Twilio Competitors Analysis : Top 5 Key Competitors

The communications sector is a multi-billion dollar industry that has become embedded in the fabric of our everyday existence through mobile phones and other devices. As the market leader, Twilio saw the opportunity to connect companies and customers early, building a robust platform to facilitate cloud communications.

With more and more people ditching the daily commute to work from home and with a significant number of companies opting to operate remotely on a full-time basis, the need for secure online communication services is stronger than ever.

Below, you can find an analysis of Twilio and its key competitors to see how it fulfills the needs of modern businesses and how its services compare to those of other companies.

Twilio: An Overview

Twilio Inc. is an American cloud communications platform as a service (CPaaS) that allows developers to build, scale, and operate customer engagement within software applications. It is based in San Francisco, California, and although it was founded as recently as 2008, it has already hit $1.76 billion in revenue as of 2020.

To get the company off the ground, Twilio raised $103 million in venture capital growth funding. In November 2008, Twilio Voice was launched – its first major project – allowing users to make and receive phone calls completely hosted in the cloud.

Twilio summarizes its organizational culture with the phrase “Twilio magic,” which embodies key ideas about how to act (be an owner; empower others; no shenanigans), make decisions (wear the customer’s shoes; write it down; ruthlessly prioritize), and ultimately win (be bold; be inclusive; draw the owl; don’t settle).

According to its website, Twilio’s mission is to fuel the future of communications. If you are interested in reading more about other companies’ values, we have compiled a list of the most powerful and enduring mission statements.

Recently, Twilio has made it onto PEOPLE’S 100 Companies that Care 2021, ranking 51 of 100. To achieve this, it provided $400,000 in grant funding to organizations working to ensure safe and fair elections.

Furthermore, when the company had to work remotely during the pandemic, Twilio provided its employees with $1,500 to make their work environment as comfortable and productive as possible.

Twilio Business Strategy

Twilio has a niche market business strategy, creating products that serve companies and developers to embed communications into their services. Prominent clients include Home Depot, Dell, Sony, and Nordstrom.

The company operates a subscription revenue model for the various services and products it provides:

Voice – customers can make and receive entirely cloud-based calls.
Client – Customers can communicate over VoIP to any mobile application or browser.
SIP Trunking – Customers can provision IP infrastructure with voice connectivity.
International – Customers can explore termination coverage, connectivity, and local, national, toll-free short code number availability in nearly 200 countries.
Lookup – Customers can find local-friendly number formats.
TaskRouter – Interactions orchestrated within CRM and intelligent task routing.
Messaging – Available across almost 200 countries.

Twilio’s key value propositions are customization and flexible pricing.

Each year Twilio runs the Build Partner Program, which helps new partners grow their customer engagement business. Twilio Build consists of Technology Partners – companies that incorporate Twilio into their solutions – and Consulting Partners – companies that build customer solutions.

Through its developer-led business model, Twilio has positioned itself as perhaps one of the only communications companies capable of delivering a real digital transformation. Rather than relying on a sales team, as many companies with a subscription revenue model do, Twilio has been built on the bedrock of its developers.

And, by successfully acquiring other companies (Segment, for example, which it acquired for $3.2 billion in 2020), Twilio has become the go-to for cellular communication features.

Twilio SWOT Analysis

A SWOT analysis assesses the strengths, weaknesses, opportunities, and threats to a business. It is cost-effective and extremely useful for generating business insights.

Strengths

Developer-led business model: Twilio often deploys the tagline “by developers, for developers,” and this truly is one of the company’s greatest strengths. Because it doesn’t have to rely on a large sales team, Twilio can save money in this respect. And, because its focus is and always has been developers, it can deliver innovative products that consistently please users.
Highly skilled workforce: Twilio offers a competitive employee benefits package, including family leave, catered meals, vacation, healthcare, and retirement. In addition to this, it invests heavily in employee training, meaning all of its workers can perform their roles to the best of their abilities.
Strong financial position: Twilio is highly profitable with a strong free cash flow, allowing it to continue developing its products and services.
Software integration: Twilio easily integrates with popular Software as a Service (SaaS) platforms like Hubspot and Salesforce. Since Salesforce is widely used by companies worldwide – it has over 150,000 customers – Twilio’s compatibility is a real strength for the business.

