The COVID-19 pandemic instigated significant shifts in a wide variety of sectors. Many industries saw the pandemic expedite technological advancements in their field, changing how both businesses operate and customers operate and behave. In the new normal, companies must offer their customers a smooth digital experience, and it holds almost as much weight as the quality of the product or service offering. Organisations that don’t prioritise modernisation risk being overshadowed by tech-savvy competitors who can offer customers a seamless digital experience.
The rise of cloud computing
One of the most disruptive technologies over the last decade is cloud computing. However, cloud ‘as-a-service’ platforms revealed their true value in 2020. Cloud computing has become an essential component of the digital ecosystem, and the market is forecast to have a value of $411.7 billion by 2024. In particular, Communications Platform-as-a-Service (CPaaS) is growing in its influence within the cloud space.
What is CPaaS?
Communications Platform-as-a-Service (CPaaS) is a platform for businesses to combine various communication services with their own customer applications. Combined and integrated through application programming interfaces (APIs), this can become a powerful customer engagement engine. Companies of all sizes use CPaaS to enrich customer experience through communication channels in an affordable, customisable way. With CPaaS, developers can create applications and workflows which can be personalised to the needs of a business. SMS, voice and video capabilities are embedded in existing customer-facing applications such as calendars, directories and CRM systems to ensure better communication and information retrieval.
CPaaS organisations found a gap in the market: many companies do not want to part with their existing business platforms. Modern businesses operate efficiently due to sales software, CRMs and collaboration platforms; switching to an entirely new platform would be a huge undertaking. CPaaS effectively allows smaller businesses to compete with larger organisations by keeping up with shifting technological advancements and providing the ability to build and adopt a mix of platforms that improve the digital customer experience of their target customers.
How do businesses use CPaaS?
The COVID-19 pandemic instigated not only a technological shift but also a customer experience shift. However, when it comes to CPaaS, the two come hand-in-hand. Thanks to technological innovation, customers are keen to stay connected to their favourite brands. The new digitally connected customer wants everything at their fingertips. They can purchase goods and services through smartphones, laptops and tablets, but they also want to communicate with companies digitally.
As a result, businesses must be both reactive and proactive when it comes to customer communications. CPaaS allows organisations to improve customer experience by sending customers in their current CRM systems app reminders, two-factor authentication, options for bill payments, general account management and more without changing their base applications.
How has demand for CPaaS changed over time?
Pre-pandemic, demand for the platforms was very steadily rising as more businesses realised the value of cloud platforms. This all changed rapidly once COVID-19 was classified as a pandemic in March 2020, when growth suddenly accelerated. While demand for CPaaS has experienced consistent double-digit growth over time, the pandemic instigated a substantial 60% growth increase over 12 months.
WhatsApp, the multiplatform messaging app which was acquired by Facebook in 2014, recently made headlines for its controversial change to its terms of service. The platform is changing the way users talk to businesses on the platform. WhatsApp users will be able to message businesses to ask questions, make purchases, and receive information. However, these conversations may be used on Facebook for advertising purposes. Controversially, users that do not agree to the new terms of service will gradually lose access to key account features if they do not accept the terms.
The update provides businesses with the option to use secure hosting services from Facebook to manage WhatsApp conversations with their customers. This function will undoubtedly come in useful for small businesses, who may not be able to financially justify integrating CPaaS platforms such as Twilio and RingCentral.
Which brands dominate the CPaaS market?
In the first quarter of 2021, three brands dominated the CPaaS market. Twilio and RingCentral are the key players. onefourzero investigated search demand data for the two companies, as it provides a clear benchmark for the brands’ market share.
From May 2020 to April 2021, CPaaS company Twilio received branded 7,389,990 searches. Twilio’s mission is to ‘democratise communications channels like voice, text, chat, video and email by virtualising the world’s communications infrastructure through APIs’. The company aims to reinvent how enterprises engage with their customers in an increasingly digital-first environment. Pivotally Twilio has the support of several high profile investors such as Amazon and Salesforce Ventures.
