How Twilio’s $3.2 billion Segment acquisition transforms the company

Twilio’s $3.2 billion purchase of Segment is a shot across the broader customer relationship and engagement software industry.

The acquisition, announced officially on Monday, gives Twilio a customer data platform (CDP) to combine with its broader communications platform as a service and customer engagement tools. As a result, Twilio can now be connected to every touch point customers have with their end users.

Twilio’s plan is to turn the customer engagement data into actionable insights with intelligence about touch points and communications.

What’s more interesting is that Twilio with Segment will be able to combine customer data and interactions for intelligence on everything from marketing, data warehousing, communications and analytics tools. Twilio will ultimately do battle with Salesforce and Adobe to be the connective tissue between customer data and the enterprise technology stack.

Here’s what Segment aims to do:


Twilio CEO Jeff Lawson said the company with Segment can “create more personalized, timely and impactful engagement across customer service, marketing, analytics, product and sales.”

Cowen & Co. analyst J. Derrick Wood said in a research note:

By giving Twilio control of this data & data ingestion layer, this should up-level Twilio’s ability to build a customer profile and provide it with a more robust Customer Engagement Platform–one that is more customer-data rich and one that can leverage this intelligence throughout Twilio’s multi-channel communications engagements. Acquiring Segment would also give Twilio: new routes-to-market with IT, Data Engineer, MarTech & Product Manager buyers;  a new data consumption-based revenue stream; and the components to build out a more comprehensive Marketing Automation or Customer 360 solution alongside synergies with SendGrid.

JMP Securities analyst Patrick Walravens said that Segment is one of the leaders in the customer data platform market, which is splintered, but includes companies like Exponea, CleverTap, Tealium and Amperity. Walravens said that like Twilio, “Segment also targets developers and has an API-driven platform.”

Indeed, Twilio on a conference call highlighted Segment’s 9% market share in the fragmented CDP market, according to IDC.

Here’s a look at Twilio’s stack and how Segment fits in:


Nevertheless, Twilio will see competition from a few giants such as Salesforce, Microsoft and Adobe. With a focus on communications channels, Twilio is hoping to have a new spin on the market. For instance, this slide from the acquisition presentation makes it clear that Twilio and Segment are going to bump into a few big guns in marketing, customer service and sales.  


Source Article