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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