Communication Platform as a Service Market by Component (Solutions (Message, Voice, Video) and Services (Professional and Managed)), Organization Size (SMEs and Large Enterprises), Vertical and Region - Global Forecast to 2027
The global communication platform as a service (CPaaS) market size is projected to reach USD 45.3 billion by 2027, at a CAGR of 29.4% during the forecast period. The cost effectiveness of CPaaS solutions is one of the primary factors driving the market growth. Moreover, large enterprises entering the market is driving the adoption of CPaaS solutions.
CPaaS Market Dynamics
Driver: Demand for improved customer service and client engagement
Today, most organizations are customer-centric and looking for solutions that better suit customer service. The emergence of CPaaS solutions and services has overcome the drawbacks of traditional systems. Many organizations utilize CPaaS to send customer messages including appointment confirmations and reminders, purchase confirmations, and order tracking. CPaaS Solutions such as chatbots can be used to fulfill customer requests. Furthermore, enterprises demand ease of access to omnichannel service providers with a single integrated API. Therefore, enterprises are adopting to CPaaS solutions to offer enhanced customer service.
Restraint: Security concerns over public cloud
There are many benefits of the public cloud, but there are several concerns over its security that need to be considered by organizations before adopting it. The public cloud is a multi-tenant environment. Due to this, security threats are always there; multitenancy may allow a hacker to view the data or assume the identity of another client to access the data. Furthermore, organizations are well-aware of the compliance regulations that need to be followed. Hence, security concerns related to the public cloud are expected to act as a restraint in the communication platform as a service (CPaaS) market as the majority of CPaaS solutions are deployed on the public cloud.
Opportunity: New channels to transform digital transformation
The new and emerging channels such as Rich Communication Services (RCS) and social media messaging provide vast new opportunities for digital communication. While standard SMS is limited to 160 characters in black and white, the new OTT channels have introduced full rich media experiences including images, videos, group chats, and interactions that smartphone users now take for granted in their person-to-person (P2P) communication with friends and family. This has led to the increasing adoption of CPaaS solutions to manage the complexity and facilitate the opportunities these new technologies present.
Challenge: Security limitations and weakness issues
While CPaaS APIs have given developers tools to integrate real-time communication, such as voice and video communication, into their apps without building interfaces and backend infrastructure, it comes at the cost of decision-making power over API security. The potential for communication platform as a service data breaches not only applies to data in motion such as in the case of real-time voice and video communication, but also to data at rest such as data stored in services at the edge of the network. Without strong security controls, CPaaS companies are vulnerable to fraud attacks.
CPaaS Market Ecosystem
By component, the services segment to grow at a higher CAGR during the forecast period
By component, the services segment is expected to grow at a higher CAGR during the forecast period. The services segment has been broadly classified into professional and managed services. The Professional services are further classified into implementation & integration, training & consulting, and support & maintenance. On the other hand, managed services are the services offered by the third-party provider to manage the additional and operational challenges of the enterprise.
By services, the professional services subsegment is expected to account for the largest market size during the forecast period
The professional services subsegment is expected to account for the largest market share among services. The training & consulting services enable the enterprises to choose the best possible solutions and services depending on the company size, requirement, usage, and many more. Support & maintenance services provide the enterprises with technical support, customer support, and backup support to ensure uninterrupted operational activities. With the higher adoption of CPaaS solutions across the industry verticals, the demand for supporting services is also increasing among organizations.
By region, Asia Pacific is expected to record the highest growth during the forecast period
The growth of the market in this region is driven by the rising adoption of cloud and mobility trends in countries such as China, India, and Japan. Government initiatives to promote the digital infrastructure are also driving the adoption of CPaaS solutions in the region. The rapid increase in the adoption of these solutions in the Asia Pacific has made it highly lucrative and one of the fastest-growing markets globally. The increasing demand for converged communication and product differentiation among the service providers are the key factors driving the growth of the communication platform as a service market in this region. The competition in this region is fragmented and the service providers are looking at expanding the base of services to most of the countries in the region as a result of improvements in infrastructure and other business strategy moves. The industries in Asia Pacific demand for a high level of quality, service, uptime, and security related to the CPaaS solutions and services.
Key Market Players
The report includes the study of key players offering CPaaS solutions and services. The major vendors in the market include Twilio (US), Sinch (Sweden), Avaya (US), Vonage (US), Bandwidth (US), RingCentral (US), TeleSign (US), Infobip (UK), CM.com (Netherlands), and 8x8 (US).
The study includes an in-depth competitive analysis of these key players in the CPaaS market, including their company profiles and strategies undertaken.
Scope of the Report
|Market size available for years||2018-2027|
|Base year considered||2021|
|Forecast units||Value (USD Million/Billion)|
|Segments covered||By Component, Organization Size, Vertical, and Region|
|Regions covered||North America, Europe, Asia Pacific, Middle East & Africa, and Latin America|
|Companies covered||Major vendors include Twilio (US), Sinch (Sweden), Avaya (US), Vonage (US), and Bandwidth (US)|
This research report categorizes the communication platform as a service market to forecast revenues and analyze trends in each of the following subsegments:
- Short Message Services (SMS)
- Multimedia Message Services (MMS)
- Social Channels (WhatsApp, Facebook Messenger, WeChat, and others)
- Rich Communication Services (RCS)
- Outbound & Inbound Voice Calls
- Interactive Voice Response (IVR) Calls
- Voice Over Internet Protocol (VoIP)
- SIP Trunking Services
- WebRTC-based Calling
- Video Calling
- Video Conferencing
- WebRTC-based Video
- Other Solutions
- Reporting & Analytics
- Managed Services
- Professional Services
- Implementation & Integration
- Training & Consulting
- Support & Maintenance
By Organization Size:
- Large Enterprises
- Small and Medium-sized Enterprises (SMEs)
- Banking, Financial Services, and Insurance (BFSI)
- Retail & eCommerce
- IT & Telecom
- Other Verticals
- North America
- United States
- United Kingdom
- Rest of Europe
- Asia Pacific
- Rest of Asia Pacific
- Middle East & Africa
- United Arab Emirates
- Kingdom of Saudi Arabia
- Rest of Middle East & Africa
- Latin America
- Rest of Latin America
- In October 2022, Sinch added the KakaoTalk channel to its Conversation API, which enables omnichannel interaction with customers around the world. This helped businesses to interact with customers in South Korea without worrying about deciphering Korean documents.
- In September 2022, Vonage launched AI Studio, a low code/no code tool to design, create, and deploy customer engagement solutions that operate in natural language using AI. Vonage AI Studio helps businesses elevate customer engagement through personalized and automated interactions across channels, such as voice, SMS, and messaging apps, such as WhatsApp.
- In June 2022, Bandwidth partnered with Alianza to accelerate cloud migration for communication service providers (CSPs). Bandwidth's network platform and APIs, along with Alianza's full-stack CSP platform, will enable CSPs to transform their legacy infrastructure and remain competitive by offering high-growth, cloud-based voice, messaging and videoconferencing services.
- In May 2022, Twilio partnered with Syniverse to drive innovation and accelerate seamless connectivity and engagement. Twilio invested USD 750 million in Syniverse for a minority ownership stake to strengthen its position in the communication platform as a service market.
- In February 2022, Airtel Africa signed a memorandum of understanding (MoU) with Avaya to deliver effortless customer experiences across the continent. As per the agreement, Airtel Africa would bundle Airtel Africa voice services with the Avaya OneCloud platform, which includes Avaya OneCloud CCaaS, OneCloud UCaaS and OneCloud CPaaS.