Summary and key findings, 451 Research’s CPaaS Market Monitor June 2020:
- 451 Research expects a near-term downturn for CPaaS as a result of the COVID-19 pandemic and its impact in verticals such as hospitality and transportation. However, the crisis is also creating a sense of urgency for digital transformation initiatives.
- We expect a positive impact in the long term due to the wave of digitalization; this will also result in a shift in how businesses consume communications services.
- We also expect a stronger emphasis on enterprise-grade requirements – including SLA, security, and support. A channel strategy could be key to address the requirements of large global organizations; telecommunications service providers could also play a key role.
Communications PaaS (CPaaS) – a platform-based approach for delivering real-time communications – experienced rapid growth in the past five years, becoming one of the fastest-growing categories within cloud communications. Like other segments, 451 Research projects CPaaS will experience a slowdown as a result of the COVID-19 global pandemic and the uncertainty of the current economic environment. Nonetheless, the crisis is influencing a shift to the digitalization of the customer experience; this could result in increased demand for embedded real-time communications and long-term growth for CPaaS.
As previously noted, digital transformation initiatives and the shift to digital delivery of the customer experience could result in increased demand for embedded real-time communications. While this will drive increased demand, in the near-term 451 Research anticipates that the overall CPaaS market growth will fall below our initial projection, as shown in Figure 2.
Our CPaaS Market Monitor report was recently updated with a scenario analysis that incorporates alternative economic and market-specific assumptions to provide a range of potential outcomes focused on near- mid- and long-term sector performance. The near-term downturn can be explained in part by the effect of the COVID-19 pandemic in verticals such as hospitality and transportation. More specifically, the negative impact could come from ‘sharing’ economy companies such as Airbnb, Lyft and Uber which have played a significant role in the growth performance of the CPaaS market to date. Conversely, other pockets of the aggregate CPaaS client portfolio have experienced a surge in demand as a result of the current environment – examples of this include grocery and food delivery services such as DoorDash and Instacart, and streaming services like Hulu and Netflix.
Analyst: Raul Castanon (451 Research)
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About the author
Raúl Castañón-Martínez is a Senior Research Analyst at 451 Research, a part of S&P Global Market Intelligence, based in Boston. He focuses on business communications and collaboration technologies such as enterprise messaging, voice, bots and intelligent assistants, speech recognition and cloud communications.
Before joining 451 Research, he was a product manager at EMOSpeech, analyzing emotion recognition technology. At Comverse Network Systems, he gained significant experience in product marketing working with tier one mobile operators to define strategy, pricing and business models for voice and data products.
Raúl is widely quoted in the top tier press, including publications such as Business Insider, CIO, Computerworld, Fortune and Wired.