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Twilio buys SendGrid for email APIs

Twilio will acquire SendGrid, a maker of cloud-based email APIs. The deal follows email-focused acquisitions by Slack and Workplace by Facebook.

Twilio plans to buy SendGrid in a $2 billion deal that underscores the continued importance of email in business communications and collaboration.

SendGrid makes a set of cloud-based email APIs that businesses can use for sending transactional and marketing emails to customers, such as shipping notices and sales offers. Founded in 2009, the company claims its email APIs are used to contact half of the world's digital users every three months.

Twilio's communications platform as a service supports voice, video, SMS, chat and social media channels -- but not email. SendGrid's email APIs will fill that gap, as the two companies pledged to release "a single platform for all customer engagement" after the deal closes in the first half of 2019.

The acquisition comes as Twilio looks to expand its presence in the cloud contact center market. The company released a prebuilt contact center this week, Twilio Flex. It is a first-of-its-kind offering from Twilio, which had previously only provided the developer tools for building such a service.

"Incorporating email into the omnichannel customer contact center is definitely part of the story," said Dan Miller, lead analyst and founder of Opus Research, based in San Francisco, "but it looks like SendGrid is going to be operated as a subsidiary of Twilio, and integration will have to take place over time."

Twilio also appears poised to gain access to tens of thousands of new customers through SendGrid. Together, the companies said they would serve more than 100,000 businesses, compared to Twilio's current figure of more than 40,000.

UC vendors redouble commitments to email

Over the past couple years, largely following the lead of Slack, unified communications vendors have invested in team collaboration apps -- like Microsoft Teams and Cisco Webex Teams -- that were supposed to reduce the need for email, especially for internal communications.

But a string of recent acquisitions proves that email will remain a valuable business communication tool for the foreseeable future.

Last month, Slack bought startup Astro, maker of a chatbot that lets users check their email and calendars from Slack. Astro also makes an AI platform that helps people prioritize email inboxes and manage calendars.

And over the summer, Facebook bought startup Redkix with the intention of integrating the technology with its business communication and collaboration platform, Workplace by Facebook. Redkix makes a platform that combines email and teams-based chat apps into a single interface.

Vendors must come to terms with the reality that email is here to stay, at least until older generations exit the workforce, said Jon Arnold, principal of Toronto-based analysis firm J Arnold & Associates.

"Right now, [email is] still just too sticky," Arnold said. "So, I think [vendors] have realized they can't just ignore those pieces if they want to get where the money is."

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