CPaaS Communication Platform as a Service (Global Market)

2023: The global CPaaS market grew 30% to $16.7 billion over the year

At the end of 2023, the costs in the global CPaaS market (communication platform as a service) reached $16.7 billion. For comparison, a year earlier, expenses in the relevant area were estimated at about $12.8 billion. Thus, growth was recorded at 30%, as stated in the Market Research Future review, published in early December 2024.

One of the drivers of the industry in question was the COVID-19 pandemic, which provoked a rapid increase in the popularity of various online platforms. Under such conditions, companies around the world have an urgent need to provide reliable and effective communications with customers. CPaaS tools help solve the problem: these cloud platforms provide a set of tools and a software interface (API) for integration into applications and services of various means of communication, such as voice, video, messaging and much more.

CPaaS cloud offerings allow companies to quickly deploy and manage communications services without the need for extensive local infrastructure. CPaaS helps businesses increase customer engagement and optimize their communication processes. CPaaS tools can be used to automatically forward calls, answer general user questions, and report interaction with them. The introduction of artificial intelligence and machine learning has a positive impact on the industry. In particular, AI tools can be used for speech recognition, text message analysis, and query interpretation.

However, there are also restraining factors. While CPaaS solutions offer powerful communication tools, their seamless integration with existing systems can be difficult. Difficulties arise due to various technology stacks, APIs and protocols used in different organizations. Therefore, highly qualified specialists may be required to implement CPaaS. In addition, there are security-related issues. Data breaches lead to a loss of trust and revenue, and therefore companies need to provide the required level of protection when using CPaaS.

In general, enterprises around the world are implementing CPaaS to increase the flexibility and scalability of their communication infrastructure, which allows them to quickly adapt to changing customer requirements and market trends. Among the key players in the industry are:

• Bandwidth;
• Sinch;
• Plivo;
• Intel;
• ePeer Cloud Communications;
• ALE International;
• Avaya;
• Vonage;
• Twilio;
• Infobip;
• 8x8.

In terms of end-use, the market is segmented into BFSI (Banking, Financial Services and Insurance), IT and Telecommunications, Retail and E-Commerce, Healthcare, Transportation and Logistics, Travel and Hospitality, and other areas. The healthcare, IT and telecommunications sectors dominate, providing the bulk of the revenue. Geographically, North America is leading thanks to the presence of strong players in various industries. The Asia-Pacific region has seen marked growth due to increased public investment in digital transformation.

Market Research Future analysts believe that in the future, the CAGR in the market under consideration will be 30.5%. Thus, by 2032, the cost of CPaaS on a global scale, according to the presented estimates, could reach $140.5 billion.^[1]

2020: IDC CPaaS Market Outlook

According to the international research company IDC, one of the most growing markets is CPaaS, communication platforms as a service. Mark Winter, vice president and partner of IDC, offered his ideas on the subject.

The market volume was $4.56 billion for 2019 and promises to grow by 39% by 2023.

One of the drivers of this process was the development of DevOps, that is, the close cooperation of software development specialists with IT service specialists.

Another reason, according to the expert, is the desire of companies to improve their customer experience. Often, interaction with the client becomes more important than the characteristics of the product itself, and it is the API and CPaaS that allow you to build the most personalized relationships with each consumer.

Finally, digital transformation plays a big role, which has become a key factor in growth for large companies. Corporations spend huge amounts of money to keep up with the trend, which directly affects the inflow of investment in the CPaaS area.

Cloud technologies are used primarily in the fields of voice and text communications. So, among the common options for using automation in telephony, one can name number masking, intelligent IVR and virtual assistants, automated voice notifications, call tracking.

As for SMS and messengers, the main uskays are two-factor authentication, usually used by banks, and notifications or delivery reminders that increase customer loyalty, showing that the company cares about their convenience. In addition, business is increasingly using bots to support chat, ranging from automated answers to typical questions to AI-based solutions.

According to Mark, do not forget about the video, and three main areas stand out here. The first is communications and collaboration. Any use of video content for sales is suitable for this category, including augmented reality technology, when a consumer can feel at the wheel of a car or check how furniture fits into the interior. Actively developing areas of video banking and telemedicine are also part of this group.

The next category is' show me ', that is, any cases related to the need to show the interlocutor objects around.

For example, receiving a remote consultation of the master in the event of a car breakdown or, if we are talking about car sharing, registering the fact of a breakdown even before the start of the trip.

And the third direction is video content in the field of education and social media.

According to Mark, 90% of profits within the communications market come from three sources: calls, SMS and phone numbers.

Nevertheless, operators record a stable drop in income, which is why they are forced to develop other business paths. It is cloud platforms and API integration that become the answer to the time challenge: now it is important to ensure not only the passage of a call and the delivery of a message, but also the control of all processes in a single system.

The first example is visual editors for setting up automated communication with clients. Their main advantage is to simplify access to complex technologies: managers without a technical background can independently configure calls, smart IVRs, messaging and make changes to scripts in a matter of minutes. In particular, this is how the Voximplant Kit works, launched in an updated version in February 2020.

The second is communication platforms that use the API to connect to any corporate system to manage employee relations with customers and colleagues. We see the development of this direction in the transition to single universal platforms that combine all the processes of the company and do not require the addition of functionality by third-party services. What does such association mean? Seamless channel switching, analytics, security, and storage.

Challenges in CPaaS development:

• Scale: Operators face the task of sending millions of messages a day. It sounds simple, but in reality there are a number of technical limitations.
• Complex communication processes require more detailed analytics: how to track the effectiveness of individual channels or how to learn about reading SMS.
• Reliable communication in the cloud. The serverless approach was not originally intended for communication, so the use of cloud technologies in this area still carries a number of uncertainties.
• System outages that could severely impact company performance.
• Data security, especially in machine learning: who listens and analyzes conversations. Here we are talking not only about the protection of personal data, but also about commercial secrets.

See also

• A catalog of PaaS solutions and projects is available on TAdviser
• IaaS
• SaaS
• DPC
• Cloud computing
• PaaS - Platform As A Service
• BPaaS (Business Process as a Service) Business Platform as a Service
• PaaS (Russian market)
• PaaS (Global Market)
• SaaS, PaaS and IaaS: The risk level is very different
• Platforms as a service (PaaS) are waiting for a boom

Notes