CPaaS: The ultimate guide to maximizing value for your business

Thinking about adopting CPaaS (communication platform as a service)? Or are you sold already and just looking to build a business case that demonstrates the practical benefits for your own organization?

In this blog we cover everything you need to be aware of – including both the strengths and weaknesses of the approach, which use cases it is ideally suited to, and some which it is not.

Most importantly we describe how the business communication landscape is currently undergoing a rapid transformation and what you need to know to ensure that decisions about your communication strategy are future proof.

You have undoubtably noticed that brands want to talk to us more and more. The era of personalization seems to have morphed into the epoch of conversational everything. You have to admit that it is quite handy to be able to interact with a business any time of the day or night, get queries answered immediately, and even make purchases without even having to leave the channel that you are interacting on. And it doesn’t even matter which channel that is and whether you are talking to a human or a chatbot, businesses are able to support your intentions on any channel because they are all connected to the same underlying customer data platform (CDP).

This is the beauty of CPaaS – total flexibility in adopting and customizing communication to suit the strategy, goals, and brand personality of a business. Not only can you orchestrate conversations that leave a positive impression on your customers, but you can also use the best channel for any given scenario – to achieve maximum impact or optimize costs.

And don’t think personalization has been abandoned – it is now interwoven into every brand interaction because every conversation on every channel can be orchestrated for the individual. Crucially, any important data learned can be retained in the person’s profile so that it can be ‘remembered’ the next time they get in touch – even if it on a completely different channel or they are in a different part of the world.

That is another differentiator for CPaaS – being a cloud-based technology it transcends national borders and enables brands to offer the same type and quality of service to a globally mobile customer base. A bit like that McDonalds quarter pounder that looks and tastes exactly the same whether you are in Pittsburgh or Paris – although as the film Pulp Fiction informed us, it might have a slightly different name.

In many cases a company will adopt CPaaS incrementally. For example, they might partner with a provider to satisfy a single use case on a single channel – for example to send 2FA authentication messages by SMS. This might expand to other SMS use cases, and then as the business sees the cost and efficiency benefits of having a specialist handle the delivery and associated infrastructure, then they may look to extend this to other communication channels, and even adopt new ones over time.

In some ways this is a good approach as the communication solution can mature organically as the business adapts to the new paradigm. However, it can be wasteful with duplicated technology and supporting staff, and an inconsistent experience for end customers who might wonder how that 2FA message always gets delivered within 5 seconds by SMS no matter where in the world they are, but they can’t get reliably informed when their order has been delayed.

For some organizations a ‘big bang’ transition to CPaaS for all their communication requirements will be more effective and simpler.

No matter what a business’ journey to CPaaS adoption looks like, it is always a good idea to partner with a CPaaS provider that can offer both strategic advice and practical support with everything from client onboarding, to configuring failover channels, to dealing with local compliance legislation.  

Most importantly they enable you to be flexible in the channels that you adopt – let them do the hard work building and perfecting solutions with new technology, ChatGPT being a recent example, and then use those solutions yourself in the way that provides you and your own customers with the most value.

Not every business is the same and there may be some instances where the CPaaS model is not appropriate. Here are just a few examples of CPaaS challenges that you should be aware of.

Legislative restrictions: There may be some use cases where the cloud communication model is simply not an option. For example, some governmental departments or businesses that deal with sensitive data might stipulate that data cannot be processed in the cloud or moved out of a specific geographic area.

Legacy systems: Some organizations may be dependent on older technology or software that is not compatible with modern CPaaS solutions. This does not rule it out completely, but additional development would be required to build an intermediary layer between the legacy applications and the CPaaS APIs.

Organizations in this situation would be well advised to address this dependency as not only are they missing out on the opportunities that CPaaS provides, but they are also more exposed to new security threats and will find it increasingly difficult to find staff that are trained to develop and support the older technology.  

Niche requirements: CPaaS is ideal for businesses that use popular communication channels like SMS, email, voice, and messaging apps like WhatsApp. However, if your organization has very specialized communication requirements then CPaaS may not be suitable – for example, some industry sectors like mining, shipping, and law enforcement may rely heavily on satellite communication devices or even wireless two-way radios.

Luckily the majority of organizations would benefit from adopting a CPaaS model for their communication requirements. This applies to small businesses that might want to add one or two channels, for example a chatbot or video call option, right up to platform companies that provide the full range of communication services to their own customers.

Let’s have a closer look at some of these benefits and how to leverage them effectively.

When building a use-case for CPaaS you should focus on the practical advantages rather than the intangibles. Here are just a few areas where CPaaS can add obvious and immediate value.

By partnering with a CPaaS provider that covers multiple channels in a single platform you get instant access to all the communication methods that your customers use without having to develop them from scratch. This removes the start-up costs and the time and expense of building up the domain knowledge within your organization to manage and support them.

Your existing staff get to concentrate on your core business, and you get reduced and predictable costs for your communication use cases with no need to purchase any hardware or manage the infrastructure. What’s more, all resource allocation and failover configuration are taken care of.

