The CF List: 20 CPaaS Providers You Should Know
8x8 is here. So are Vonage and Avaya. See who else made our list and why.
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S&P Global’s Raul Castanon, and Frost and Sullivan’s Michael Brandenburg cited Twilio as a major CPaaS player.
“Twilio goes without saying,” Brandenburg said. “Even if they weren’t the first, they created this space. They had the vision and it’s paying off tremendously for them right now. They’re solving problems and solving use cases.”
Castanon said Twilio is among vendors that has expanded in the past five years to become one of the three leading global CPaaS vendors in terms of size, as well as product innovation.
Brandenburg and Castanon said 8×8 is a major CPaaS player. Brandenburg said 8×8’s investments are paying off and it has “jumped leaps and bounds” from its acquisitions. Last month, 8×8 announced its acquisition of rival Fuze for about $250 million in cash and stock. The move will expand 8×8’s global reach.
“They’re being thoughtful about those integrations,” Brandenburg said. “They’re one that was always interesting.”
Brandenburg said RingCentral is a top contender. In November, RingCentral announced a strategic partnership with Mitel. The new strategic partnership will provide Mitel’s global customer base with a migration path to RingCentral’s Message Video Phone (MVP). That’s RingCentral’s cloud phone system.
“They API-enable their RingCentral customers with new capabilities and I think they’re going to do really well with that just as an extension of their success in the UCaaS market,” he said.
Brandenburg said Vonage early on introduced the idea of a single platform that includes voice, video, messaging and APIs. Growthwise, Vonage performed better on APIs and video than on UCaaS last year.
“Those investments are paying off,” he said.
Ericsson is acquiring Vonage in a deal worth $6.2 billion.
“The acquisition of Vonage by Ericsson could have a significant impact, opening the door for service providers to benefit from the growing CPaaS opportunity,” Castanon said.
Castanon said IntelePeer is a top CPaaS contender. Last month, IntelePeer launched its new Atmosphere Marketplace, which offers customers a suite of prebuilt communication applications.
The Atmosphere Marketplace offers no-code and low-code communication applications. It simplifies the rapid deployment of communication solutions. It also eliminates the need for developers to build from scratch.
Castanon said Sinch is among vendors that has expanded in the past five years to become one of the three leading global CPaaS vendors in terms of size, as well as product innovation. And Brandenburg said Sinch stands out among more European-focused providers.
Last month, Since completed its acquisition of Inteliquent. The acquisition positions Sinch as the largest independent provider of voice services to both enterprises and telecom carriers in the United States. The Inteliquent platform handles more than 300 billion minutes of voice calling per year and the company has registered more than 115 million active phone numbers on behalf of its customers.
Brandenburg said Microsoft is among the top CPaaS providers. Microsoft’s Azure Communication Services is a set of communication APIs, video APIs and short message APIs for deploying applications across any device and on any platform.
“Low-code development tools will be table stakes in the contact center,” said Forrester’s Art Schoeller. “The different paths of configuring capabilities versus writing custom code that leverages APIs will converge with the advent of low-code development tools. Legacy interactive voice response (IVR) graphical development tools have already evolved to orchestrate cross-channel customer journeys. Some vendors have acquired low-code integration tools. This development will reduce the need for lower-level programming skills and enable more citizen developers to enhance contact centers.”
Brandenburg and Castanon cited Cisco among leading CPaaS players.
“Cisco is rapidly evolving its CPaaS offering with its acquisition of IMImobile, integrating it into its larger Webex customer engagement offering,” Castanon said.
Castanon said Infobip is among vendors that has expanded in the past five years to become one of the three leading global CPaaS vendors in terms of size, as well as product innovation.
In November, Infobip announced its acquisition of Peerless Network, marking its fourth acquisition in under a year. The deal extends Infobip’s voice presence in the United States and makes its suite of CPaaS products available to Peerless customers.
Miguel Turnbull, director of partner development at Infobip, talked about the deal at our recent Channel Partners Conference and Expo.
Castanon cited NetSfere as a noteworthy CPaaS contender.
“NetSfere recently unveiled its CPaaS offering, and given its trajectory in mobile messaging and secure encrypted communications, could position itself as a differentiated offering targeting vertical use cases in finance and health care,” he said.
Brandenburg and Castanon said Soprano Design is a strong CPaaS player. Castanon said it comes with a long trajectory in mobile messaging and is particularly strong with service providers.
“Soprano Design has been around for awhile, but they’ve always been in a partner mode, so nobody really knew who they were,” Brandenburg said. “They’re extending their model into enterprises and other partners. That’s where they’re finding their own brand identity.”
Castanon said Plivo has built a strong reputation as a CPaaS pioneer.
“Its impressive client roster shows that this reputation is well-founded,” he said. “It recently unveiled Contacto, an omnichannel customer service platform, showing how it is expanding beyond its initial developer-focused approach toward a more comprehensive strategy that includes SaaS offerings.”
Brandenburg and Castanon cited Alcatel Lucent Enterprise (ALE) as a CPaaS contender.
“Moving forward, competition will intensify for vendors,” Castanon said. “It will be key for them to prove how well they are able to move beyond traditional use cases – i.e., push notifications – to use cases with more complex requirements that involve security and compliance, conversational capabilities and mobile payments, to name a few.”
Brandenburg said Bandwidth stands out among more Europe-focused providers. In November, Bandwidth announced continued strong momentum in health care as the company powers the telehealth digital communications transformation from large enterprises to app developers.
Avaya is doing well for a company that “everybody thought would just go away,” Brandenburg said.
