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Twilio & Electric Imp: Testing Business Models in the Wild



On July 9, 2020, Twilio announced that it had recently acquired Electric Imp (which had raised over $40 million in funding prior to the acquisition), expanding its reach into the growing Internet of Things (IoT) space. The combination of Twilio’s services and developer base and Electric Imp's platform will make new IoT products and services available to the market. As Twilio CEO and co-founder Jeff Lawson put it in TechCrunch:


overall, the IoT industry doesn’t seem to attract innovation at the same rate as software. One possible reason is that experimentation — real experimentation — that is, testing real business models in the wild — remains difficult. By democratizing access to cellular IoT connectivity, we’ve been able to help move things along, but many of the hardest infrastructure problems remain unsolved. With the Electric Imp acquisition, we gain the team and technology needed to make a bigger dent in the problems facing future IoT developers.


Twilio: Reliable Global Connectivity


Twilio is a cloud communications platform used by businesses to manage external customer service communications by integrating voice/VoIP, messaging, video, SMS, and email. The platform enables developers to build channel features into their applications with standard web language via a web application programming interface (API). Those communication-as-a-service APIs underpin numerous online services (eg, calls with an Uber driver are masked for privacy through Twilio functionality and unlocking a Lime bike with a smartphone is done through Twilio’s programmable wireless SIM card).


In effect, Twilio is building a communications network on top of the AWS infrastructure layer, creating additional building blocks for tomorrow’s economy, and in the process helping forge a new kind of communications infrastructure. Its actual customers are the developers who use it inside large companies, and in the process, take advantage of a self-serve business model that allows developers to prototype cheaply and build out larger applications. The platform is designed to spur the creative juices of developers who can then tailor all kinds of use cases. In 2018, Twilio launched Flex, its call center API (a direct competitor to AWS Connect). Flex is part of the top layer of APIs, known as Twilio’s Engagement Cloud.


Twilio also manages a global telecommunications network (ie, a “Super Network” that is the layer of software that integrates directly into telecom operators). Companies can access the network to connect their devices to the Internet. As noted by Heller House:


Twilio has built its Super Network for high availability. Downtime at the level of local carriers gets automatically re-routed, making Twilio’s network more reliable than its underlying carriers. As customers grow their use of Twilio’s APIs, Twilio gets better data; this data allows Twilio to further improve the Super Network, resulting in a flywheel effect of increasing returns to scale and an improved competitive advantage over time.


Twilio revenues increased 62% last year to $1.13 billion, with high gross margins.


Electric Imp: Adding the Mature Application Platform


Electric Imp adds a secure IoT connectivity platform to the mix, connecting Cloud services with the “real world,” while helping optimize that world by offering a suite of products that aid enterprises in managing large fleets of connected devices. It aims to make it simple to connect any device to the Cloud through managed, secure, scalable connectivity-as-a-service. The platform fits many greenfield and brownfield applications (eg, asset monitoring and management, logistics and tracking, operational efficiency, predictive maintenance, auto-replenishment, security-critical applications, etc.).


In essence, as TechCrunch points out, this “makes it easier for businesses to securely connect their IoT devices with their data centers and third-party services.”


To date, small to large companies have built over a million devices on the Electric Imp platform, focusing on their own internal business applications while Electric Imp provides the essential infrastructure that links it all together. Electric Imp points out that all components and services of a solution are designed, integrated, and managed together, and that this is a competitive differentiator.


The managed imp service hosts a virtual machine (VM) for every connected device, giving companies the flexibility to integrate its IoT data flows with any data storage or analytics service – or even directly connect it to enterprise systems. Ready-to-use integrations are available for Salesforce, Wolfram, AWS Kinesis, Keen.io, New Relic, Pubnub, and more.


The portfolio spans hardware, software, and Cloud services. The platform is available in both public and private cloud categories.


Electric Imp Solution


Partner Murata produces the compact WiFi chip modules for Electric Imp. Modules are placed inside a device, component, or product in order to provide local compute capability and connections to application-specific sensors and actuators. In turn, what Electric Imp calls the impOS is a homegrown, secure, managed operating system that hosts the customer app within the wireless chip and facilitates industry-standard TLS connections to the imp Cloud service.


Customers manage their connected hardware via the impCloud platform (a fully programmable middleware container), which provides the ability to send commands to devices and perform maintenance tasks such as releasing security patches (because both the device and Cloud are managed services, Electric Imp provides security-as-a-service: it monitors, patches, and updates all aspects of the system to ensure the continued security of customers’ devices and data). In this way it provides secure Cloud connectivity services to products, enabling users to concentrate on “creating code that brings their products’ functions to life.” Companies embed the chips into systems to turn them into connected devices.


In 2020, the company is unveiling its next generation imp (the imp006). Unlike previous imps, there is no “imp module.” The imp is simply a secure microcontroller (MCU) placed directly on the product’s printed circuit board (PCB), connected to any combination of pre-approved cellular or WiFi radios, with the aim of reducing cost and increasing design freedom.


Jeff Lawson & Hugo Fiennes


Twilio CEO Jeff Lawson was an early product manager at AWS. A software engineer and entrepreneur, he cofounded Twilio in 2008, building it on top of AWS infrastructure with the goal of helping address the cumbersome, expensive, and lengthy process of setting up call centers while simplifying telephony. Like AWS, it would be a usage-based model designed to work with a customizable, resilient, scalable Cloud platform. Its whole business is based on enabling true customer engagement.


Electric Imp was co-founded by Hugo Fiennes, the engineering manager for the Apple hardware team that launched the first iPhone. Fiennes notes that:


Our simple pricing model that includes both security maintenance and our unique cloud middleware ensures that our customers’ IoT journeys are both successful and predictable, no matter whether the data is flowing to a custom enterprise backend or a major Cloud provider. As with other Twilio products, an individual developer can prove out their application in our production-grade environment and be assured that scaling ‘just works.’


Fiennes added that, “This partnership brings together two critical aspects of IoT: reliable global connectivity and a mature application platform, enabling our customers to build solutions in less time than ever before — and deploy them worldwide.”


Other entities looking to innovate the enterprise IoT market that provides Cloud services for managing connected devices include Google, Amazon Web Services Inc., Microsoft, and startups such as Particle Industries (backed by $40 million from Qualcomm). According to a 2019 report published by Market Insights, the total global Cloud communication platform market could grow 27% annually and reach $9.87 billion by 2025.



Image: from the jellyvision.com website

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