5 CPaaS trends to look out for

The communications platform as a service (CPaaS) market is rapidly growing. But how is the market evolving, and what are the latest trends? Here, we provide a snapshot of tech analyst Gartner® Market Guide for Communications Platform as a Service together with some key takeaways from Infobip.

The CPaaS market is poised for growth

The CPaaS market is growing. In 2021, the market grew by 40%. Moreover, Gartner® forecasts a compound annual growth rate of close to 30 percent until 2026.

But what is driving growth? Often, it is businesses expanding their digital DNA alongside using CPaaS for customer engagement and driving business efficiencies.

Generally, CPaaS is often first adopted by a single business unit for a specific reason, such as notifications or one-time passwords. Other business units then adopt CPaaS as they see value across areas like marketing campaigns, customer services, and commerce.

More widely, Gartner® projects growth to continue across the CPaaS market, driven by demand for new and more traditional channels.

While SMS messaging continues to propel CPaaS spending among enterprises, new channels such as WhatsApp, video, and email are the latest growth engines. More nascent channels such as Apple Business Messages, Google Business Messages, RCS Business Messaging, Messenger, and WeChat will fuel future growth.

Recent research from Infobip supports this. In our latest Messaging Trends Report, we analyzed more than 448 billion communication interactions on our platform from 2022. We found that chat apps such as WhatsApp are becoming crucial channels for customer communications, demonstrating the growing importance of conversational experiences. The data revealed a 70% increase in WhatsApp interactions in 2022 compared to the same period in 2021.


increase in WhatsApp messages in 2022 vs 2021

However, while newer channels are gaining momentum, the data shows the continued growth of more traditional channels, such as SMS and email as Gartner® reports. Interactions on these channels increased by 75% and 91% respectively with businesses using both SMS and email for timely alerts and security solutions such as two-factor authentication.

5 trends fueling the growth of CPaaS

Here are the five trends’ businesses must keep in mind when investing and implementing CPaaS solutions.

1. Everything becomes conversational

Advanced conversational messaging channels such as WhatsApp, Google Business Messages, RCS, Apple Business Messages, Messenger, and WeChat support a mix of rich communications technologies, including videos, carousels, branding, and geolocation.

These channels also support payments by integrating third-party payment provider gateways or through native capabilities.

CPaaS providers use these rich communications technologies in advanced messaging channels to create an end-to-end customer journey from marketing and acquisition to onboarding, payments, and customer support.

In effect, communications platforms use advanced messaging channels to support conversational “everything”, where consumers get a better experience and businesses see superior results.

By creating richer and more proactive experiences, we expect to see two-way conversations scale across the entire customer journey. This year, we will see greater app-like experiences in chat apps. For instance, Infobip developed an AI-powered chatbot for Uber that enables its customers to order a ride through WhatsApp, creating a seamless booking experience.

Moreover, many of the major tech companies including WhatsApp, Google and Apple will launch new features this year that enhance their conversational capabilities. This will support and enhance the application of conversational everything across a broader range of sectors from ride sharing to healthcare and even the public sector.

Given customer demand for more conversational experiences, Gartner® recommends enterprises consider the capabilities they need to engage and transact with customers through advanced messaging channels in addition to traditional physical and digital options.

2. Visual builders, chatbots and conversational APIs drive omnichannel experiences

Omnichannel communications enable conversations across multiple channels while maintaining context across those channels.  

Increasingly, CPaaS providers offer conversational APIs to support one “inbox” functionality, where there is a memory of conversations across channels, and visual builders to enable developers to build omnichannel experiences.

Gartner® also notes that conversational AI, such as chatbots are used with messaging apps to fulfill less complex requests like password resets or address changes.

Many CPaaS providers offer a bring-your-own-bot model. Others have acquired AI, NLP, and bot capabilities or have built their own like Infobip.

In addition, ChatGPT shows, chatbots continue to advance by leaps and bounds. As a result, Infobip expects to see scaling text chabots alongside progress with voice and video bots during 2023 and beyond.

More advanced chatbots will enable brands to enhance marketing and sales automation. Such chabots will answer product or pricing questions, schedule deliveries, take payments, and even speak in the customers language of emojis and gifs – all within a customer’s favorite channel.

Gartner® also predicts that 2023 will see greater integration of chabots into different CPaaS functionalities and within areas such as retail for conversational commerce.

Moreover, Gartner® recommends that organizations consider building and deploying chabots where they can manage customer interaction.

