Plivo Gets Some Cash to Expand Its ServicePlivo Gets Some Cash to Expand Its Service

Plivo's cloud-based API service is another step in the direction of moving communications to a true software model.

It's December and that means "tis the season" to give and receive, and receive is what startup Plivo did this week. The company announced on Monday that it had closed a $1.75M seed round financing from the investment firms Andreesen Horowitz, Battery Ventures, Qualcomm and SV Angel. Plivo has a Unified Communications platform that's delivered as a service and, if executed upon, could disrupt the (already disruptive) hosted telephony space.

Founded in December 2011, and live now for several months, Plivo claims to have dozens of enterprise class customers. Considering that they've managed to acquire these customers a single year after launching the company (not the service), it makes sense that high-profile investors would be eager to take a chance on Plivo.

So, what's so different about Plivo versus other hosted telephony and UCaaS providers? Plivo should be thought of as platform for enterprises and service providers to build messaging and telephony (both fixed and mobile) integrated applications. While they can provide the cloud-based call control, it seems the company would rather connect into another provider's cloud for that functionality.

Plivo provides developers with a robust API set for functions that enable web applications to perform tasks such as making calls, sending SMS texts, fetching number lists, checking account details, transferring calls, call center functions and other features. If it needs call control, then customers can choose to use what Plivo has to offer or use their existing solution.

Plivo's overall approach is somewhat similar to what Twilio has been doing in this space with cloud-based communications APIs, though the companies are pursuing somewhat different models, as this article states.

The approach Plivo took in building the service will make them a strong player in this market for years to come. The service was built from the ground up to provide communications platform services.

The company seems to have taken a best of breed approach when it comes to how the service was architected as well. Plivo has leveraged a series of best of breed partners to build anything that wasn't core. Partners include Softlayer, Rackspace, Internap and others.

This is a great example of how the cloud should be leveraged for anyone to build a service: Take a hybrid approach to the underlying network and IT architecture and then build on top of it. The result? A robust, rich service that took under a year to build from company launch.

So this leaves the question of whether what Plivo does will be something enterprises will actually buy or not. The answer to this depends on who you talk to within a company's IT department. The reason why we haven't seen many services like this before, nor have we really had a lot of demand for it, is because the industry simply wasn't ready for it. I think we're finally coming toward a mode where we think of telephony and UC as something that's architecturally different than legacy telephony.

Historically the phone systems we had were these fully integrated "boxes" that had all the functionality built right into them. We then shifted to IP and built exactly the same thing, just with IP interfaces on them. The name "IP PBX" was accurate, as that's what these systems really were.

Slowly but surely though, this industry has been shifting (more slowly than I think most of us would have liked) away from this model to one that looks and feels more like a real software model. Cisco, Avaya, Microsoft, etc. all have platforms that allow the buyer to build applications that interface with their systems. But what happens when a company really needs to build an application with a specific function and it's not available from the telephony provider? Wait six months for the next software release.

That's where a service like Plivo comes in. Leverage the cloud platforms for the additional functionality.

This model is becoming more and more common in the IT industry, which is the model that the communications industry has been following now for a number of years. The webification of this industry has the potential to unleash a wave of innovation that will create a "rising" tide for not just the likes of Plivo but the whole industry.