Twilio partners with Syniverse
The coronavirus pandemic was a pivotal moment for Twilio; search demand for the company increased by 45.8% from May 2020 to April 2021. In March 2021, Twilio expanded its ecosystem by becoming a minority owner of Syniverse, which provides messaging and roaming communication services to mobile operators.
Syniverse recently announced the launch of its CPaaS Concierge to help more traditional enterprises transform and elevate the mobile engagement experience with their customers. Jeff Bak, Vice President, Product Management at Syniverse, explained that “the COVID-19 pandemic has been a wake-up call for global 2000 companies” who have realised the “critical importance of their mobile relationship with their customers”.
RingCentral received 7,258,980 branded searches from May 2020 to April 2021, an increase of 19.5% compared to the previous year. In terms of site traffic, RingCentral saw 46.4% growth over the last 12 months, establishing itself as the market-leading CPaaS provider globally.
CPaaS & UCaaS: A match made in heaven?
UCaaS and CPaaS are different cloud delivery models. UCaaS falls under the category of Software as a Service (SaaS), while CPaaS falls under the category of Platform as a Service (PaaS). Like other PaaS, CPaaS requires additional customisation, implementation, and modification.
In simple terms, CPaaS is a cloud-based platform that IT teams can customize with their own features, usually in the form of SDK and API integrations for empowering communication strategies. In the past, implementing APIs was a complicated process. Today, CPaaS is becoming more accessible with new technology making it easier to create and implement APIs.
This gives organisations greater flexibility, as they can personalise their communications stack to meet their unique business or security needs and integrate more advanced features at will. Whilst CPaaS can enhance digital engagement, businesses can’t efficiently support a customer if they don’t have the right collaboration tools inside of the company. This is where a UCaaS platform can come in.
UCaaS and CPaaS: New dynamic communications
Combining CPaaS and UCaaS clearly benefits businesses. While UCaaS connects people inside or outside of a company, with the implementation of CPaaS, companies can connect people with applications, services, and processes. For example, people can connect to calendars and directories to access useful information and context as they interact with others. With a deeper dive into CPaaS, bots can be added to create automated answers for customers. It can also connect objects (IoT) that can trigger alert to the right person, as well as be monitored, use artificial intelligence (AI) based on advanced analytic patterns, and go beyond what used to be possible with just unified communications.
CPaaS, UCaaS and AI: a glimpse of what’s to come?
RingCentral has recently acquired SeerNet Technologies, which operates DeepAffects, a conversational intelligence company that uses AI to analyse business conversations. A RingCentral press release explained that the acquisition ‘is part of RingCentral’s rapid innovation to create smarter video meetings’. The acquisition will enable the company to deliver ‘enhanced pre-meeting, in-meeting and post-meeting experiences for customers.
The DeepAffects platform has some genuinely innovative features that can transform customer relations if the technology becomes mainstream. Artificial intelligence can recognise core emotions and sentiments from voice and identify individuals based on their unique vocal characteristics. Additionally, the DeepAffects AI can also convert audio to text using neural network models that can transcribe non-native English speakers’ audio with high accuracy.
The future of CPaaS
Commentators believe that CPaaS has a very bright future. The platforms create a whole new world for businesses of all sizes. However, CPaaS platforms are particularly transformative for small businesses which endeavour to minimise costs without endangering positive customer experiences. Firms and investors alike appear to have faith in CPaaS: research by Sinch and Juniper Research found that CPaaS spending is forecast to reach $6.7 billion in 2022.
Additionally, technological advancements will only work to boost the importance of CPaaS. Artificial intelligence is the perfect example. As AI becomes more sophisticated and communicates in a more human way, CPaaS platforms could introduce automated self-service. These developments will greatly aid businesses whose aim is to improve the digital customer experience.
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