The recent acquisition of Vonage by Ericsson has caused quite a stir in the tech industry, with many speculating about the future direction of the combined company. One thing is becoming quite clear: the acquisition was driven largely by Ericsson’s interest in Vonage’s Communications Platform as a Service (CPaaS) technology, originally developed by Nexmo.
In a recent Ericsson CTO Focus session with Ericsson’s CTO Erik Ekudden and Vinod Lala, Chief Strategy Officer at Vonage, the two executives discussed the expanding CPaaS market and their joint journey in this field. Ekudden emphasized the exciting possibilities that the acquisition brings, both in the short term with CPaaS and in the longer term with network innovation.
Lala added that the acquisition will allow Vonage to expand its reach and scale, enabling it to better serve its customers and take advantage of new business opportunities. He also highlighted the importance of the network in providing high-quality, compliant, and embedded video experiences, as well as in enabling the use of advanced capabilities like AI and 5G.
CPaaS Use Cases Evolving
The CPaaS market has experienced sustained growth in recent years, with Vonage’s acquisition of Nexmo in 2015 setting the stage for even more growth in the coming years. According to forecasts, the market is expected to grow by a factor of 3 to reach $22 billion in the next four to five years.
Traditionally, the main use case for CPaaS has been in business-to-consumer communications on mobile devices. However, with the advent of new technologies like artificial intelligence and 5G, the potential for CPaaS to be used in a wider range of applications and markets is rapidly expanding according to Lala.
One example of this is the integration of AI into CPaaS, which allows for two-way messaging and conversations with AI support, as well as enabling payments and other transactions. Additionally, the use of video in CPaaS is becoming increasingly prevalent, with a focus on providing high-quality, compliant, and embedded video experiences.
Ekudden and Lala both emphasized the importance of working together to create new and innovative use cases that will enhance consumer and enterprise experiences through innovative services. This means good news for operators, who will be able to monetize already invested network capabilities through service exposure (APIs), and for developers, who will have a wider range of tools to work with as they look to innovate and create new applications.
The rollout of 5G networks will also open up new possibilities for CPaaS, as it will provide a higher-speed, lower-latency platform for developers to build on. This will allow them to create innovative new applications that can take advantage of the advanced capabilities provided by 5G networks. Lala mentions examples like network slicing to provide service-level agreement (SLA) based network services on both public and private networks that are tailored to specific use cases. This could allow more secure and reliable video conferencing, useful in healthcare or gaming for example, or more secure two-factor authentication taking into account network information.
Overall, the acquisition of Vonage by Ericsson represents a significant milestone in the evolution of the CPaaS market. The session provides valuable insights into the direction that Ericsson and Vonage are heading in and the opportunities they see for both companies. With the CPaaS market set to continue its strong growth in the coming years, it will be interesting to see how the combined expertise of Ericsson and Vonage will shape the future of this field.
Vonage will be participating in our upcoming CPaaS Showcase at the CCA event in Ft Lauderdale, Florida, on Jan 16, 2023.
Over the past 30 years Rob (co-)founded various tech companies, including one of the leading Dutch hosted voice providers (before hosted voice became the new normal). Today, he works with telcos/CSPs and some of the world’s leading technology providers on innovation and growth, especially in the rapidly changing world of cloud communications and CPaaS. Rob has this crazy belief that the strengths of corporates and innovators should be combined in new ecosystems to create optimal customer experience, new business models and solutions for some of today’s big problems.