. So choice will again get a wee bit limited as this plays out.
While cloud vendors are great, their support isn’t the best. They tend to offer support to the smaller developers and companies through third parties and not directly, so there’s going to be less of that available. And that for a domain that is still very complex in its nature.
Developers both win and lose from this development.
CPaaS in 2020 - A market in transition Pg. 24
Twilio Signal And The Future Of CPaaS
CPaaS in 2020 - A market in transition Pg. 25 Twilio Signal 2020 occurred virtually this year. The number of new announcements or market changing ones was low compared to previous years. I expected more from Twilio as the leading CPaaS vendor.
Twilio Signal is Twilio’s yearly event where its major announcements are made. It is also a gathering place where customers, partners and even Twilio CPaaS competitors come to meet. This year, as all other events, Signal was virtual. Twilio built its own hosting platform and event experience and did a good job at that.
Twilio Signal - past events
I’ve watched the keynote twice, and several of the other sessions, including all major announcement sessions. I came out of this feeling a wee bit disappointed. There was nothing really interesting or groundbreaking this year. Especially not if you compare it to some of the previous years:
2015 - Copilot, Video, IP Messaging, ...
2017 - Engagement cloud; shifting from low level building blogs to higher abstractions. Especially with Twilio Studio
2018 - this year was about Flex, and moving into contact centers directly
2019 - Twilio Conversations, Media Streams, SendGrid (email), Twilio CLI, ...
In 2020, we’ve seen Twilio Microservices (the Electric Imp acquisition), Frontline, Video Go, Event Streams and Verify Push.
CPaaS in 2020 - A market in transition Pg. 26 Twilio By the Numbers
The main keynote by Jeff Lawson, Twilio CEO, had 3 components to it, with 3 main messages:
1 Twilio is big
2 Social good
3 New product announcements
I’ll focus on the big and new parts here.
Twilio is now 12 years old and it has accomplished a lot. Jeff threw the “Twilio is big” numbers too fast for my taste, not even letting some of the big numbers register in our minds properly.
Here are the numbers. I tried aligning them with last year’s numbers from Twilio 2019:
2019 2020 Interactions 750B 1T Unique phone numbers 2.8B 3B Calls/minute 32,500 - Peak SMS/second 13,000 - Email addresses 3B/quarter 50% Video minutes - 3B Customers 160,000 200,000+ Developers 6M -
CPaaS in 2020 - A market in transition Pg. 27 What the numbers mean
I still don’t understand what interactions mean, but the number is growing ridiculously fast, so it must be a good thing (I’d love to know how it is calculated)
Voice and SMS is out (no calls/minute or SMS/second numbers this year)
Unique phone numbers indicates reachability and 3 billion is a nice number, showing decent growth from last year
Email moved from a number to a percentage, making it even less accurate or interesting. How would one know what an email address represents? There are so many of them that are spammy or just an alias to other addresses.
For the first time video is important to Twilio. 3 billion is a large number, but not overly so (more about this later)
The number of customers has grown significantly
The developers number was useless to begin with and is finally not shared at all
The “new normal”
Jeff alluded to the new normal, forced on us due to the pandemic. In many ways, this has been the main theme of Signal and the sessions.
My gripe with the “new normal” moniker to our situation is that there isn’t anything normal about it and it isn’t really here to stay. https://www.linkedin.com/posts/tsahi_there-is-no-new-normal-at-the-moment-activity- 6718460695651868672-R-8m
Yes. We are seeing an accelerated move towards digital transformation and the cloud, but some of this shift, and especially the high usage in some sectors (such as education) aren’t here to stay post- pandemic.
For me, there’s no “new normal”. Just a transition to one, which will take time. How the future is going to look is hard to say from our current position.
Which leads me to the interview Jeff did with John Donahoe, Nike CEO.
Nike and digital transformation
Jeff picked John Donahoe as the first person to interview during the keynote. It is an interesting choice.
I found it a tad ironic to get an explanation about social good and how Nike in all its years promoted social causes. It got me thinking about the Nike sweatshops. Other than this little history reframing that was done, the interview was quite good.
CPaaS in 2020 - A market in transition Pg. 28 Two sentences that John said really resonated with me:
“Every business in the world is embracing digital transformation. We all have no choice”
The shift towards making businesses more digital has been inevitable.
