Communications Platform-as-a-Service (CPaaS) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Communications Platform-as-a-Service (CPaaS) Market is segmented By End-user (IT and Telecom, BFSI, Retail and E-commerce, Healthcare), and Geography.

Market Snapshot

CPaaS Market
Study Period:

2018 - 2026

Base Year:

2020

Fastest Growing Market:

Asia Pacific

Largest Market:

North America

CAGR:

34.3 %

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Market Overview

The Communications Platform-as-a-Service (CPaaS) Market was valued at USD 4.54 billion in 2020 and is expected to reach USD 26.03 billion by 2026 and register a CAGR of 34.3% during the forecast period (2021 - 2026). Unified Communications (UC), since its launch, has emerged as a cost-effective solution for organizations across various industries, such as BFSI, healthcare, and retail, among others. However, the cloud delivery of the unified communications offered by companies, like Mitel Networks Corporation and IBM, is shaping the way organizations manage their communication networks.

  • As the conversation moves from SMS and phone calls to IP-based messaging, it is, therefore, representative of CPaaS market shifts from CPaaS 1.0 to CPaaS 2.0. The CPaaS 1.0 platforms aimed at the addition of legacy communications like SMS text messaging and phone calls to applications through APIs, whereas, the CPaaS 2.0 overlooks technological leaps on building IP-based seamless communication experiences across video, voice, chat, file sharing, to name a few.
  • On a similar note in 2019, SAP Digital Interconnect reported email is the preferred messaging channel by which consumers interact with their service providers, which is further followed by SMS, and voice. Also, it stated that over 92% of companies have a digital transformation strategy to improve customer experience. This clearly hints on the usage of an omnichannel approach, where the CPaaS deployment comes in.
  • However, with a significant roadblock to customer engagement being siloed communication channels, Multiple customers have been observed navigate multiple channels before completing a transaction creating a loss of context for customers as they switch channels.
  • Therefore, each time a customer moves to a new channel, context needs to be re-established, including the customer’s identity and location. Thus, CPaaS vendors aim to create contextual communication for both customers and agents across websites, mobile app, or contact center platforms.
  • Further developments in the market have been on the lines of enabling a chat or click-to-call to interact with a customer service agent, or vice-versa. This led to reduced dependence on the backlogged customer service hotline. This boosted the APIs for messaging, presence, voice, video, presence, and user directories as the work got done faster.
  • On similar lines, Voximplant, in July 2020, revealed a new one-click integration with Google Dialogflow. This one-click integration combines Voximplant and Dialogflow functionality. In terms of benefit to the clientele, it spans from rapid application development to rollout experiences.
  • With the outbreak of COVID-19 and work at home (WAH) becoming a preferred mode of carrying operations, vendors for the market studied have been active in promoting WAH and expanding their business. For instance, as of April 2020, Teleperformance reached its work at home solutions target, with a penetration rate of 66% of operational staff in its core business, or more than 155,000 agents working from home in April.

Scope of the Report

CPaaS, or Communications-Platform-as-a-Service, is a cloud-based platform that embeds voice, video, chat, and messaging applications within an organization’s business applications. CPaaS acts as a middleware offering, wherein companies (vendors) build and distribute real-time communication software. This suggests that agents can communicate within the CRM application or contact center software platform in the context of the contact center. By end-user verticals, the market is divided into IT and telecom, BFSI, retail and e-commerce, healthcare, financial services, and other end-user verticals. Based on geography, North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa are considered in the scope.

End-user Vertical
IT and Telecom
BFSI
Retail and E-commerce
Healthcare
Other End-user Verticals
Geography
North America
Europe
Asia-Pacific
Rest of the World

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Key Market Trends

Retail and E-commerce Industry to Drive the Market Growth

  • With the rapidly changing customer purchasing trends, it has resulted in a dynamic shift in the retail industry from the earlier single point of interaction to omnichannel interactions through the web or social media. The growing demand from consumers has created the need for an enhanced shopping and service experience across all the channels.
  • Retailers across the globe have now understood the importance of omnichannel communication, and multiple brands today already post their content via social media, mobile apps, company websites, and other digital channels. Some retailers also offer two-way communication that lets their customers contact them using multiple channels.
  • CPaaS solutions primarily provide a cloud-based development framework for real-time communication. Retailers don't need to build their back-end infrastructures. The usage of developer-friendly APIs is done to add communication features to their websites, social media, and mobile apps, and it also combines all the customer data from multiple channels into one place.
  • The increasing retail sales across multiple regions is prompting retailers across the globe to use these real-time communication platforms to serve their customer better and increase their customer base.
  • For instance, Staples, a retailer, used CPaaS as part of its Easy System, a smart-ordering platform, leveraging an IoT-driven virtual assistant that helps organizations manage office supplies. With this, its employees can order office supplies, connect with a contact center agent on various channels, such as voice commands on an Easy System IoT device or mobile app, email, SMS messaging, and Slack integration.
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Asia-Pacific to Witness Highest Growth

