Twilio: Priced for Enterprise Scale
Newly released enterprise plan provides enterprise developers with one-click security, administration and access management features, plus introduces new pricing model.
[Editor's note: This article has been edited from its original to clarify a few points made around pricing and analyst commentary.]
Cloud communications platform company Twilio today unveiled the aptly named "Twilio Enterprise Plan," which takes into account the common demands around security, administration, and access management that enterprise developers need to grapple with as they build cloud communications solutions.
"The impetus here is that we're seeing software teams within enterprises now use cloud communications just like startups and software companies have been doing for quite some time," Manav Khurana, VP of product marketing at Twilio, told me in a briefing. "We're talking [about] ING innovating just like Uber does."
But as much as enterprise developers and software teams want to be as agile as their startup peers, they are often slowed down by the strict security, compliance, and procurement requirements commonplace in large businesses, Khurana added.
To address these enterprise needs, Twilio Enterprise Plan includes advanced features like single sign-on, customizable role-based access control, auditing, public key client validation, and segmented billing and usage. With the new plan, Twilio is hoping to facilitate one-click, frictionless adoption of cloud communications within large enterprises.
Scaling Up and Onward
Twilio is certainly not a stranger to the enterprise. The company boasts a growing customer list of big name companies that includes the likes of Coca-Cola, Twitter, Netflix, ING, and Nordstrom, to name a few.
But over the years, there have been some rumblings about Twilio not being able to scale while maintaining performance. Mark Winther, group VP for telecom at IDC, chalked that up to competitor FUD.
But the technology isn't the only area where scale can become an issue. The other area where scale becomes an issue is cost, Winther said.
If you're a big company using Twilio SMS, you're paying a lot of money, Winther said, and, while there are volume discounts, costs increase with usage. Because of the way Twilio models its pricing, it's logical that customers would reach a point of scale at which they'd start to consider building their own platform as a cheaper option -- a familiar TCO issue in enterprise technology markets. Of course, the do-it-yourself option requires new costs for technical staff, physical security, electricity, and balance sheet entries to carry the assets. And those are fixed costs, meaning there is little ability to scale down if usage declines. Still, there is a trade-off point. For some customers that reach that tipping point, Twilio will have to find a way to make cost a nonissue, he added.
That way may be a change in pricing model, switching from a metered usage model to a value-added services model, for example. Perhaps, the future for Twilio is a shift "away from metered messaging to intelligence," Winther said. That's not to underestimate or undervalue Twilio's metered model, Winther added, because that's really a huge advantage, but if you look at all the sales services and SaaS offerings out there, most have simple flat rates per use per month.
The pricing for the Twilio Enterprise Plan is either $15,000 per month, or 30% of the customer's metered spend with Twilio -- whichever is greater, Khurana told me; this is on top of the metered usage spend. With the additional spend comes the value-added security and access management features.
"We've obviously been working with a lot of enterprise customers and trying to see what makes sense and what would be amenable to them and the effort that goes into building these capabilities, so that's really how we arrived at this [payment structure]," Khurana noted.
Twilio has been helping enterprise customers establish a predictable pricing model -- "something that they can budget against, something that they can support," he said. This "commit pricing model" allows an enterprise to commit to a certain volume for a discounted price. The goal is complete transparency, he added.
"You see what you're going to pay, and that's what you're going to pay; whether you're sending one message or a billion messages, the pricing automatically adjusts."
In discussing how Twilio Enterprise Plan meets the demands for scale, Khurana emphasized that it's important to consider what it means for enterprise software teams to scale their cloud communications applications. Often times, he said, that scale means adding new geographies. Take, for example, ING, which operates in 17 countries. Making the Twilio-based application available in all these different geographies "means getting access to local phone numbers, local quality, and operating the communications in a way that is compliant with local regulatory standards, local restrictions, and even local cultural best practices," Khurana explained.
"The second part of scale is, the larger the surface area of an application -- in terms of how many people use it, the ways they use the communications, how many countries they use it in -- the larger the surface area of the types of problems that will occur," he said. "Operating at scale means that a large business and software team needs to be able to quickly detect and address issues that come up."
This is where auditing comes into play, which as I mentioned previously, is part of the Twilio Enterprise Plan. Auditing lets software teams see that everything is operating in the way that it should be and that the correct people are alerted of incidents with the appropriate level of detail to respond quickly.
Role-based access control, including directory synchronization, addresses the third issue around scalability, which is that the wider the surface area of an application, the more people within a software team participate in the building, scaling, and operating of the application, Khurana said.
"It's not just the software developer writing code. She's also working with developer operations teams that are making sure the application is working properly. She's also working with counterparts that are in different geographies that are localizing the application. So it's really important to have role-based access control so that no one individual is making changes to the global application that are outside of her immediate area of purview."