Just think of all the on premise contact centers and what they now have to do when all of their agents are working from home. Or how all brick and mortar stores need a digital footprint to be able to even stay in business and sell throughout the quarantines.
“There is no finish line”
I should start using it myself.
There are a lot of discussions around build vs buy that I participate in, especially when it comes to the decision to build a WebRTC infrastructure versus buying an existing one via CPaaS vendors. In many cases, the argument and focus is on the initial development effort and a lot less on maintenance. The thing about maintenance is that it is almost as hard as the initial development, especially because there is no finish line - the product team will always ask for more features and capabilities which will drive more investment.
Twilio Microvisor
The first announcement made during the keynote was about a new product - Twilio Microvisor.
The Twilio Microvisor is an extension of the Twilio Super SIM and its Internet of Things initiative, which many don’t even couple and view as CPaaS (I’ve been ignoring it as well).
CPaaS in 2020 - A market in transition Pg. 29 The world of IOT and M2M is a challenging one. It includes different networks and carriers, differences in geographies and regulation, different hardware devices and chipsets.
Earlier in the year, Twilio acquired Electric Imp. This acquisition is now the Twilio Microvisor.
Up until now, the only real touching point that Twilio had with the physical world was their Super SIM. With Microvisor (and Electric Imp) that changes, and Twilio is mucking around with microcontrollers, firmware and hardware.
It the special announcements session, Evan Cummack, GM of IoT at Twilio, explained that there was a gap in the market - as a developer you either had to begin from scratch or use readymade solutions:
He ignored a few of the competitors for the Twilio offering, but these are less flexible and open anyways.
What Twilio is doing with Microvisor, is taking care of a few important aspects of IOT development:
Secure Boot
Secure FOTA (Firmware Over The Air)
Secure Debug
Secure Communications
CPaaS in 2020 - A market in transition Pg. 30 The secure part here is key, as it is the one thing we struggle with greatly in IOT these days. This solution will remove a lot of the headaches of IOT development and get more products released.
It is also where Twilio is competing not with other CPaaS vendors but rather with cloud vendors, who also started offering IOT tooling in recent years.
Twilio Video WebRTC Go
Coming from the Video and WebRTC space, this is where I am most frustrated.
The need and growth of video
With the pandemic going on, Twilio had to do something about video, an area where little investment on their part has taken place. Until 2020, this has been understandable. Growth came from elsewhere and it didn’t seem like video is that important.
All this has changed. Zoom exploded, Agora.io had a great IPO, and Twilio itself saw an increase of 500% of daily usage for its video.
The one to talk about Twilio Programmable Video was Michelle Grover, Chief Information Officer. Her part of the keynote revolved around the market need. The main market verticals here were retail and health.
It was more a reminder that Twilio is doing video than anything else.
The new WebRTC announcement
The new announcement? Twilio Video WebRTC Go
CPaaS in 2020 - A market in transition Pg. 31
What is Twilio Video WebRTC Go?
A free, hosted WebRTC service
Peer-to-peer, 1:1 sessions only
Limited to 25 GB/month of TURN for media relay
For context, pricing of 25 GB/month on Twilio’s TURN servers in the US is $10/month.
If you developed your own signaling and your own application, relying on Twilio’s TURN servers, then switching to Twilio Video WebRTC Go will save you $10.
But what you really get here is Twilio Video P2P that costs $0.0015/minute. In this configuration, you get the full infrastructure and support of Twilio’s signaling, logging and SDKs practically for free if your service is smaller than 25 GB/month of TURN media relay. How many video sessions can this accommodate? That’s something you’ll need to calculate.
For Twilio this is a win, as it gets more companies to adopt its Programmable Video at a very low price to Twilio (remember - video isn’t a serious money maker for Twilio yet, so helping these smaller users to grow their business and then have them start paying is just fine). With all the video API services out there, a free offering from a large vendor is a first. While limited, it is probably useful for many companies starting their way with 1:1 video calling.
On open source and Twilio
The fact that Twilio is calling their reference apps “Open Source Video Collaboration Apps” is a bit silly. These are references/samples running on top of the Twilio Programmable Video API and are not meant, designed or easily usable on top of any other vendor or on top of any other infrastructure.
CPaaS in 2020 - A market in transition Pg. 32 Calling a piece of code, no matter how big, open source, while forcing its user to consume other paid services in order to use it is not exactly open source.
