CPaaS enablement and the market opportunity for telcos, communication service providers

Introduction

Communications PaaS (CPaaS) — a segment comprising vendors that provide APIs, software-development kits, and libraries intended to allow developers to integrate voice, video, chat and messaging communications into their web and mobile applications — could grow at a CAGR of 21% through 2026, according to 451 Research's CPaaS Market Monitor 2023. Despite macroeconomic headwinds, this segment will likely continue to drive the digital economy, supporting ongoing digital transformation initiatives for large organizations and, increasingly, SMEs.

Here, we provide an overview of CPaaS enablement and profile 15 vendors focused on helping telcos and CSPs address this opportunity with a platform-based approach.

The Take

The competitive landscape for programmable communications is largely defined by how CSPs, cloud infrastructure providers and CPaaS vendors choose to position themselves in the value chain. We expect vendors across these three groups would continue to work in tandem, enabling access to global communication networks for developers and large organizations. However, CSPs and cloud infrastructure providers seem well positioned to address the growing demand for embedded, real-time communications from SMEs — this represents an important opportunity that could enable telcos to monetize their network infrastructure investments.

CPaaS ecosystem

CPaaS initially emerged with developer-focused platforms providing access to the public switched telephone network (PSTN) and cloud-based services, enabling them to embed real-time communications in their applications. While CSPs and cloud infrastructure providers have largely remained behind the scenes, these players are increasingly stepping to the forefront, partnering with CPaaS enablement providers to launch API-based services. Examples of the latter include Amazon Web Services (AWS) and Microsoft Corp., two cloud hyperscalers that, given their size and global reach, could significantly affect the competitive landscape (see Figure 1 below). At re:Invent 2019, AWS announced the general availability of its Amazon Chime SDK, which allows customers to embed audio calling, video calling and screen-sharing capabilities into their own applications without the need to deploy, monitor and scale real-time infrastructure. At Ignite 2020, Microsoft launched Azure Communication Services (ACS), a set of cloud-based capabilities aimed at enabling developers to add real-time communication services to their web and mobile applications.

Similarly, CSPs are also stepping to the forefront, with some players looking to provide communication API-based services directly to enterprises and SMEs. Examples include tier 1 telcos such as AT&T Inc. (U.S.), KPN NV (Netherlands) and Proximus Group PLC (Belgium), which have launched CPaaS initiatives in partnership with CPaaS enablement vendors including Braidio, Kandy and Soprano Design. Another key player is the United Arab Emirates' telco services provider Etisalat Group, which in February 2022 launched a new brand identity called e& and announced the establishment of its consumer digital and enterprise digital business units.

Figure 1: Evolution of Programmable Communications, 1998-2022

Source: 451 Research, Communications Platform as a Service Market Map 2023

CPaaS enablement vendor landscape

Our Communications Platform as a Service Market Map 2023 defines CPaaS enablement as a category comprising CPaaS technology vendors whose go-to-market strategy is based on partnering with CSPs, enabling them to deliver programmable, real-time person-to-person (P2P) and application-to-person (A2P) communication services, leveraging their own core infrastructure.

Below, we profile 15 technology vendors focused on CPaaS enablement. While the vendor list is representative of the market, it is not meant to be exhaustive. The inclusion of vendors is intended solely to exemplify this category and does not imply that they are identified as market leaders. A more comprehensive list of vendors, including additional categories within the CPaaS space, is included in our CPaaS Market Map 2023 and our CPaaS Market Monitor reports.

Highlights:

• The CPaaS enablement category includes a wide range of players, from technology firms well entrenched in the telco space — such as Ericsson and Mavenir — to emerging players such as Braidio, Enabld, EnableX and Wazo.
• While some companies have a long trajectory as technology vendors for telcos and CSPs, until recently this category comprised a small number of vendors.
• The landscape is rapidly evolving, with new players entering the space in recent years. In addition to the aforementioned players, these include Radisys, which launched its Engage Digital Platform (EDP) in early 2022.
• This category includes vendors with go-to-market strategies based exclusively on partnering with CSPs, such as Kandy and Mavenir — which acquired CPaaS enablement platform Telestax in August 2021.
• The category also includes vendors with a go-to-market approach comprising CPaaS enablement in addition to the developer and enterprise segments — such as 2600Hz, Infobip, Sinch, Soprano Design and Wazo.
  
  

Figure 2: CPaaS Enablement Vendor Landscape

Source: 451 Research