With a traditional on-premise communication solution, the hardware and infrastructure has to be of sufficient specification to deal with the highest demand peaks of the year and will be underutilized for the rest of the time. For example, in the retail sector there is an extreme peak in messaging before Black Friday and the holiday season as businesses publicize their offers before the busiest shopping period.

With a CPaaS provider that can provide all the resources you need, you can simply request additional bandwidth to cater for the increased traffic and only pay for the resources that you actually use.  

Communication technology is constantly evolving, sometimes at a startling pace – just look at the impact that ChatGPT has had in just a few short months.   

By building a communication solution in-house you may get one that is exactly suited to your requirements at that point in time, but you lose the flexibility to adapt quickly when the market and the available technology changes. You may get locked into a specific way of doing things because of the restrictions imposed by your own tools.

With CPaaS you have the flexibility to adapt the tools and infrastructure to deliver on your evolving strategy – not the other way around.

Just as your strategy changes, so might your target markets. In an ever more globalized world, finding new overseas customers might be the key to growth.

The problem is that your current communication strategy may not be effective or even legal in some regions. Infobip’s messaging trends report clearly shows how there are major differences in the popularity of different communication channels in different regions. For example, WhatsApp might be the most widely used chat app globally, but it isn’t even available in China, and in the major SE Asian markets of Japan and Thailand LINE is the dominant player.

Even the usage of specific channels will differ, for example the rules for SMS communication may be quite different, even between countries in the same region.  

Partnering with a CPaaS provider that has global presence and infrastructure can help you easily adapt your communication strategy for new markets and operate successfully without breaking any local compliance rules.

Using multiple channels to communicate with customers and prospects involves moving and updating  customer data, some of which may be sensitive or subject to data protection legislation like GDPR. By creating your own communication solution inhouse you increase the risk of data being compromised or breaking compliance rules in certain countries. With CPaaS, data can be stored in a single customer data platform which can be accessed via the APIs of the messaging applications.

This not only increases data security by reducing the movement of data and the number of places that it is stored, but with a ‘single source of truth’ it enables businesses to provide a consistent experience for customers, which reduces their exposure to fraud attacks like phishing and smishing.  

The goal of business communication is to improve the experience of customers by providing information in an accurate, timely, and engaging way. New technology can support this objective and with CPaaS you can get access to it far quicker. Whether you want to start using conversational tactics in your marketing and customer service or boost your customer service with chatbots or face-to-face video calls. All can be achieved far more quickly by accessing these channels via a CPaaS platform.

Adding a new communication channel is not like buying a plug-and-play device off the shelf. You can’t always just switch it on and start reaping the rewards straight away. Every channel has its nuances, and there will be a learning curve before the benefits are felt.

CPaaS can significantly accelerate this process as the provider will already have the expertise and partner networks that you can tap into. Take email for example – there is an entire science around ensuring maximum delivery rates for messages. You have to build the reputation of your sending IP and domain by slowly building the volume of messages that you send without increasing negative indicators like spam complaints. A reliable CPaaS provider will have pre-warmed sending IPs that you can use and will be able to provide the guidance you need to give your messages the best chance of being delivered.  

In the world of SMS – a high quality CPaaS provider will have all the global network connections required to ensure that SMS is delivered reliably and cost-effectively and without using grey routes, which might harm your business reputation.  

In addition to the formal support that they provide, established CPaaS providers will have networks of developers who have experience integrating with their APIs and will be willing to share best practice and advice with their peers in your organization.

The CPaaS market is in a phase of ‘hyper growth’ as Forbes put it, but it is also evolving rapidly. There are a number of factors driving this trend, some of which we have alluded to already.

More channels: Companies are adding more and more channels to their communication offering – considering the individual preferences of consumers and the popularity of different channels in specific regions. CPaaS supports this by making it far easier to add new communication channels and to share data between channels seamlessly and securely.

Increased role of AI: Chatbots have dramatically increased in sophistication in recent years and with the advent of drag and drop chatbot builders, anyone can create one without needing to be a developer. Chatbots designed for a specific purpose take the strain off human staff and can perform an ever-larger proportion of business functions. Just as important is the increased levels of acceptance and trust that consumers have in chatbots. People will often seek out a chatbot for their first interaction with a company, knowing that they can get the right answer right away, and that their personal information will be safe and won’t result in a barrage of spam.

Conversational everything: The growth of the chatbot market and the increased sophistication and popularity of chat apps means that brands can now do conversational marketing and provide a conversational customer experience at scale. More and more use cases that rely on the dynamic two-way exchange of information can now be facilitated using CPaaS. The growth of video calls and the ability to embed video into web chats is also driving this trend.

More channels, more conversations, and a greater role for AI sounds like a recipe for confusion and data overload.

But what it actually means is more opportunity.

With CPaaS, all of these elements can be supported by a single customer data platform so that every channel has instant access to the latest state of every customer record and the customer record can be continually enriched after every interaction.

What’s more, analyzing past and present activity across multiple channels provides unique insights and intelligence that can help businesses improve their marketing and sales strategies, provide better customer experiences for more people, and improve ROI.

CPaaS is not a silver bullet, but with the right strategy in place and the right CPaaS partner, it can help you benefit from the rapidly evolving communication landscape and help you provide a consistent and joined-up experience for your customers.