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Democratization is envisioned from a small shop in Pula to the largest global users
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It took the internet ten years from idea to mainstream; the metaverse will take less
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The market sees many futuristic ideas and possible applications, but the question is what the actual business model is
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We build a lot internally, acquire what we lack and what can accelerate us, but targeted
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The main task of Ivan Ostojić, the new member of the Management Board for the development of Infobip’s business, is to establish a long-term strategy and accelerate the delivery of solutions from the first Croatian unicorn to the market. Ostojić joined Infobip from McKinsey, where he was a founder and member of its global technology council. We discussed the current phase of development and application of innovative concepts, the main challenges, and the direction Infobip is heading with Ostojić at the venue showcasing the latest trends in the industry, the Mobile World Congress in Barcelona.
What are the main trends that marked this year’s Mobile World Congress?
– Currently, two trends are intertwining: one relates to infrastructure, hardware, and support systems. There is a lot of talk about 5G networks, complex cloud infrastructure, the Internet of Things (IoT), and its applications from industry to healthcare. This is the base upon which various upgrades and vertical applications are built, which we see at all these booths at MWC, such as intelligent operating rooms, smart manufacturing facilities, etc. The level of automation and the use of artificial intelligence is increasing to transform what the infrastructure enables into value for business. These are the two macro trends, the base and applications with all new digital technologies, and new ways of communication are also emerging. Here, I primarily think of the metaverse, which will be another addition to everything we have. And finally, one question hangs in the air: how will all this be monetized? We see many futuristic ideas and possible applications, but the question is what the actual business model is, how value is created. We still do not have many answers. That is why there has been talk about 5G for the past two to three years, but we still do not see any progress in application.
How far are we from real application and concrete business models?
– It is actually ironic because we are technically ready for many things, but it is unclear who will monetize it and what the business model is. Only the metaverse needs a lot more development, but for everything else I mentioned, we are ready. Now the question arises about business models and tying them to value. We know that artificial intelligence brings value, but we have not yet reached the stage of mass application.
What is Infobip’s role in this?
– Infobip is actually a cloud communication platform. I spoke about two macro trends, infrastructure and application, and we are a huge platform at the intersection, connecting infrastructure and applications. The beauty of our position lies in the fact that we have a platform that can develop in various directions. Since we are connected with telecommunications operators and data centers, we have simplified the integration of communication channels into various applications and uses. We can support artificial intelligence, IoT, we can develop towards the metaverse, but also towards the core business that is already being monetized today, such as marketing automation and similar. We are currently investing the most time in that, but in principle, we have an excellent base for the future.
What have you strategically committed to first – has that direction crystallized or are you still exploring options?
– We are very agile. We have a vision to democratize communication, or the future of communication. This practically means that we hide all that complexity of infrastructure from our users. Furthermore, these are our clients, businesses that have their own users, and Infobip’s role is to simplify things for them as much as possible so that businesses can immediately access the communication channels we provide with minimal infrastructure costs. These are primarily SMS, WhatsApp, Viber, but we also have other communication modalities such as video, voice messages. A lot of upgrades go along with this entire communication set that will also maximize simplicity so that users can easily integrate and automate communication with their end users. An example of this is chatbots as a simple way to enable your user to get an answer to a question, make a financial transaction, or book an appointment at a restaurant, with a doctor, etc. All this using our communication channels and thanks to upgrades and automation. And we plan to democratize that part. In the third wave, we would bring advanced technologies such as AI, which would then add various applications to everything we do. That is our vision, that is what we are working on. We are starting to accelerate the delivery of all these different products into the hands of users, after which we will enter a deeper phase in which we will upgrade products with new technology.
The idea is for the user to get a simple solution that they just apply? How far does that democratization go?
– Democratization is envisioned from a small shop in Pula that wants to send promotional messages via WhatsApp to its users for some discount to the largest global users who want to use the entire omnichannel communication system, so they can reach you both by message and email, and the entire process is connected to analytics. We have simplified everything and maximally freed users. They can take the solution and integrate it into their applications and immediately create new value for themselves.
What phase are you in regarding development and go-to-market strategy?
– When it comes to the product, we are quite far along. In Croatia and around the world, we have excellent engineers, and they have been working on this for a while. Now we are at a stage where some products have been well received by users and are growing, and for some, we are working on accelerated go-to-market models to put as many of these products into the hands of users as possible.