Weaknesses

High price point: Compared to its primary competitors, Twilio’s price points are high. For example, sending a picture message costs roughly $0.02, which can quickly add up. Furthermore, its subscription prices are also comparatively high. This means that startups and small to medium businesses are unlikely to be able to afford Twilio.
Complicated user interface: Twilio’s UI takes some getting used to, and it can be challenging for beginners because it requires basic programming knowledge to properly utilize all of its functions.
Vertical integration: Twilio’s ten biggest customers, of which Uber is one, still account for 20% of its total revenues. This puts the company in a precarious financial position because so much of its revenue comes from businesses that are large enough to develop their own communication platforms, rendering Twilio’s services defunct.

Opportunities

Remote working: The global pandemic has caused an increase in the number of companies that offer remote or blended working. There is also significant pressure from employees who wish to work from home. Therefore, companies increasingly require a way to facilitate communication between employees who are in different geographical locations. This is a key opportunity for Twilio.
Significant market opportunities: It has been estimated that the market opportunities for Twilio could be worth $53 billion. This consists of large existing markets that could be disrupted and new markets without the kinds of solutions Twilio offers.
New technologies: Digital technology is evolving rapidly, and this is a huge opportunity for Twilio to continue developing its product, offering new features that personalize two-way communication between businesses and customers.

Threats

Inorganic growth: While the growth picture for Twilio looks extremely positive, in many ways, it is also deceptive. This is because strategic acquisitions fuel the increase in active accounts. It is an asset-light company, but it is also acquisition-heavy, making it unusually capital intensive.
Industry competition: The cloud communications sector is growing rapidly, and with this growth comes increased competition from rival companies. This is likely to catalyze rapid technology developments and innovations and more competitive pricing, which Twilio will need to keep up with to maintain its market share.
Security: The very nature of cloud communications means that data security is a real concern. Data protection laws are constantly being updated across the world, so Twilio must keep an eye on the rapidly evolving security landscape to ensure its services remain viable.

Twilio Competitor Analysis – Top Competitors

The advent of the Cloud has been transformative for the digital world, opening up new possibilities for businesses to create meaningful connections with customers.

Twilio has successfully delivered a secure cloud communication platform, but it is not the only company to have done so. Competition is fierce, and businesses must keep track of the rapidly evolving competitive landscape to keep an edge over other companies.

Below is an analysis of five of Twilio’s top competitors.

Vonage Communications APIs

Vonage Holdings Corp, known informally as Vonage, is an American publicly held business cloud communications provider. The company was founded in 2001 and is headquartered in Holmdel Township, New Jersey.

While Vonage began life as a consumer-focused service provider, it has expanded its presence since 2013 through a series of acquisitions which have allowed it to move into the business-to-business marketplace. Its three key acquisitions have been:

NewVoiceMedia ($350 million, 2018).
Nexmo ($230 million, 2016).
Vocalocity ($130 million, 2013).

Today, the company provides unified communications, programmable communications APIs, and contact centers built on a flexible cloud communications platform.

In 2020, Vonage generated a revenue of $915 million, representing 14% growth. Furthermore, in both 2020 and 2021, the company won Partner of the Year Award from Salesforce.

Vonage’s mission is to “make communications more flexible, intelligent, and personal to help enterprises stay ahead.” You can read about the core values of other companies here: the most powerful and enduring mission statements.

Plivo

Plivo is a relatively new company offering an SMS API and Voice API platform. It was founded in 2011, is headquartered in San Francisco, California, and has three office locations across two countries.

In September 2012, Plivo raised a seed round of roughly $1.75 million from SV Angel, Andreessen Horowitz, Battery Ventures, and Qualcomm Ventures. It has also raised 10,000 dollars from startup accelerator The Morpheus and a $250,000 fund after completion from Morpheus’ investor partners.

The company has been profitable since 2015. In 2020, it hit $40 million in revenue with a customer base of only 70,000. This was a 17.65% increase year on year.

Plivo launched its API platform for voice and SMS applications in 2012, and since then, it has also launched a new SDK that allows developers to integrate WebRTC into existing calling solutions.

In 2018, Plivo announced the launch of PHLO. This is a drag-and-drop workflow builder which allows people to create communication functionalities very quickly. The company’s most notable customer is IBM.

On its website, Plivo defines its mission: “to simplify business communications.” It serves over 190 countries.

Podium

Podium is a privately held cloud-based technology company that develops software to help businesses modernize customer interactions. It was founded in 2014 and is headquartered in Lehi, Utah.

Unlike Twilio, whose pricing is too high for smaller companies, Podium’s primary customer base consists of over 100,000 local businesses, and it aims its marketing efforts at this particular niche. In doing so, the company has seen much success; in 2018, it made it onto Forbes’ The Cloud 100 list and was named the Next Billion-Dollar Startup.