  • With North America and Europe reaching a maturing curve on digital transformation, Asian counterparts have been witnessing a multi-fold growth in demand for CPaaS solutions. Major factors driving the same are increasing connectivity and increasing mobile devices for communications and online transactions, to name a few.
  • Likewise, multiple global CPaaS players have been aiming at establishing a more substantial presence in Asia. For instance, in early 2019, 8x8 Inc. acquired Wavecell for entry into the Singaporean market along with a widespread presence in Hong Kong, Indonesia, the Philippines, and Thailand. Similarly, in September 2019, Twilio announced its successful expansion into the Japanese market with new partnerships with seven consulting partners and opened two Japanese offices in Yotsuya.
  • Infobip, on the other hand, as of March 2020, offered its WhatsApp Business API to drive customer engagement at CarDekho, an end-to-end car research portal where customers can find information based on their car preference and current car buying state. And in November 2019, Asia Insurance reported a 9x faster Policy Renewal Process with Automated Messaging from Infobip.
  • Then, as of July 2020, Sinch acquired ACL Mobile for INR 5,350 million, to leverage ACL’s direct connections to operators in Malaysia, and India for end-to-end connectivity. The company also reported that with India housing a huge mobile market with a population of over 1.3 billion, Sinch would have access to a vast market amidst favorable government initiatives to drive new financial services.
  • With the outbreak of COVID-19, the Vonage Video Trends reflected that APAC had recorded the highest increase in Vonage video minutes in April over March 2020. With 83% of consumers across China preferred video chat to communicate with businesses and service providers before the COVID-19 outbreak, the market potential for CPaaS providers is set to rise amidst the Work at the Home scenario.
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Competitive Landscape

The Communications Platform-as-a-Service (CPaaS) Market is highly competitive, primarily owing to the presence of multiple small and large vendors in the market conducting business in domestic and international markets. The market appears to be fragmented, with key vendors adopting major strategies like product innovation, mergers, and acquisitions to widen their product functionality and stay competitive. Some of the recent developments in the market are:

  • June 2020 - 8X8 Inc. launched an open communication platform to deliver and scale work-from-home enterprise communications with the availability of CPaaS programmable applications and APIs, including SMS and 8x8 video. The Open Communications Platform accelerates digital transformation initiatives and strengthens business responsiveness and resilience by providing secure, scalable, and extensible capabilities.
  • May 2020 - Twilio, a prominent cloud communications platform provider, announced that Twilio programmable video would be powering Zocdoc's new free, HIPAA-compliant telehealth video solution. Any provider can sign up to use Zocdoc's video service, powered by Twilio, to facilitate all of their virtual appointments.
  • May 2020 - Vonage integrated its contact center and unified communications solutions for a single source of customer support. The communications suite primarily includes the company's contact center (VCC) and business communications (VBC). It will help the businesses in optimizing their customer communication, improve internal collaboration, customize their experience, and maximize productivity.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Industry Ecosystem Analysis

      1. 4.2.1 Pure-play CPaaS

      2. 4.2.2 Enterprise-grade CPaaS

      3. 4.2.3 Telco-driven CPaaS

      4. 4.2.4 Service Provider-based CPaaS (enablement partners)

      5. 4.2.5 Hybrid CPaaS Offerings

    3. 4.3 Assessment of COVID-19 Impact

    4. 4.4 Pricing strategies and Business Model Analysis

    5. 4.5 Comparative Analysis of Adjacent Markets, such as UCaaS and Traditional Deployments

    6. 4.6 Market Drivers

      1. 4.6.1 Growing Shift of Companies from Adjacent and Traditional Models

      2. 4.6.2 Growing Demand for Omnichannel Marketing

    7. 4.7 Market Challenges

      1. 4.7.1 Growing Personal Data Regulations across End-user Verticals, such as Healthcare

    8. 4.8 Market Opportunities

      1. 4.8.1 Technological Innovations, such as Context-based Transactions, Lightweight Deployments to further Drive Adoption

  5. 5. KEY TRENDS IN CPAAS INDUSTRY

    1. 5.1 Serverless Deployments

    2. 5.2 Advent of Machine Learning and AI

    3. 5.3 Omnichannel Communication Through Bots

    4. 5.4 Security and Privacy Paradigm

  6. 6. MARKET SEGMENTATION

    1. 6.1 End-user Vertical

      1. 6.1.1 IT and Telecom

      2. 6.1.2 BFSI

      3. 6.1.3 Retail and E-commerce

      4. 6.1.4 Healthcare

      5. 6.1.5 Other End-user Verticals

    2. 6.2 Geography

      1. 6.2.1 North America

      2. 6.2.2 Europe

      3. 6.2.3 Asia-Pacific

      4. 6.2.4 Rest of the World

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles

      1. 7.1.1 Twilio Inc.

      2. 7.1.2 Vonage Holdings Corp

      3. 7.1.3 MessageBird B.V.

      4. 7.1.4 Plivo Inc.

      5. 7.1.5 Snich AB

      6. 7.1.6 Voximplant (Zingaya, Inc.)

      7. 7.1.7 8x8 Inc

      8. 7.1.8 Voxvalley Technologies

      9. 7.1.9 Bandwidth Inc. (Bandwidth.com)

      10. 7.1.10 IntelePeer Cloud Communications

      11. 7.1.11 Wazo Communication Inc

      12. 7.1.12 Avaya Inc.

      13. 7.1.13 AT&T Inc.

      14. 7.1.14 Mitel Networks Corporation

      15. 7.1.15 Telestax

      16. 7.1.16 Voxbone SA

      17. 7.1.17 Iotum Inc.

      18. 7.1.18 M800 Limited

      19. 7.1.19 Infobip Ltd

      20. 7.1.20 EnableX.io (VCLOUDX PTE. LTD)

    2. *List Not Exhaustive
  8. 8. INVESTMENT ANALYSIS

  9. 9. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The Communications Platform-as-a-Service (CPaaS) Market market is studied from 2018 - 2026.

The Communications Platform-as-a-Service (CPaaS) Market is growing at a CAGR of 34.3% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2020.

  • Twilio Inc.
  • Vonage Holdings Corp.
  • Sinch
  • Avaya Inc.
  • 8x8 Inc.

Are the major companies operating in Communications Platform-as-a-Service (CPaaS) Market.

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