Who are the users?
– We have quite a few corporate users, then digital native companies like Uber, but we are increasingly becoming, given our partnership philosophy, the partner of choice. We work with technology platforms that build on our technology, for example, automation in marketing, and then further market our joint product to corporate clients. We are becoming the ideal partner for them in a situation where we have complementary products. We are increasingly working this way.
All this accelerates Infobip’s diversification in revenue structure and number of products. What is the long-term strategic goal?
– You have rightly noticed that we are starting to have more revenue streams, even different models. Some are SaaS, some are consumption-based, but it should be noted that we are de facto a platform. All our APIs are integrated into one platform, we have a platform business model whose advantage is also cross-selling, or easier introduction of new products into the hands of existing users. If a business entity as our client already has four Infobip solutions, it is easier to take on the fifth that enhances everything they have done so far. That is a small step for us and for the client. We do not think about silos between products, but how to further develop that platform business model.
Recently, you have been increasingly focused on artificial intelligence; what are the further plans in this regard?
– Currently, we have two things. With some partners, we are already applying AI, for example, to detect when a user will stop paying for a certain service so that we can automatically send them a message or discount to retain them. Algorithms predict this, and we are already applying similar things with the help of partners. We are already extensively using AI in our products, but the user does not see it. For example, we have a firewall that can detect fraud and various other issues related to messages. We use AI to detect unusual behaviors on the network and who is the source of that to check if it is a fraud attempt. When it comes to our internal development, we are focused on AI, and when users start to accept these products more, we will go more aggressively to market.
Is the market ready? When do you expect examples of more widespread use of artificial intelligence in business?
– Yes, the market is ready, especially in the area of marketing automation. It has been proven that some algorithms bring value to business and that it can be quantified. In the future, we will see various applications of AI towards end users. For example, in healthcare for disease detection based on some signals from sensors. We know that these algorithms work; it has been proven; they just need to be realized. That is one application, towards the end user. Another example is towards businesses. Here, in my opinion, the greatest applications in the first wave are in marketing automation, where we already have AI algorithms that optimize whether you will get an ad on Instagram, Facebook, or LinkedIn, depending on how they predict what you will click on; or when you visit a certain website, the algorithm will say what package or offer they need to provide for you to buy a product that interests you. Another example is the application of AI in manufacturing, for instance, the automation of entire production systems in factories controlled by artificial intelligence or the optimization of some processes in production. Algorithms predict, for example, when a machine will break down, which affects production efficiency. The manufacturing side is very broad because there are many industries and ways AI can be applied. The biggest challenge is to find a business model that will succeed in the market.
The latest direction of development is the metaverse. How far has it come, are there real business models?
– I see the metaverse as an upgrade of some channels. Currently, it is mainly applied in gaming, and now many companies are inserting their advertising coupons into metaverses for gaming. For example, they introduce a fictional character of a food delivery person into a video game, but they also include a real coupon. We are increasingly seeing the application of the metaverse in high fashion brands, so some have their stores where you can try on clothes in the metaverse. Thus, commercial application is beginning. Infobip has its place because we can close the chain in the sphere of communication. For example, when you go to a virtual store and try on a piece of clothing, you can directly order it from there, pay, and you will receive an SMS confirmation that the goods are on the way. We can close the chain from the moment a person has a need to communicate to the moment the delivery is executed. Depending on how the number of people and traffic in the metaverse grows, we will increasingly engage in it.
How far are we from that?
– Large corporations will see the metaverse as a source of traffic for their products and services. The more users there are who use it for various applications, the more industries will be attracted to it, thus creating a market. I believe everything is going in that direction, but it will take some time. We can conceptually view this as the development of the internet; it took a little over ten years from idea to mainstream. Now everything is happening faster. The metaverse will not need ten years, but the revolution will not happen in a very short time, for example, in six months. We will experiment with that in the next period.
Acquisitions are part of Infobip’s expansion strategy; what is currently planned?
– We have a strategy of smart acquisitions. We build a lot internally, acquire what we lack and what can accelerate us, but targeted. We have mostly resolved the infrastructure; now we are looking at what can further upgrade our portfolio in terms of additional products and innovations. As part of the strategy, we will focus on more specific applications of our channels in individual industries.