This isn’t to say that this open source reference app isn’t useful. It surely is most useful. It gives developers a better starting point for their application, and Twilio has taken the time at Signal to offer a session titled “Accelerating Development of Collaboration Apps with Twilio Video” dedicated exactly to this.
It is a trend I see of CPaaS vendors going towards higher level abstractions. Twilio is doing that with nocode (=Twilio Studio), programmable enterprise (=Twilio Flex), reference apps for video (this one) and now with Frontline (later in this article).
Nothing new under the sun here
For me this says that Twilio hasn't invested in video as much in the last year or two. If they had, they would have announced something more thrilling and interesting. Maybe larger meetings, above 50 participants? Broadcasting capabilities? Noise suppression? Something...
Twilio Flex ecosystem
The keynote and the session had a lot of Twilio Flex content in them. This is less about developers and more about contact centers.
In this event, Tony Lama, Vice President, Contact Center Sales at Twilio mentioned in brief the fact that many features were added to Flex, but didn’t really delve into them too much. The focus was on the fact that Flex has customers and now has a thriving ecosystem of partners as well.
CPaaS in 2020 - A market in transition Pg. 33
The main target for this year were the on premise contact centers - this is where Twilio is setting its sights - in the transformation these contact centers are going through as they are heading to the cloud (forced to do so earlier rather than later due to the pandemic).
This is why Twilio decided to focus on the ecosystem, making it into a big announcement:
This targets exactly the on premise contact centers, where large deployments with many agents and a lot of custom integration code and features were added over the years. An ecosystem around Flex gives Twilio the reach it needs.
It is also why Twilio introduced its latest Flex partner - Deloitte Digital - who offer system integration in this target market.
Twilio Flex and its current set of announcements is less about CPaaS and developers and more about content center as a service (CCaaS).
Twilio Frontline
In that vein, the announcement of Twilio Frontline was made.
CPaaS in 2020 - A market in transition Pg. 34
Interestingly, this was introduced by Simon Khalaf, SVP and GM, Messaging at Twilio.
Twilio Frontline is a new complete, closed, mobile application and service which enables employees in a company to directly communicate with customers through messaging channels.
The main benefits touted about Frontline? SSO (Single Sign-on) and CRM integration
Both of these features aren’t building blocks or APIs at Twilio, which begs the question why not
There’s nothing about programmability, APIs or building blocks here. This isn’t something by developers for developers
This is far remote from the developer roots and target audience of Twilio, so it will be interesting to see how this plays out and redefines Twilio itself. My guess is that Frontline started as a skunk works project during the pandemic, one that turned into a new product that is now looking for a home at Twilio and within its bigger storyline.
I wonder though, was this built on top of Twilio Conversations, which was introduced at Signal 2019, or is it something implemented on top of Twilio Flex?
If this was implemented on top of Twilio Flex (which I believe it was), then why is the SVP and GM of Messaging at Twilio the one introducing it? And why wasn’t it designed, developed and even introduced as a programmable solution? Part of Flex. Maybe even an “open source application” on top of Flex.
Frontline is an interesting product. But what does it have to do with Twilio?
CPaaS in 2020 - A market in transition Pg. 35 Other announcements
There was little in the keynote of Twilio about APIs and CPaaS and more about the higher level abstractions and complete applications (Flex and Frontline). This shows a maturity level at Twilio, where most of the CPaaS domains are already well covered by their APIs.
Two additional announcements of new features/products were made, though not in the keynote itself.
Twilio Event Streams
That trillion human interactions? These are probably just events in the Twilio system:
This is the slide shared in the session discussing the new feature/product of Twilio Event Streams. It isn’t a trillion but it is close enough.
What Twilio did was consolidate all of its events into a single hook, calling it Event Streams, offering a single integration point for collection of events. The first sink selected for these events is Amazon Kinesis, with more to probably be added later, based on customer demand.
Moving towards consolidated data management shows maturity and an increase in the customers that are using multiple Twilio products.
Twilio Verify Push
Another new product/feature is Twilio Verify Push. This enables a mobile application to be used as a trusted device/app to validate login on another device (as well as on the device itself). The end result is reduction in the SMS volume.
CPaaS in 2020 - A market in transition Pg. 36 While nice, I am waiting here for Google and Apple to close this gap and offer their own verification mechanisms to all instead of having application developers rely on third party services.