Infobip is already seeing businesses and brands creating and deploying chabots to bring a new level of automation, speed and availability. Such intelligent virtual assistants are helping scale customer service, drive efficiencies and enable businesses to up and cross-sell.

3. Customer data platforms enable greater personalization

As Gartner® says, Customer Data Platforms (CDP) provide organizations with a deep, real-time understanding of customers.

While customer relationship management (CRM) has often been the system of record, it has several weaknesses. CRM data is static and misses the wealth of information in other repositories such as email, calendars, eCommerce, website, social media, public record, messaging channels, and Enterprise Resource Planning.

CDP collects data from these repositories to become a centralized customer behavior hub. CDP is, therefore, able to predict customer buying preferences, value, brand loyalty, sentiment, unmet needs, and frustrations.

The result is a dynamic layer of consumer intelligence, enabling organizations to build personalized marketing campaigns, customer journeys, and product recommendations, as Gartner® notes.  

Some CPaaS providers have built CDP capabilities, including Infobip, while others offer connections to third-party customer data platforms.

Moreover, Gartner® recommends organizations consider CDP from CPaaS providers to build a single customer view and apply predictive intelligence to deliver personalized and contextual customer experiences.

For instance, Infobip’s customer data platform People CDP helps businesses and brands connect online and offline customer data to unlock actionable insights, make more informed decisions and deliver a great customer experience.

Intuitive and seamless, People CDP helps deliver the automated and personalized experience that Gartner® predicts for 2023.

4. CPaaS providers are expanding their channel partner programs

CPaaS providers are expanding systems integrator, value-added reseller, and delivery and developer partnerships to cater to small and medium-sized business customers alongside bricks-and-mortar enterprises building capabilities.

Partners also fill voids outside North America and Europe for local-global reach and delivery capabilities. Such partners offer an understanding of local regulations, nuances, and languages of individual markets.

In addition, partners bring capability experiences, such as customer experience, tele-health, campaign management, and eCommerce.

Gartner® recommends organizations view channel partners as a critical resource to their CPaaS ecosystem as they can provide a localized service, fulfill compliance regulations, and build customized solutions and training.

Along with that addressing the demand for digital engagement using CPaaS by including developers should be key in the partner selection process.

Infobip has long valued its partnerships. Our partners include other technology firms, telecoms companies, B2B startups, and consulting and services firms.

As the one communications platform for every platform, we’re the partner of choice for businesses such as Google, Meta, Microsoft, Oracle and Vodafone to name a few.

Moreover, our Partner Connect Program ensures we’re by our partners’ side no matter the task. From integration to business planning and identifying opportunities; to approaching clients and implementing use cases, we help our partners create innovative solutions that drive new revenue streams.

5. The broader communications market is converging

Gartner® reports there is increasing convergence between CPaaS, contact center as a service (CCaaS), CRM/CDP, and digital channel vendors — all to build a great customer experience.

CCaaS platforms start with voice but are now adding SMS, advanced messaging, social media channels, and chatbots for self-service.

Digital channel vendors start with SMS, chat, and messaging. They then add voice.

Many CRM and CPaaS providers seek to add similar ingredients to deliver engaging customer experiences over many channels, complemented with AI.

AI is common to all platforms with the objective of automation, reducing costs, and improving customer experience.

Gartner® suggests organizations leverage this convergence to consolidate vendors. In many cases, they can use these providers to take over the role of an adjacent service.

Infobip is leading the way with greater convergence. We offer CPaaS alongside CCaaS as well as a CDP, among many other core services.   

It is another example of how we continue to innovate and co-create with our clients and partners to ensure we are the one communication platform for every platform.

The CPaaS opportunity ahead

Customer experience can make or break a business or brand.

So, to deliver that great experience, the CPaaS market and providers are evolving rapidly.

Platforms are innovating. They are integrating new technologies and channels to meet customer needs and deliver more conversational experiences. 

With such rapid development, it is little wonder the market will grow in the years ahead.

But with such rapid development, and against an increasingly cost-conscious environment, businesses and brands must ensure they choose a composable tech platform that reduces implementation time and delivers transformation more quickly.  

Such interoperable solutions enable organizations to quickly integrate new capabilities through easy integration, increasing time to impact while reducing infrastructure costs and implementation timeline.

Gartner®, Market Guide for Communications Platform as a Service, 19 September 2022, Lisa Unden-Farboud Et Al.

GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

Apr 24th, 2023
7 min read

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