The global Communications Platform as a Service (CPaaS) market, despite various challenges, is set to witness a significant growth surge, according to a recent report by S&P Global Market Intelligence. Offering an in-depth analysis of CPaaS market dynamics, the report highlights five key takeaways that will shape the future of the CPaaS industry.
Emerging Economies: The New Frontier of Growth
Even in the face of an economic slowdown, the CPaaS market is poised to achieve robust, double-digit growth rates, thanks to growing demand in emerging economies outside of North America. With mobile-first regions such as Asia-Pacific, Africa, the Middle East, and Latin America leading the charge, this global shift is creating unprecedented opportunities for telecommunications companies (telcos). As more telcos leverage API-based communication services through CPaaS platforms, the entire CPaaS ecosystem stands to benefit.
Transformative Impact of Telcos on CPaaS
Telcos, despite currently holding a small market share, have the potential to significantly expand the overall CPaaS market. By delivering digital business-to-consumer (B2C) services through CPaaS platforms, telcos could fuel the CPaaS enablement segment’s compound annual growth rate (CAGR) to reach 30% over the next five years. This transformative impact on the CPaaS market will likely result in a combined market CAGR of almost 18%.
SMBs: An Untapped CPaaS Goldmine
Small and medium-sized businesses (SMBs) represent a key growth opportunity for the CPaaS market. Over the past two years, digital transformation initiatives in SMBs have doubled, driven by the COVID-19 pandemic. The desire for improved customer experience and increased process automation amongst SMBs underscores a high demand for digital transformation-enabling technologies like CPaaS. As a result, the SMB segment is projected to grow at a CAGR of over 20%, reaching nearly $6.5 billion by 2027.
North America’s Influence Diminishing
The North American region, although currently dominant in the CPaaS market, is expected to see a reduction in its influence. The report predicts that regions outside of North America will represent most of the market revenue by 2025, a shift slightly delayed from earlier forecasts. This shift can be attributed to emerging markets in mobile-first regions showing promise of strong adoption rates by 2023-24.
Overall CPaaS Market Expansion
With these factors in play, the global CPaaS market is projected to grow at a CAGR of 14% over the next five years, surpassing $28 billion by 2027. The report suggests a downward adjustment due to the impact of macroeconomic factors and a slowdown in North America, but the overall trajectory remains overwhelmingly positive.
To delve deeper into these trends and opportunities, join us at the upcoming CPaaS Acceleration Summit in Amsterdam (CASA23) in September. The summit will feature thought leaders from various industries, SMEs, and telco representatives for comprehensive discussions and deep-dives into the CPaaS landscape’s growth trajectories. Your presence at CASA23 will keep you ahead of the curve in the fast-evolving CPaaS marketplace.