[sologoub]

Familiar situation, but in the longer run, the minute pricing from resellers is less important. What Plivo is doing here is very smart - they are leaving the lower margin pricing games to carriers and focusing on the true value-add, which is the business logic stack.

Twilio is following these moves too with their SIP-out product. I'm sure it's only a matter of time before the support receiving SIP calls and registering endpoints.

For smaller customers that do not have the buying power necessary to secure proper redundancy, both Plivo and Twilio offer minutes. Plivo's emphasis on more advanced telephony management is definitely a good differentiation from Twilio, who is focusing more on customers that don't know much about telco.

Remember, if you are routing 10s of millions of minutes, you likely have at least a few people focused on supporting it and revenues to underwrite carrier relationships.

[brandnewlow]

Can you explain out what you mean in your first paragraph a bit more? I'm not sure I follow 100%.

[sologoub]

DISCLAIMER: I am not in any way affiliated with Plivo, Twilio or any other provider.

Twilio, Plivo, Tropo/Voxeo, etc. are reselling minutes at a given rate that are aggregated from a basket of carriers. You get a "blended" rate based on their ability to optimize the routes (least cost routing or LCR), carrier quality/redundancy needs, and margin the reseller is trying to make.

For smaller companies, individuals, these blended rates is absolutely the way to go - less complexity, less variability in expenses based on traffic, fewer things to screw up.

For a larger company that already has the carrier relationships and staff to manage them, these reseller models become prohibitively expensive.

If you come to an IT Director managing telco for a large company and tell him/her that it will be $0.02 per minute in 60 second increments (Twilio's list rate) to make outbound calls, you will get laughed out of the room.

Of course, Twilio, Plivo and others offer volume rates, but they still need to make margin. If you are big enough to have direct relationships and/or buying multiple services from carriers (such as minutes and bandwidth), you get better rates.

Plivo is therefore very smart in going for infrastructure play. Twilio is also doing this with their SIP offering, but at a somewhat different angle.

Let me know if you'd like to talk offline.

[brandnewlow]

OK. So the argument, if I might restate it to make sure I follow, is that Plivo knows the big companies have the relationships and clout to not need the price abstraction benefits they provide. So Plivo is letting them plug their own carrier relationships into its software so that they at least control the telco "business logic" for those companies, even if they're not able to get their aggregate, steeper price for the minutes themselves.

OK. I think I understand that. Thanks!

[sologoub]

Plivo handles all call control, so traffic passes through Plivo.