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Developer Stats-Can You Buy The Numbers?

According to the S-1 filing by Twilio, they have over 900,000 developers who have registered to use their APIs. Nexmo, according to a Vonage company spokesperson in the IR Department has registered over 114,000 devs and 350 "enterprise" accounts compared to Twilio's 28,000 Active Customer Accounts that are not broken out by category. And if you read the S-1, it's those enterprise accounts that Twilio plans to go after.

But, as the Vonage spokesperson pointed out "these developers may be students who are learning how to code."  That means a large portion of the developers in the aggregate million or so of both companies, not allowing for duplication, between the two services are LPBs (low to no paying buyers). That's something Twilio sort of explains in saying they don't factor in accounts that pay less than $5.00 a month in services fees. In the car industry, those types of customers are known as tire kickers. They factor into the number of people who walk into the dealership or onto the lot but never buy a car. Tire kickers are not buyers, and Car buyers are what is a real customer, so in developer parlance, a customer would be someone who actually deploys and pays for something.

So, 350 companies out of 114,000 developers is .003 percent conversion rate if we chose to treat the enterprise as ONE developer vs. them having say 25 each. For this exercise I won't go to 350 equals one argument, though I could. So, even with 25 devs in each enterprise company then the conversion rate for Nexmo is .077 percent. If those same 350 companies employ 100 devs each then the percentage increases to .30 percent. My guess is the number is somewhere between the .077 and the .30.

Now let's apply the same "math" to Twilio.

900,000 devs and 28,000 paying accounts. That's a conversion rate of .031, so the two companies appear to be far from equal in conversion percentage, but it would appear that Nexmo is clearly making more money per developer, converting more to paying and revenue generating, and carrying a lesser percentage of non or low paying students.

Twilio is projected at a $240,000,000 income level for 2016 if they continue to generate the same amount each quarter. With 900,000 devs that translates to just under $277.00 a developer on average for the year, but with really only 28,000 paying accounts the number grows to $8,571 per paying developer so clearly there's a big difference between the $5.00 a month/$60.00 a year paying dev and the $714 a month outlier. I would say that to be on par with Nexmo, Twilio needs a lot more of the outliers and less of the "students."

Nexmo reported $71 million in revenue with only 114,000 devs or $622 per developer so if I use the model of like to like of total devs for each, Nexmo trumped Twilio by more than 2.5x per registered dev on average. And that's the problem with large numbers and why Twilio had to couch their claims with "only 28,000" being counted.

So, smaller developer base. Higher revenue per developer. An existing base of enterprise customers (that they have to of course keep), the win goes to Nexmo....now all Vonage has to do is keep the customers from going to Twilio, Plivo or any of the API platforms that are on line and also growing.


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