The recent global health crisis has compelled organizations to reassess their customer interaction strategies. Regardless of whether changes involve service delivery or communication methods, a common outcome is the accelerated adoption of digital solutions.

This shift significantly influenced Twilio’s decision to acquire Segment for $3.2 billion. (Details of the agreement were previously reported by Forbes last Friday and covered by us over the weekend.) The two companies demonstrate strong synergy, broadening Twilio’s platform by granting its users access to crucial customer information. According to Chee Chew, Twilio’s chief product officer, the acquisition doesn’t represent a fundamental shift in the company’s focus, but rather an evolution.

“While some may categorize us as a communications provider, we define ourselves as a customer engagement company. Our primary goal is to empower businesses to connect with their customers more effectively,” Chew explained to TechCrunch.

Laurie McCabe, co-founder and partner at SMB Group, connects this move to the pandemic and the increasing necessity for businesses to deliver comprehensive digital customer service. “A growing number of customers recognize that exceptional customer experience is vital for both surviving the pandemic and prospering during the economic recovery—and they are prepared to invest accordingly, even amidst uncertainty,” McCabe stated.

Chew acknowledged that Segment addresses a key gap in Twilio’s offerings, providing developers with direct access to customer data and opening doors to innovative applications.

“Segment’s data capabilities provide a complete understanding of the customer, integrating seamlessly with our existing services. I envision this as a broad enhancement across all channels, extending our reach and enabling our customers to develop intelligent services,” he said.

Brent Leary, founder and principal analyst at CRM Essentials, believes Segment will significantly enhance the developer experience by providing powerful data-driven tools. “This acquisition positions Twilio to influence the transformation process centered around data, insight, interaction, and experience by simplifying the platform for developers,” Leary clarified. Essentially, it equips developers with the ability Chew mentioned—to leverage data in building a wider range of applications utilizing Twilio APIs.

Paul Greenberg, author of CRM at the Speed of Light and founder and principal analyst at 56 Group, concurs, stating, “Segment allows Twilio to utilize customer data within its already robust unified communications platform and hub. The fact that both are API-driven creates substantial flexibility for developers,” he added.

However, Holger Mueller, an analyst at Constellation Research, suggests that Twilio is responding to the increasing commoditization of core communication services like SMS. He believes this deal, alongside the SendGrid acquisition in 2018, allows Twilio to expand into the more profitable data sector.

“Twilio requires new avenues for growth, and its strategy appears to be moving up the technology stack, particularly with the acquisition of Segment. Managing data movement and ensuring data residency compliance are significant challenges for enterprises developing next-generation applications,” Mueller explained.

As Chew pointed out, Twilio initially focused on simplifying the integration of SMS messaging into applications, addressing a critical developer need at the time. Now, the company aims to deliver a more unified customer communications experience, and Segment is expected to play a major role in achieving this goal.