There is a gold rush of sorts in customer engagement and one company, Twilio ((TWLO) -Get Report), is building the best storefront for the tools application developers need.
On Monday, Twilio execs announced a $3.2 billion merger with Segment, a key competitor in the application programming interface marketplace. The all stock deal will create an API juggernaut.
In this case, bigger is way better — and Twilio is a buy.
At its heart, the San Francisco, Calif.-based company is a cloud communications platform. Its software engineers have developed APIs, modular sets of code, that developers can easily plug into their online applications to make and receive telephone calls, text messages, video and chat.
If you have ever requested an Uber ((UBER) -Get Report) car or sent a Facebook ((FB) -Get Report) message to a friend on their birthday you’re probably engaged a Twilio API.
The beauty of the business model is that Twilio gets paid a small fee every time one of its APIs is employed. Keep in mind, the Twilio API platform was used 1 trillion times during 2019, and growth is only getting started. My own newsletter business uses Twilio gateways several times a day to send notices of new reports to customers by text message.
Adding Segment is a master stroke. Since 2010, Twilio’s cross town rival has been helping companies collect and manage their internal customer data using APIs.
Segment APIs work by allowing developers to pull customer data from one application as a building block, then seamlessly fit that information in another. Most companies use these APIs to integrate their customer service, marketing and analytics software.
The deal follows the 2019 purchase of Sendgrid, a large email API developer. Although email marketing may seem dated in the era