IDC Names Sizzling Twilio, Vonage Market Leaders in CPaaS

IDC says Twilio, Vonage, MessageBird, Sinch, Infobip and Bandwidth are market leaders in communications platform as a service (CPaaS). The research firm just released its worldwide 2021 assessment of  CPaaS vendors.

The CPaaS industry emerged from a turbulent 2020 in excellent shape, the company said. CPaaS vendors benefitted from an uptick in cloud communications driven by the need for critical digital communications and collaboration.

IDC calls 8×8, AT&T, Avaya, IntelePeer, Alcatel-Lucent Enterprise and Microsoft, “major players,” a tick below “market leaders.”

Strong Growth in 2020

The industry grew by more than 30% in 2020, to $5.9 billion, according to IDC. It was driven by outliers Twilio, which grew revenue by 55% last year, and Vonage, which grew its CPaaS segment by 35%.

IDC’s Courtney Munroe

“With the strength of the Vonage Communications Platform, Vonage is well positioned to provide businesses undergoing digital transformation with intelligent, reliable and scalable regional or global customer engagement solutions,” said Courtney Munroe, IDC’s vice president of worldwide telecommunications research.

Despite the hype and excitement generated by the rapidly growing CPaaS segment, new entrants standing up and hosting a few SMS and voice APIs do not guarantee automatic success. CPaaS platforms require deep internetworking with carriers, and distributed intellectual property (IP) and cloud assets to deliver quality voice calls and messages.

Furthermore, they need an extensive network of developers and marketing outreach to enterprises. This all takes substantial operating costs.

The industry is attracting attention and competition with deep pockets, IDC said. Microsoft launched its Azure Communication platform in late 2020, so look for it to make an impact during 2021. And Cisco is making its second foray into the CPaaS segment with IMImobile.

Furthermore, other large entities, including network operators, have stepped into this segment. For example, AT&T and Lumen Technologies have established their own CPaaS platforms, while other major carriers leverage various CPaaS companies. These companies will be formidable competitors in the enterprise space over the next few years.

CPaaS Progressing

CPaaS has progressed beyond the provision of a few voice and messaging APIs, IDC said. Developers and enterprises demand a high level of reliability for phone numbers and messaging delivery, as well as vertical use-case templates, and tools for rapid onboarding and deployment.

IDC provides the following key attributes for enterprises seeking a CPaaS provider: carrier-grade network infrastructure; demonstrable use cases; software integrations; and ancillary services.