The future of cloud communications is becoming increasingly clear, and it looks set to be driven by CPaaS, or Communications Platform as a Service. In fact, many early adopters are being proven out, with the IDC predicting the CPaaS market to grow from $4.2 billion in 2019 to $17.7 billion in 2024 and 451 Research forecasting the market to hit $21 billion in 2025. With that in mind, let’s quickly define CPaaS then look at both why it presents a path forward for cloud communications and why it should be at the top of your 2022 to do list.

Jargon has a tendency to be … well, jargony. So, a good way to think about CPaaS is that it is an api-driven platform that integrates real-time communications into business applications for a customized user experience. That’s it! The platform brings your real-time communications, like chat, telephony, presence, conferencing, onto the same platform as your business applications, such as a Client Relationship Manager (CRM) or Point of Sales (POS), for a more streamlined approach to business processes. 

Now that we know what it is, why is CPaaS at the forefront of innovation in cloud communications? CPaaS has solidified its position in the market because of its ability to address some of the unique challenges that service providers are currently facing. As we’ve hit on before, one of these primary challenges stems from the consistent mergers and acquisitions in the industry over the past 3-5 years. The results of this M&A activity is that there are a decreasing amount of solutions that are becoming increasingly more generic, making differentiation beyond price next to impossible.

While mergers and acquisitions present a problem internally to service providers, their customers have their own concerns. Every year, business processes get more complex, and the same unified communications features become less capable to address that growing complexity. Adding fuel to this fire is the fact that it has never been easier to buy and deploy third-party applications to meet that growing sophistication. The end result is a business utilizing a communications platform for their communications needs, but increasingly needing to reach outside that platform to myriad other applications to solve their pressing business concerns.

If these are the issues facing the industry today, how does CPaaS solve these problems? As we mentioned at the top, CPaaS is an API-driven platform, which means it is built from the ground up to connect with other software programs. So, as business needs grow more complex and business software continues to proliferate to address those needs, a CPaaS platform can serve as the central node in a business’s network of software. What’s more, because CPaaS brings communications services first and foremost, it can actually offer enhanced efficiencies to customers as they are able to glean a great deal of insight while communicating with customers by easily accessing the wealth of data that is collected and housed across several platforms. And, it is through this unification and integration component that CPaaS also addresses the concerns of service providers. By integrating into the apps and programs their customers are using every day, a service provider can create a customized product to bring to market that creates a clear differentiation.

So, in a nutshell, that’s what CPaaS is and why it is becoming increasingly more important in the industry these days. It’s important to note here that CPaaS is not exactly a direct replacement of UCaaS (Unified Communications as a Service). UCaaS works great for a lot of businesses whose needs are primarily internal communication and outbound calling--think internal team chats and outbound sales calls. CPaaS is really for the customer that needs services that are a bit more advanced and could really benefit from streamlining some business processes. 

What’s important is that CPaaS is what service providers need to be thinking about today. Because business processes are only increasing in complexity, there will only be more business apps and programs that your customers use. CPaaS is how you can position your offering as central to the daily work of your customers.