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Still using an office phone? How quaint, and primitive

Jeff Lawson, CEO of Twilio
Thursday, 18 Jul 2013 | 8:00 AM ET
Sharon Dominick | E+ | Getty Images

The world of communications is undergoing the largest change since the invention of the telephone. What was once stagnant, expensive and esoteric is becoming a vibrant hotbed of innovation due to one main thing—the rise of software people empowered by the cloud.

In the last decade, we've seen cloud computing transition from an audacious idea to a mainstream solution. In companies around the world, from small businesses to the midmarket to the enterprise, software is migrating to the cloud.

Instead of running their own copies of "big hardware" and "big software" in their own data centers, businesses are turning to multi-tenant clouds. Category after category has undergone this transition, starting most famously with customer relationship management. In communications, the closet to cloud migration is happening now.

Meanwhile, we're also seeing a huge shift in consumer behavior as communications migrates from special purpose devices like traditional phones to general purpose computers.

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Think about it: Ten years ago, if you wanted to make a telephone call, you picked up a telephone—a device manufactured to do that one thing forever. On the day it rolled off the assembly line, it had all the capabilities it would ever have. Want a new feature? Throw that thing away and buy a new device.

(Read more: Death of the textbook—and the 50-pound bookbag)

Thanks to a new generation of smartphones and also, increasingly, anything with a Web browser, a new generation of consumers now expects real-world problems to be solved by software. Even when they're not coders themselves, this generation understands that with a software mindset, almost anything they can imagine is not only possible, but practically inevitable.

This has led to an increased focus on the user—and the user's experience. Software people know they have the power to fix things, for their customers, for their friends, for themselves.

Are you frustrated by the long line for a table at your favorite restaurant? Go for a walk and get a message when your table is ready. Don't have change to pay the parking meter? Pay by text. Can't get a cab in San Francisco? Download an app that shows you where the closest cabs are, order one with the push of a button and receive an SMS when your ride is on its way.

Inside enterprises we are seeing communications being embedded at just the right moment in a business process. Malfunctioning equipment can now trip an alarm, send an SMS, escalate to a voice call, and depending on the severity of the issue, set up a conference bridge with key players.

Last minute staffing changes can be communicated automatically, with employees using text messaging to accept work schedules. And instead of manually dialing from their desk phones, salespeople click to call from inside other cloud software like Salesforce, which also records the interaction.

(Read more: A $34 billion conversation in the cloud)

If you are familiar with the traditional telecommunications industry, you'll know how unusual all this innovation is. For decades, communications-related initiatives foundered on the twin shoals of high cost and complexity. Adding voice or SMS to another program meant buying expensive hardware, installing and updating software and hiring someone with specialized telecom expertise.

There were only a few players, and they charged for everything from annual licenses to upgrades, maintenance and support. Customers were pretty much locked in by whatever their gear—or high-priced consultants—could do.

Source: Twilio

Then the cloud came along and made it possible for companies like Twilio to offer not only new business models, but entirely new ways of thinking about communications. Instead of purchasing PBXes and T1 lines, companies have begun to hire developers to write apps that connect to the network through telecommunications APIs.

Where the old equipment was basically stand-alone and dedicated to a core function, the new apps are dynamic, mobile and easily integrated with other business software. They are fast to build, fast to deploy and they can easily be improved. Advancements are no longer limited to the slow pace of companies manufacturing telecom guts—servers in our closets and plastic on our desks.

Power has shifted from huge, slow-moving telecommunications oligopolies to the democratized world of software people, who are rolling communications into their companies, their applications and their workflows. Instead of one application—the phone call—the future is a million context-specific interactions.

Going forward, APIs are the new dial tone. Without a doubt, in 10 years the overwhelming majority of communications applications will be cloud-based, user-focused and infinitely responsive to business needs.

—By Jeff Lawson, CEO of Twilio, a 2013 CNBC Disruptor 50 company from the telecom sector.

(For more coverage of the CNBC Disruptor 50, click here)

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