Lessons in CPaaS Leadership: Managing Costs at Scale

Let’s face it — among communications platforms as a server (CPaaS), Twilio is the 800-pound gorilla in terms of market share. It’s the modern embodiment of the old saying “Nobody ever got fired for buying IBM.” But one thing you can’t say about Twilio is that it’s budget-friendly.

Fortunately, just as there were worthwhile alternatives to Big Blue back in the day, there are good alternatives to Twilio today. Plivo of course is one of them, and a key advantage is that it lets businesses of all sizes better manage their costs at scale. In this latest post in our Lessons in CPaaS Leadership series, we focus on all the ways a platform can save — or cost — a business money.

What costs do businesses that use cloud communications platforms have to consider? They start with unit costs to send messages and make calls, but they also include things like support contracts and sometimes phone number rental.

On a unit cost basis, it’s easy to see Plivo’s advantages. Check out our prices; check out Twilio’s. Individual line items vary, but Plivo is lower in every case — on average around 35% lower. We wrote a blog post that dives into the details.

In both cases, the individual rate differences are tiny: It costs half a cent to send an SMS text message through Plivo, .75 cents through Twilio, for instance. But you wouldn’t need a CPaaS platform if you were sending just a few messages a day. When you scale up to business volumes, those tiny differences add up to tens of thousands of dollars per month. That’s a significant amount you can save with Plivo every month.

Quality affects cost

But there’s more to the cost equation than unit costs. Consider quality of service. If your CPaaS can’t reliably deliver text messages across every locale where you have customers, you have to add in the cost of resends. Similarly, with voice calls, poor connections can require people to hang up and try again. You pay for every voice call made and received, so if you need multiple attempts to get a clear line as a result of poor quality, the costs increase quickly. Lower quality also leads to higher customer support costs.

Plivo emphasizes connection quality because our customers demand reliable, high-quality routes. Over the past decade we’ve built a premium communications network that none of our competitors can match, thanks to direct partnerships with Tier 1 carrier networks all across the globe. We rely on high-quality local carriers, and don’t try to cut costs by using cheaper aggregators that exploit lower-quality routes. Low latency and high reliability mean your messages and voice calls need fewer retries than with other CPaaS alternatives.

Our direct partnerships and strong carrier relationships also let us lower costs, because the volume of traffic we send across our partners networks enables them to charge lower rates, and the savings we receive are reflected in the rates we offer.

It works for Deckers

Plivo customer Deckers Brands has seen how well Plivo can save an organization money. In an effort to lower support costs, the footwear giant built an application that texted customers to let them know where their orders were every step of the way. Adopting Plivo was nearly seamless — with a simple API and great documentation,​ implementing Plivo only took a week, says Jacob Martinez, project manager for Deckers’ ecommerce team.

With better communication, the company succeeded in reducing its support costs. The average cost per contact, Martinez says, is less than half of one percent of the cost of telephone contact, and track-package calls have decreased between 15 and 20% year-over-year since the launch of SMS delivery status notification. Using SMS to preempt those calls has paid for itself many times over.

What’s better than low cost? No cost!

What better way to manage costs at scale than to have no cost? In countries where receiving SMS messages is supported, Plivo lets businesses get incoming text messages for free. Unit costs of zero scale very well.

We also offer free trial accounts, and even give prospective customers usage credits so they can try building applications for any use case.

What’s the bottom line?

If two solutions can meet their needs, people generally decide between them on the basis of cost. Plivo is a cost-effective solution for small, midsize, and enterprise businesses because it helps them manage costs as their usage scales up. After a one-time migration project (and we make migration easy) you can be banking savings every month on your voice and SMS communications.

For more information on Plivo’s advantages, read our other Lessons in CPaaS Leadership blog posts: Find out why reliability, a strong carrier network, consultative customer support, and feature parity with Twilio make Plivo stand out among cloud communications platforms.