Podium’s estimated annual revenue is currently $161.4 million per year.

In 2020, the company raised $125 million in Series C funding, which will allow it to provide operational stability to local businesses. Moreover, Podium also created Podium Starter in response to the pandemic, offering a free version of its product to any local business in the US.

Sinch

Sinch, formerly CLX Communications, is a cloud communications company that connects businesses and customers through a selection of personal engagement tools. It is headquartered in Stockholm, Sweden, and has offices in over 30 cities worldwide. It was founded in 2008.

The company offers several different cloud-based solutions, including CPaaS and APIs for SMS, WhatsApp for Business, OTPs, MFAs, and identity verification via voice, message, and video.

Some of the most notable companies to use Sinch’s services are Nespresso, Toyota, Allianz, Clarins, and Nissan. According to its website, Sinch can reach every mobile phone on the planet in seconds.

In 2020, Sinch hit $22.6 million in revenue. Recently, the company’s strategy has been to raise funds for acquisitions. After raising $690 million from SoftBank, Sinch announced in February 2021 that it is acquiring Inteliquent, a voice communications provider in the US. This move will allow Sinch to consolidate its foothold in the US and compete with Twilio more effectively.

Bandwidth

Bandwidth Inc. was founded in 1999 and is headquartered in Raleigh, North Carolina. It provides cloud-based communication services, including data internet, messaging, voice/voice over internet protocol, and managed network and conferencing services.

Bandwidth predominantly serves small to medium businesses. However, it also counts Microsoft, Zoom, and Google among its customers.

Its website claims to be the only API platform provider that owns a Tier 1 network, giving customers better quality, rates, and control. Bandwidth’s total revenue in 2020 was $343.1 million, up 48% from the year before.

In July 2021, Bandwidth launched Duet for RingCentral, a bring your own carrier (BYOC) solution to help large enterprises modernize cloud communications. This illustrates the company’s commitment to constant innovation.

Bandwidth also announced in October 2020 that it would be acquiring the international cloud communications leader Voxbone, a move set to accelerate Bandwidth’s opportunity to serve the $17.7 billion CPaaS market. Voxbone’s revenue in 2020 was more than $85 million.

How Twilio Stands Out

Twilio is dedicated to fostering a positive, inclusive company culture that strives for innovation and excellence. Employees rate the company extremely highly, and although it was founded as recently as 2008, it has already generated an impressive amount of revenue.

Ultimately, Twilio is the market leader. It pioneered the communications platform as a service (CPaaS) business model, and over the years, it has cultivated this initial success, attracting over 9 million developers to its platform.

Frequently Asked Questions

Question: Which company is the CPaaS market leader?

Answer: Twilio is the largest CPaaS company in the world, with a revenue of $1.76 billion. Most Twilio’s competitors have not yet hit the billion revenue mark, though Vonage is close with $915 million.

Question: What is Twilio’s competitive advantage?

Answer: A central part of Twilio’s growth strategy has been creating and nurturing a strong partner ecosystem. Firms that work in the consulting sector like Deloitte Digital help clients build solutions powered by Twilio. This is one of the company’s most important advantages.

Twilio’s second competitive advantage is its large developer base. Because Twilio has more developers working on its platform, it can grow much quicker than many cloud communications companies.

Question: Who is Twilio’s biggest competitor?

Answer: Twilio’s biggest competitor is Vonage. In 2020, Vonage made $915 in revenue. While both companies offer similar services and products, Twilio’s is more robust and offers developers several exciting features that facilitate overall ease of use.

Question: Why choose Twilio?

Answer: Twilio is by far the most successful CPaaS company, and there are many reasons why so many people choose it over its competitors:
Built by developers, for developers.
Easy integration.
The global user interface is easy to manage.
Extensive documentation.
Flexible to help a range of different companies build bespoke communication strategies.

Conclusion

Instant communication via message, phone calls, and video has become an important part of everyday life for most people worldwide. Consequently, businesses across almost all industries have had to find new solutions to connect with their customers. This is where cloud-based companies like Twilio come in.

In the future, this industry will continue to grow at a rapid rate. It will be increasingly difficult to stay on top and stand out from the competition, but Twilio’s developer-based platform stands a good chance at maintaining or even growing its current market share.

Research

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Maddy Chiffey

Maddy Chiffey loves one thing: results. She knows how thrilling it is to come up with a business idea and watch it take off. So, she now dedicates her time to working as a content creator to help other people learn how to become successful. All of the content she creates on Business Chronicler is aimed at helping you learn, grow, and thrive as a business owner.