“It’s such a transition going from on-premises PBX to CPaaS-enabled platforms,” he said. “Obviously their on-premises business is still not doing great, but they’re still selling phones and they’re selling solutions. I’ve got to give them kudos. They pivoted to include APIs and cloud platforms early. They followed the right resources to enable it and just have done really well with it.”
Castanon cited MessageBird as a noteworthy CPaaS provider. Last spring, the Dutch startup said it raised a total of $1 billion in a funding round. In addition, it acquired commercial email platform SparkPost in a $600 million deal. MessageBird said the acquisition would help expand its presence in the United States, Twilio’s home market.
Castanon said Kaleyra has evolved into a leading global CPaaS vendor through a combination of strategic acquisitions and organic growth. It is particularly well-positioned with banking and financial organizations.
Last summer, Kaleyra acquired mGage, a global mobile messaging provider, for $215 million in cash and Kaleyra common stock. The combination expands Kaleyra’s R&D footprint and strengthens its messaging portfolio with Google RCS/RBM while also beefing up its enterprise communication analytics and omnichannel engagement services.
Castanon cited Nylas as a noteworthy CPaaS player. Nylas recently expanded its offering to encompass omnichannel calendar integration, he said. In addition, it’s particularly well positioned to address workforce productivity use cases.
In November, Nylas announced that one of Europe and the world’s leading e-commerce platforms selected it to connect real-time communications data into their application.
Castanon cited Gupshup as a top CPaaS contender. The company raised $340 million in the past year.
“Given its long trajectory with conversational messaging and its recent acquisition of RCS specialist Dotgo, it’s well positioned to make a dent in the market in 2022,” he said.
Castanon said Clickatell has developed unique capabilities with mobile payments and omnichannel customer engagement. This positions the company to address key requirements for conversational commerce.
Last month, Clickatell announced record-level growth in 2021 in chat commerce. Driving Clickatell’s continuous momentum is the growing market demand for its chat commerce platform.
Castanon said Clickatell has developed unique capabilities with mobile payments and omnichannel customer engagement. This positions the company to address key requirements for conversational commerce.
Last month, Clickatell announced record-level growth in 2021 in chat commerce. Driving Clickatell’s continuous momentum is the growing market demand for its chat commerce platform.
COVID-19 accelerated the digitization of customer and employee experiences, therefore boosting business for communications platform-as-a-service (CPaaS) providers.
A number of services can be considered part of CPaaS platforms. Those include messaging technologies such as texting, rich communication services (RCS) and over-the-top (OTT) messaging applications. Many CPaaS offers also include push notifications, voice services and email.
Our latest CF List focuses on CPaaS providers. Analysts shared their views on what it takes to succeed with the technology. It includes an updated list and fresh views on changes in the competitive landscape.
Rising Customer Expectations
Raul Castanon is senior research analyst with 451 Research, part of S&P Global Market Intelligence.
451 Research’s Raul Castanon
“According to 451 Research’s CPaaS Market Monitor, [the pandemic] resulted in total market revenue increasing by 48% in 2020,” he said. “This in turn gave CPaaS more visibility across the entire value chain — including enterprises, service providers and channel partners. These factors are influencing market requirements, raising customer expectations in terms of how well CPaaS vendors are able to address their requirements. For instance, enterprises will be looking for more vertical-driven support, while channel partners and service providers will be looking for vendors that understand how this translates into business opportunities for them.”
Michael Brandenburg is industry analyst at Frost and Sullivan. He said the pandemic accelerated the natural progression to CPaaS.
“Anytime someone says in organizations that they’re going through a digital transformation. APIs and communications are going to get rebooted in that process,” he said. “The pandemic and work from home, and pivoting to a lot of digital workflows is driving interest in CPaaS. And that’s something that I think it’s going to be very sticky. It’s not something like, ‘OK, the pandemic is over. I guess we can turn down curbside pickup.’ We’re creating all new use cases and workflows, and that’s going to be very persistent. On the provider side, there’s been a lot of recognition of that and adjusting road maps to make sure they are part of that on supply side. But the demand side was always going to be there, it just stepped up.”
2 Types of CPaaS Adoption
There are two modes of CPaaS adoption, Brandenburg said. The first is the quick “we need to solve this now.” Those solutions are quick and agile.
Frost and Sullivan’s Michael Brandenburg
“In most of those cases, you could just grab a phone number and start using it,” he said. “Where I think things become more strategic is when we start thinking about how channels fit into omnichannel, and how do we use our telephone numbers as business assets and how do we assign CPaaS functions to our business numbers? There’s not one true fit.”
Art Schoeller is vice president and principle analyst at Forrester.
“CPaaS and CCaaS will blend for customer service,” he said. “CPaaS vendors like Twilio that offer capabilities via APIs will continue to move up market. They will add more fully featured, packaged apps for contact centers, as well as lower-level APIs to support customizations. In parallel, the CCaaS vendors that focus on packaged apps.”
More customization will come from prebuilt componentry, Schoeller said.
Forrester’s Art Schoeller
“Growing libraries of prebuilt modules and models will help service a range of vertical needs, such as prebuilt intent models for natural language endeavors that use conversational artificial intelligence (AI), desktop widgets for agent guidance, integrations with new channels and sensors like IoT and augmented/virtual reality, as well as more extensive libraries of low-code components,” he said.
Massive Revenue Growth Expected
CPaaS revenue generated in North America will reach $15 billion by 2026, according Juniper Research. That’s up from $3.7 billion in 2021.
Based on feedback from analysts and recent news reports, we’ve compiled a list, in no particular order, of 20 CPaaS providers that are making the most of the competitive landscape and charting success. The list offers a mix of well-known providers as well as lesser-known companies that are making big strides in CPaaS. This is by no means a complete list.
Scroll through our slideshow above to see who made the cut this year.
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