Sinch’s recent spate of blockbuster acquisitions feeds into the prevailing trend for omnichannel solutions, according to CEO Oscar Werner.
So far this year, Sinch has acquired Inteliquent and MessageMedia for over $1bn, MessengerPeople for €54m, and Pathwire for almost $2bn. It also received a $1bn cash injection in March to assist its inorganic growth strategy.
Werner told UC Today that these strategic acquisitions were made based on the trend of customers wanting to engage with enterprises through their own preferred method of communication.
“We are at the stage where the vast majority of communications between consumers and enterprises are single channels,” he stated.
“But we are also in a trend which is just gaining traction rapidly and very powerfully which is omnichannel communication. Enterprises see that and consumers are demanding it.”
Werner acknowledged that though the demand for omnichannel solutions is still low it is gathering pace quickly, and the individual segments that make up omnichannel are robust.
“The text messaging market alone is around $20bn, and the voice market is $50bn – these are humongous markets on their own,” he noted.
“When you’re [integrating those markets] it’s going to take time; I think it will take 20 years before everything is integrated – that’s the scale. We’re talking about huge scale businesses. It’s going to take a long time, but the trend is there, and it is extremely powerful”
Partners will play an “important” role in delivering Sinch’s expanded portfolio to customers, Werner stated, adding that it intends to partner with the big cloud platforms and systems integrators.
I want the enterprise to combine the value of all of this to get the ultimate value – that’s absolutely crucial,” he stated.
“We need to be extremely partner-oriented to reach every single enterprise on the planet because there is no other way [a company can do that].”
Future M&A?
When pressed on the likelihood of future acquisitions, Werner said that any potential purchase will depends on how “logical” it is for Sinch and its customers.
“We will do what we think is logical to serve the consumer across the channels and with all the applications and services they think they need. When we see those areas, we will make a buy, develop it or we will try to partner with somebody,” he explained.
“The consolidation of this market and adding new services will continue for the coming years as well. It’s a huge market with a lot of exciting things happening in it and I think that will continue. Obviously, we need to pace that so we can consume and take care of what we’ve done, but I think in general the trend in this market will continue for a couple of years.”
The additions of Inteliquent, Pathwire, MessengerPeople, and MessageMedia are part of Sinch’s plan to become one of the “few” companies that can offer global enterprises text messaging, voice, email, and application channels with global delivery.
“There aren’t many companies who can do that – maybe two or three because it’s super hard to do – and we want to be one of them,” he declared.
“What we’ve done over the last few quarters really takes us from a messaging play to a true omnichannel, at scale, CPaaS play, and that position is very strong towards many of the world’s largest enterprises.
“What we’re seeing in CPaaS is a very interesting combination of the ‘here and now’ market, which is text, voice, email. and you have that in combination with this huge strong move up into applications and into omnichannel. That combo is seldom found: often you have the movement, but not the scale or you have the scale but not the movement – here we have the scale and the movement at the same time and that speaks to the power of the market.”
