I've been a fan of Tom Krazit since his days at the original GigaOm, and my pal Om Malik introduced me to him. Tom has been "in the cloud" as a journalist from it's earliest days, and his work at Protocol Cloud has continued to be some of the most insightful and spot-on writing in journalism today. His no B.S., non-shill style of reporting is in the Om style, so when he wrote today that "Microsoft wants to be the phone company," it hit the same cord that I heard when I read Microsoft's own unveil.
Couple this with the thoughts of another long-time VoIP/SIP/Telecom friend of over 16 years, Counterpath founder Erik Lagerway, now CEO of Vancouver startup SnapSonic, own thoughts about Azure Communications Service, my wheels really started spinning as this may, on the surface, have the usual "Microsoft ring" to it, it's a move that in reality, only Amazon or Google can come close to countering.
My feeling is, and has been for a while, that the telecom world is in a significant state of change. With the dominance of the cloud and rise of the APIs, all coupled with the steady abandonment of the landline, and any real desire to be the phone company by the long time incumbents, AT&T, BT, Verizon, Telefonica, Orange, Telstra, and others the world over, has actually led to a Grand Canyon wide gap that is screaming be filled. Add to that the current desire of those same legacy carriers to be mobile-first, information service providers to all, and of course, the delivery medium of television content has in turn created a wide-open market for the rise of the new telco.
That's something Microsoft, Google, and Facebook are all pursuing in different ways. And with collaboration now a centerpiece of communications, and more modern services from ZOOM, with ZOOMphone, Dialpad with super-smart voice AI, and a whole host of others, are rapidly carving out their niches in telecom. In essence, they are picking up the ball of innovation, a place where the old school guys stopped venturing, back about the time Bell Labs died off.
While UCaaS was the hot zone for the last ten years or so, and it's why so much money and investment fueled that sector, its no longer as molten like. Microsoft, the perennial champion of being the second mover, has decided not to be another UCaaS player, but instead to become the CPaaS giant. As Krazit pointed out, this can't be good for Twilio, which had the lead. To me, this spells more significant challenges for Plivo, Vonage (Nexmo), and others who don't have specific niches carved out that can ride atop the Azure cloud+ Communications Services offering.
Why? Azure may be the most widely deployed cloud. If not, they are likely neck and neck with Google. Unlike AWS, they can provide richer and deeper integration into the rest of Microsoft's applications and platforms-all in a single architecture, not via APIs and webhooks. Second is TEAMS, Microsoft's collaboration platform that is out-innovating Zoom and Google Meet at every turn. Much like what Facebook does where the mimic and copy new cutting edge ideas and services to create a new feature, Microsoft copies the best of the rest and then blows it out.
For years I have been somewhat critical of Microsoft and how they bastardized Skype to a nothing burger in telecom, taking a very forward-thinking service and turning into nothing but a very pedestrian VoIP play. But that is a part of a past era, the Steve Ballmer one. With Azure Communications Services, Microsoft has taken dead-on aim at both Twilio and AWS, collapsing the what the two do into one API platform.
In turn, Microsoft is offering telecom and web developers a whole new playground to develop next-generation services and solution sets. That playground will further enable anyone who needs to make some type of call, voice, or video, send a message, SMS, MMS, or in-app text, and hook into services like those of CRM providers, tables, databases, or even content, in a more knitted together environment.
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