Twilio has confirmed it will retain its Segment business after an operational review.
The business houses its namesake customer data platform and Twilio Engage.
Previously, it also featured Flex, Twilio’s CCaaS platform. However, the company moved this across to its primary Communications business shortly before the departure of former CEO Jeff Lawson.
Following these moves, Khozema Shipchandler, CEO of Twilio, admitted that Segment “continues to underperform” – contributing to just seven percent of overall revenues.
Such headlines added fuel to the flames of speculation that Twilio may give in to activist pressure and put its Segment business up for sale.
However, Shipchandler has now released a statement to reaffirm Twilio’s belief that Segment will play a significant role in the vendor’s future.
“Myself, the Twilio management team, and the Board evaluated an extensive range of alternatives for Segment’s path forward,” he stated.
We unanimously came to the same conclusion: retaining Segment and taking aggressive action to accelerate the path to profitability is the best opportunity available to enhance value for our customers and shareholders.
“We also believe that Segment will further strengthen our Communications product offerings and allow us to capitalize on expanded opportunities presented by AI.”
One of the ways that Segment can add value to its Communications customers is via its CustomerAI product – which leverages large language models (LLMs) and natural language processing (NLP) to pull insights from customer conversations into Golden profiles.
Following the review, doubling down on such innovation is the path forward for Twilio, as the company hopes to encourage existing customers to expand their investments.
Historically, that has proven a problem for Twilio, as CPaaS continues to win new business while its broader portfolio struggles to entice existing customers into buying more.
To overcome this hurdle, Twilio has committed to delivering three products in 2024 that natively embed Segment into Communications.
Meanwhile, the CX stalwart has appointed a new “President of Segment” to oversee the transition.
The First “President of Segment”
As of last week, Thomas Wyatt is the first “President of Segment” – and he will play a defining role in helping Twilio evolve its offering from the Swiss Army Knife of CX to a cohesive platform.
Alongside overseeing the delivery of new solutions that bridge the gap between Twilio’s Communications and Segment businesses, Wyatt will aim to improve time to value for customers through AI and “right-size Segment’s cost base”.
However, expect such cost right-sizing to expand across the business as Twilio continues its push toward profitability.
Over the past 18 months, Twilio has announced three rounds of layoffs and ditched several elements of its business – including its IoT arm, Zipwhip, and the desktop app for Authy.
Wyatt’s track record for scaling businesses may aid him in making more cuts. Yet, Twilio also points to his “deep knowledge of data analytics and AI” as another defining factor for the appointment.
Indeed, Wyatt has previously served as Chief Product and Strategy Officer at People.ai, driving its product management, design, and business development strategies forward.
Before that, he worked as Chief Marketing and Strategy Officer at AppDynamics and held numerous leadership positions at Cisco – one of Twilio’s chief competitors in the CPaaS space.
Celebrating Wyatt’s arrival, Shipchandler said: “Thomas brings a passion for innovation that we value highly at Twilio, as well as a proven ability to grow and scale businesses.
With Thomas at the helm, we believe that Segment will be well-positioned to embrace a leaner, more focused approach to achieve its financial and operational goals, capitalize on the opportunities presented by AI, and continue delivering best-in-class services to our customers.
Those financial goals include achieving operating profitability by Q4 of 2025 – and, while that may seem quite a while away, it would represent quite the achievement for Twilio. After all, the business recorded $1.38BN in annual net losses at one point in 2023.
Finally, Twilio has authorized an additional $2BN share repurchase program that expires on December 31, 2024, to further support its financial objectives.
