The future of communications-platform-as-a-service (CPaaS) is a topic of increasing interest as the hype surrounding the industry begins to fade. According to a recent paper by Arthur D. Little, two trends are emerging that are set to shape the future of CPaaS, and offer important opportunities to CSPs.
CPaaS Trends
First, enterprise customers are starting to demand more advanced features beyond basic application-to-person (A2P) and “best effort” solutions. This is driven by a need to enable omnichannel and 5G-based use cases such as the metaverse. As a result, legacy technologies are being replaced by new, more sophisticated offerings that can support these advanced use cases.
Second, classic CPaaS services are finding a new market among savvy mid-sized businesses. While traditional CPaaS players have largely focused on large enterprises, the mid-market and lower market represent a relatively untapped opportunity due to the high go-to-market cost of targeting these customers.
Opportunities for CSPs
These trends are creating new opportunities for communication service providers (CSPs) to stake their claim in the CPaaS industry. For CSPs targeting the large enterprise space, the key to success is offering a high-quality network and controlling the necessary control points to guarantee service. This will enable CSPs to capture the demand for more sophisticated CPaaS offerings as legacy technologies make way for 5G-driven use cases.
In the mid-market and lower market, CSPs can use their existing assets and relationships to retake control of the connectivity space for businesses. The sheer volume of these customers makes them an attractive target, and CSPs are well positioned to take advantage of this opportunity due to their existing assets and relationships.
To compete in this market, CSPs need to focus on acquiring the necessary capabilities. This may involve acquisition, partnering, or renting CPaaS services, depending on the specific circumstances and market dynamics. It is important for CSPs to act now in order to seize this opportunity before it passes them by.
Conclusion
This perspective from Arthur D. Little resonates with comments made by industry experts during our recent Godfathers of CPaaS panel session. The panelists emphasized the importance of advanced features and the untapped potential of the mid-market and lower market as key drivers of the future of CPaaS.
In conclusion, the future of CPaaS is being shaped by the demand for advanced features among large enterprises and the untapped opportunity in the mid-market and lower market. CSPs that are able to acquire the necessary capabilities and take advantage of these trends will be well positioned to succeed in the CPaaS industry.
Read the Arthur D. Little paper here: https://www.adlittle.com/en/insights/viewpoints/cpaas-beyond-hype
My lifetime in IT and telecoms has been dedicated to innovation, building bridges and creating change. From the early days of cloud communications to working with operators on innovations and business development, and currently emphasizing APIs, CPaaS/CX and AI, my journey has been one of continuous evolution.
As founding partner at CPaaS Acceleration Alliance and The Next Cloud I'm privileged to help global telcos and techcos thrive in a fast changing world - through events, community building, strategy and global business development. I thrive on challenges and change, strategizing in cloud communications, and bringing people together for mutual success. Travel and continuous learning are my passions.
I believe the global communications industry is pivoting to prioritize customer experience and impactful solutions over mere technology and platforms, and we can tackle societal challenges by merging the strengths of corporates and innovators within new ecosystems.
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