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CPaaS, or communications-embedded apps, is next UC frontier

The CPaaS market is expected to boom over the next four years, with more businesses looking for communications capabilities inside the apps their customers use.

A growing number of companies are using a cloud-based platform that lets developers place communications functions...

into customer-facing applications.

The technology, dubbed communications platform as a service (CPaaS), lets businesses tap the cloud to customize their applications with SMS, telephony, authentication and other services.

The rapid rate of CPaaS adoption has left traditional UC vendors scrambling to compete against fast-growing startups, such as Twilio, Plivo and TokBox. Vonage announced two weeks ago the $230 million acquisition of CPaaS vendor Nexmo, and Cisco bought cloud API developer Tropo a year ago. In March, Avaya launched an online communication platform, called Zang.

CPaaS market expected to grow

The CPaaS space is relatively new, but it's growing fast, with the market expected to increase from $400 million in 2015 to $8.1 billion in 2019, according to Zeus Kerravala, an analyst with ZK Research in Westminster, Mass.

With CPaaS, developers embed cloud-based communication functions into mobile and Web-based business applications through APIs, which govern how an application talks to another one. This task wasn't always easy for developers.

"It's the hot area right now in communications -- taking chat and text, and building them into business applications," said Irwin Lazar, an analyst for Nemertes Research, based in Mokena, Ill.

Services available through CPaaS providers include speech recognition, authentication, telephony and multimedia messaging, which lets companies send text, pictures and videos to a mobile device over the cellular network.

With such a broad array of services at their fingertips, developers today have an almost limitless capability to weave communications into their apps, Lazar said, and businesses are buying in.  

SMS, authentication key benefits 

Another reason for the success of CPaaS is the growing popularity of SMS text notifications. Businesses have taken notice that more people are relying on text for communication, rather than using traditional telephony.

"Any business that does notifications of any kind is low-hanging fruit" for CPaaS, Lazar said, adding that industries across all sectors of the economy have been adopting the technology.  

"Instead of the receptionist spending time making 20 calls, a notification service could do the same thing," Lazar said. In regards to industries with strict legal regulations, businesses simply avoid stating too much personal information in the text, he said.

Authentication is the other area where businesses are looking to take advantage of CPaaS technology. One example might include extra security measures taken by online banking systems. The notification would send customers verification passwords that would need to be re-entered on the website. CPaaS platforms make it easier to implement and manage these systems.

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