Research Vice President, Worldwide Telecommunications Research – IDC
The communications platform as a service (CPaaS) industry emerged from a turbulent 2020 in excellent shape, benefitting from an uptake in cloud communications driven by the need for critical digital communications and collaboration. While the industry is marked by the continued addition of new market entrants, many existing software companies are increasingly pivoting to the provision of application programing interface (API) platforms. As IDC had predicted earlier, the industry grew by over 30% YoY in 2020, to $5.9 billion, driven by outliers Twilio, which grew revenue by 55% during 2020, and Vonage, which grew its CPaaS segment at 35% during 2020.
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. They need an extensive network of developers and marketing outreach to enterprises. This all takes substantial operating costs. Start-ups and private companies will plough through tens of millions of dollars to scale and establish connectivity with network operators. Established companies must display credible QoS, onboarding, and support resources, as well as the ability to scale efficiently.
And with each additional year of successful growth, the industry is attracting attention and deep-pocketed competition that will be able to offer robust scale for enterprise customers. For example, Microsoft launched its Azure Communication platform in late 2020 and is poised to make an impact during 2021. Cisco is making its second foray into the CPaaS segment with imimobile, and other large entities, including network operators, have stepped into this segment. For example, AT&T and Lumen 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.
The CPaaS segment has progressed beyond the provision of a few voice and messaging APIs. 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.
The following is a list of key attributes for enterprises seeking a CPaaS provider:
This section briefly explains IDC’s key observations resulting in a vendor’s position in the IDC MarketScape. While every vendor is evaluated against each of the criteria outlined in the Appendix, the description here provides a summary of each vendor’s strengths and challenges.
Infobip is positioned in the Leaders category in the 2021 IDC MarketScape for the worldwide CPaaS market.
Infobip is one of the largest and highly diverse global CPaaS providers. The company offers a wide range of APIs, interconnection services for mobile network operators, and customer engagement SaaS for enterprises in a wide range of industries. Over the past decade, Infobip has evolved from a focus on messaging services to mobile operators to a full stack CPaaS offering customer engagement and solutions and communications APIs. Its November 2020 acquisition of OpenMarket adds a much-needed boost to its presence in North America.
Infobip’s key differentiator is its broad portfolio, global scale, and footprint. The platform is segmented into three main segments. Infobip offers a full suite of APIs, including voice, SMS, RCS, email, chat apps, and OTT messaging services. Its solutions portfolio includes conversations, contact center integration, and customer data integration. Its connectivity platform offers numbers, identity services to banks, and IoT connectivity. The company has a global presence with offices in over 60 countries on five continents and completes 14 billion transactions per month to over 190 countries. The company has a great reputation for reliability and solid round the clock support.
Infobip can be characterized as one of the most widely used CPaaS you never heard about. The company’s global platform is interconnected with over 600 mobile operators that also white label several of its solutions. As CPaaS becomes more competitive, Infobip will need to improve its visibility in key markets beyond its European home base. Its OpenMarket acquisition will provide a major boost.
Global scale and local regional support is a key requirement for your company. The company also provides a broad portfolio for enterprises and offers carrier-grade service that is a crucial foundation for many network operators to deliver global messaging services.
“Global scale and local regional support is a key requirement for your company. The company also provides a broad portfolio for enterprises and offers carrier-grade service that is a crucial foundation for many network operators to deliver global messaging services.“
IDC included cloud communication platforms with the following capabilities or characteristics:
For the purposes of this analysis, IDC divided potential key measures for success into two primary categories: capabilities and strategies.
Positioning on the y-axis reflects the vendor’s current capabilities and menu of services and how well aligned the vendor is to customer needs. The capabilities category focuses on the capabilities of the company and product today, here and now. Under this category, IDC analysts will look at how well a vendor is building/delivering capabilities that enable it to execute its chosen strategy in the market.
Positioning on the x-axis, or strategies axis, indicates how well the vendor’s future strategy aligns with what customers will require in three to five years. The strategies category focuses on high-level decisions and underlying assumptions about offerings, customer segments, and business and go-to-market plans for the next three to five years.
The size of the individual vendor markers in the IDC MarketScape represents the market share of each individual vendor within the specific market segment being assessed.
IDC MarketScape criteria selection, weightings, and vendor scores represent well-researched IDC judgment about the market and specific vendors. IDC analysts tailor the range of standard characteristics by which vendors are measured through structured discussions, surveys, and interviews with market leaders, participants, and end users. Market weightings are based on user interviews, buyer surveys, and the input of IDC experts in each market. IDC analysts base individual vendor scores, and ultimately vendor positions on the IDC MarketScape, on detailed surveys and interviews with the vendors, publicly available information, and end-user experiences to provide an accurate and consistent assessment of each vendor’s characteristics, behavior, and capability.
This IDC MarketScape assesses providers categorized as communications platform-as-a service (CPaaS) vendors. CPaaS facilitates cloud-based hosting and management of application programing interfaces (APIs). CPaaS providers offer communications APIs, which are routines, and tools that simplify the programming process required to create and implement real-time communications solutions. APIs can be embedded into enterprise applications, including mobile apps and web platforms, that enhance business process applications. CPaaS offers developers APIs in multiple coding languages that can work in the language of their choice (Node.js, Ruby, PHP, .NET, Java, Python, Perl, and ColdFusion), prototype in hours, and stand up a production run in days.
CPaaS allows developers to test/dev software in a cloud environment that can then be integrated in an on-premises environment. Usage is generally in the cloud model, with up-front hardware and software costs, no contracts or commitments, and no subscription fees. Payment is based on micro-billing tied to actual usage.