Snapchat Acquires AddLive, and What that Means to Other WebRTC API Platform Vendors

The most interesting and alarming acquisition in the WebRTC space yet? It seems like The Verge spilled the beans: AddLive got acquired by Snapchat. Not many details are provided, but we can assume that AddLive made money out of this transaction. Today, AddLive's blog added the following entry:

We are very happy to announce that AddLive is joining Snapchat. While we have no immediate plans to add new customers to the platform, we intend to continue providing our ongoing video chat services to some of the most innovative companies in the world. Our special thanks go out to all our early customers and everyone who has helped us along the way. We look forward to continuing our journey with Snapchat.

So... Snapchat snapped AddLive and now all I can do is chat about it? If you don't know AddLive, it is one of the WebRTC API Platforms. Developers go to AddLive to build their service, and AddLive provides them the tools they need. I did an interview with Kavan Seggie, CEO of AddLive, about a year ago. It will give you some idea what AddLive is all about. While The Verge talks about a silent acquisition made months ago, it doesn't fit with the realities of AddLive's business and actions. The more likely story is that Snapchat was a customer of AddLive, and now that it released its own video chat feature, it decided to acquire the service outright - something that was concluded as recent as last week. What's interesting here is that this is a service company (ephemeral messaging in a way) purchasing a WebRTC API Platform. Snapchat isn't just using it, or taking out of the market another service. It decided on an outright acquisition, preferring to own the technology and the people behind it, than to use them as a supplier. Some things to note:

• While WebRTC is challenging, AddLive were able to build a VERY successful platform with a team of 8
• AddLive isn't taking in new customers, but continues to support the existing ones. This is probably due to ongoing contracts and obligations it has - ones it will probably not renew when the time comes
• If AddLive continues working independently of Snapchat for other customers, will it still be as attractive to new customers as it were just two weeks ago?
• Unrelated but equally interesting - Snapchat is using AddLive and its WebRTC video calling service in its recently introduced real-time video capabilities. WebRTC is real and it is here now

This acquisition has me worried and happy at the same time. Happy because AddLive deserve this. They have a top notch platform - talking to their existing customers in the past as well as researching them for my WebRTC API Platform report made that clear. That said, this is a talent and infrastructure acquisition. Snapchat has no need for AddLive's customer base and business models - these are not going to last. I am worried because this places the WebRTC API Platform niche as well as the whole WebRTC ecosystem in turmoil. It might indicate we are taking the route of the BaaS platforms. When StackMob, a BaaS player, was acquired by PayPal, Nancy Gohring wrote this post titled PayPal's StackMob acquisition should serve as a warning signal on CITEworld:

PayPal became the latest big name to get into backend-as-a-service with its announcement that it has acquired StackMob. While these acquisitions lend legitimacy to the BaaS market, they should also make BaaS customers think hard about which provider they choose.

PayPal didn't take long to take StackMob off the market - 2 months:

This morning, StackMob's founder Ty Amell announced that the backend as a service offering will be shut down. PayPal acquired StackMob in mid December. It's one of several backend-as-a-service (BaaS) offerings, which help companies develop mobile apps more quickly and cheaply by providing certain services in the cloud. The move should encourage BaaS customers to think about their choice of providers, because it's clear consolidation is underway in this market. That means some services are bound to shut down. While most providers will offer a way for users to export their data, the process of moving an app to another service won't be easy.

My gut feeling? AddLive will go the same route. Once existing contracts are over, AddLive's won't renew them and the service will be closed. This will leave customers with the need to select another WebRTC API Platform to use. This turmoil will definitely affect the selection process developers will be making when selecting a WebRTC API Platform. For a more positive note, check out Chris Kranky's take on Snapchat's acquisition.

Why is this important?

This has ramifications beyond Snapchat, AddLive and AddLive's immediate customers.

• The large WebRTC API Platform players, such as Twilio and TokBox should be happy: a new customer will likely opt for an established and deep-pocketed platform vendor instead of a small player that might be acquired and taken off the grid in a heartbeat
• The smaller WebRTC API Platform players, those focusing on growing and attracting customers: they are going to find it harder now to onboard new customers, as these will think twice before using a platform that is up for sale
• At the same time, the smaller vendors who have proven technology with known customer wins: they can prep themselves to get acquired. Snapchat probably isn't the only one shopping around for such a technology

Note: If you have purchased a copy of my Choosing a WebrRTC API Platform report, you will receive a longer form document explaining the ramifications of this latest development on this space.