As for Twilio, this makes for a sensible and useful addition to their Twilio Verify service.
Machine Learning was missing
What was missing at Twilio Signal 2020 is AI and machine learning.
No really interesting improvements shared about Twilio Autopilot. No cool introduction of noise suppression or other media processing machine learning capability. Nothing.
There were a few mentions on how Autopilot is used by customers during the create bots in order to deflect calls and handle the volume (nice stories that we’ve heard would be the main use case for Autopilot already).
The only “real” thing around AI? At the end of the keynote, Jeff Lawson had his short “live” coding session.
This time, he went for using OpenAI’s GPT-3, a per-trained natural language processing engine. He made it understand TwiML constructs (the XML format used by Twilio sometimes) so that users can write a sentence of what they want, and the service would generate the TwiML for them. A nice toy to play with. I wonder what people would do from here with it, as it opens up a lot of questions, thoughts and ideas.
As we’ve seen in the first chapter, machine learning is one of the main pillars in post-pandemic CPaaS offerings. Twilio has the skill set inhouse to pull this off, but they need to focus there more than they are doing today. They should probably also partner or acquire in this space to keep in pace with where the industry is headed.
CPaaS in 2020 - A market in transition Pg. 37 The coming CPaaS fight is in the enterprise
The enterprise story of Twilio came at the beginning of the keynote. Jeff wanted to make sure everyone knew and understood that Twilio is ready for the enterprise and being used by the enterprise. The careful selection of guests throughout the keynote showed that as well - they were all established enterprises. No cool startup this time. No crazy garage developers. Just formidable businesses that existed for years.
I decided to leave this to the end since this is where Twilio is being challenged.
The challenge comes in the form of Amazon and Microsoft going towards CPaaS. Both of these vendors are:
Bigger, with a wider breadth of products and services targeted at developers
Attractive programs for startups, giving them free “cash” on their platforms
Better access and relationships with enterprises
Global coverage and partner programs that are richer in depth, breadth and reach
Amazon will probably introduce machine learning capabilities such as noise suppression as part of its CPaaS offering soon. They have it available in Amazon Chime, so placing it in the Chime SDK is the next logical step.
Microsoft runs their CPaaS on the same infrastructure that Teams is running on. Twilio touts 3B video minutes a year while Microsoft Teams has up to 5B meeting minutes a day. I am sure that it accumulates to a considerably larger number than 3B video minutes a year.
CPaaS in 2020 - A market in transition Pg. 38 Both Amazon and Microsoft have ways to go in stabilizing their APIs and attracting developers and attention to it. They might not be highly interested in this CPaaS business as much as Twilio is, so would probably never reach the same level of maturity and breadth of features and flexibility of Twilio. But they will surely win market share. Market share that could have easily been Twilio’s.
With 75% of contact centers still on premise, the enterprise market as a whole is still only starting its path towards digital transformation and with the new phrase I just adopted of “there is no finish line”, there is definitely room for growth for Twilio and its many competitors.
Interesting times ahead of our industry.
Choosing a WebRTC API Platform
There’s a lot of change in the CPaaS domain. I mostly look at these vendors from a WebRTC prism, but not only.
An update of my Choosing a WebRTC API platform report is now available, covering 24 CPaaS vendors over a span of 254 pages.
If you are looking to understand this domain better or need to select one vendor over another for an important project, then this report is for you.
CPaaS in 2020 - A market in transition Pg. 39
About the author
Tsahi Levent-Levi is a developer at heart. He has been working in the telecom and VoIP/UC industries of the past 20 years (and counting) in various roles: from a developer, to project manager, product manager and CTO. Most of that time, Tsahi was dealing with signaling and media products that were licensed to other developers who built their own products with them. This gives him a broad view of the market and an understanding of the challenges and opportunities that exist in the domain of VoIP.
Tsahi came across WebRTC when it was first announced by Google and saw the potential in it. Since then, he has been watching the WebRTC space closely and writing about it on his blog: BlogGeek.me. From a hobby it became a "profession".
Today, Tsahi provides consulting services around WebRTC, CPaaS and machine learning in communications, as well as offering an online course on WebRTC (webrtccourse.com). Tsahi is the W3C Evangelist for everything WebRTC related.
Tsahi is also the CEO and co-founder of testRTC, a company developing a testing and monitoring platform for WebRTC applications.
CPaaS in 2020 - A market in transition Pg. 40