News Stay informed about the latest enterprise technology news and product updates.

Twilio's Segment acquisition recasts UCaaS vendor as CX

Twilio, a contact-center-friendly UCaaS vendor, has completed the purchase of the Segment CDP for $3.2 billion in stock. Together, experts said, they could challenge Microsoft, Salesforce and Oracle.

Updated on Nov. 2, 2020

Twilio has completed the acquisition of customer data platform vendor Segment for $3.2 billion in stock, in a move that allows the unified communications-as-a-service vendor to compete in the customer engagement technology market.

The deal will unify customer data profiles for Twilio users by connecting data the company collects through channels such as video, email and messaging, to Segment's CDP. The combined Twilio-Segment entity will enable users to make customer engagement "more personalized, timely and impactful," Twilio CEO Jeff Lawson said in a blog post.

"Twilio has a significant presence in cloud communications. Segment helps organizations manage customer data," said Brad Cleveland, co-founder and past president of the International Customer Management Institute (ICMI) contact center association. "To deliver a great customer experience, you need both. I see this as indicative of a larger trend -- bringing all components required to deliver and manage great customer experiences into tool sets that work together."

A customer service CDP

In recent years, CDPs have emerged as tools for marketing teams to gather customer intelligence to create more effective and personalized campaigns. Twilio's Segment acquisition moves the CDP away from the marketing application stack and into the customer service cloud.

The acquisition will allow Twilio to grow deeper roots in its users' technology mix, CDP Institute founder David Raab said. He predicts Twilio will extend its reach into marketing technology by acquiring advertising tools for websites, e-commerce apps and social media channels, which will deliver personalized ads targeted from data Twilio collects on the service side.

"Being a unified communications company isn't a viable long-term position, because unified communications are just apps that sit on a platform and can thus be easily replaced," Raab said. "Owning the platform is the only way to stay really embedded with the client."

Twilio CEO Jeff Lawson keynoting his company's Signal user conference.
Twilio CEO Jeff Lawson writing code live in his user conference keynote earlier this month.

Twilio challenges Microsoft, Oracle, Salesforce

Microsoft, Oracle, Adobe and Salesforce have all recently released CDPs. SAP has one on the cusp of release. A Twilio-Segment customer engagement platform would feature a more sophisticated CDP than the newer CDPs from those big tech players because Segment has been around for much longer, Constellation Research analyst Nicole France said. Thus, a Twilio-Segment combo should not be underestimated; it could be a significant competitor to those tech giants.

Being a unified communications company isn't a viable long-term position, because unified communications are just apps that sit on a platform and can thus be easily replaced. Owning the platform is the only way to stay really embedded with the client.
David RaabFounder, CDP Institute

Another intriguing factor of a Twilio-Segment customer engagement platform is the history of the two companies. Both Twilio CEO Lawson and Segment CEO Peter Reinhardt began as developers themselves, which makes their approach to solving the problem of unifying customer data more "practical" than large vendors such as Microsoft, she said.

While the big software companies prioritize challenges of integrating their existing applications and ingesting third-party data sources with their CDPs, a smaller, developer-centric company can take on bigger-picture issues.

"They're trying to solve the problem of 'What does good customer engagement look like, what defines good customer experiences?'" France said. "The combination of two technologist CEOs [may] help bridge that gap. They both come to this without the baggage that comes with big, established software companies, and they have the opportunity to solve these problems differently."

Dig Deeper on Customer data management

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.