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7 key trends driving the CPaaS market and its vendors

Do you know where the CPaaS market is headed? Expert Tsahi Levent-Levi breaks down the seven trends that are influencing how vendors offer their services.

Communications platform as a service is changing. The technology allows vendors to offer communications tools as building blocks to other companies looking to incorporate communications into their own services. Originally, CPaaS was about SMS and voice, but that has changed in recent years.

In early 2018, I identified seven trends I believed would drive the CPaaS market. Let's take a look at these trends and examine how they are currently influencing the market, as well as where the market is headed.

1. Serverless. I assumed serverless architecture would be widely adopted in the CPaaS market in 2018, with vendors following Twilio Inc.'s footsteps to add support. However, no new CPaaS vendor introduced any serverless functionality last year, leaving the traditional IaaS vendors to close this gap.

In 2019, I'm guessing we won't see many CPaaS providers adding serverless capabilities. Most of them will go after shinier objects.

2. Omnichannel experience. The omnichannel contact center greatly influenced the CPaaS market in 2018. WhatsApp introduced its business messaging API by partnering with CPaaS vendors, while Apple partnered with contact center vendors for its Business Chat API.

Many other CPaaS providers introduced omnichannel APIs last year. Twilio, Nexmo and MessageBird B.V. introduced omnichannel experiences across different social networks, each with its own approach to what developers might need.

The omnichannel experience is going to be even more important in 2019. Like it or not, carriers -- with the help of Google -- are making another attempt at Rich Communication Services (RCS). The RCS protocol has long been planned to replace SMS for carriers. While many believe it will not grow to the glory days of SMS, RCS will be relevant in some markets and use cases. RCS is yet another channel in an omnichannel world, and it's one that CPaaS vendors will need to adopt.

3. Visual interfaces and integrated development environments (IDEs). Visual interfaces and IDEs were all the rage in the CPaaS market in 2018. Twilio, Plivo and MessageBird introduced tools to support visual interfaces and IDEs for application development.

Expect more CPaaS vendors to announce visual interfaces for their platforms. As communications becomes commoditized and embedded in business processes, it's important to make it accessible to a larger market. Visual interfaces are an important step toward that accessibility.

What comes after visual interfaces? That is an open-ended question at the moment. A few vendors have dabbled in the creation of widgets and higher-level applications, but none have been commercially successful to the point of becoming a CPaaS market trend.

4. Machine learning and AI. Machine learning adoption is growing in all software domains, communications included.

CPaaS providers have started using machine learning in two main areas. The first is internally to analyze, improve and optimize the services they offer. The second area is externally to offer new features and capabilities to customers.

Twilio introduced Twilio Autopilot to enable the development of intelligent AI bots. Machine learning will continue to be a CPaaS trend over the next three to five years.

5. Augmented reality (AR) and virtual reality (VR). AR and VR were not as widely adopted by CPaaS vendors in 2018 as I expected. While many AR and VR vendors rely on CPaaS vendors to offer field services and other communication tools, they tend to build their applications and services without using any special CPaaS features.

Two factors are influencing this movement in the AR and VR market. First is a lack of sufficient standardization and availability of tools for communications-based AR and VR. Vendors in this space still need better support synchronization between live video streams and AR data streams. Second, the market is too small for CPaaS vendors to put much effort into it.

While the AR and VR market will continue to grow, CPaaS vendors likely won't introduce new capabilities for that market in 2019.

6. Bots. The trends of omnichannel and machine learning are also linked to bots. In 2018, most CPaaS vendors partnered with third parties to offer bot capabilities, including Amazon Alexa and Google's Dialogflow.

Twilio took a first stab at creating a ready-made package for bot development with Autopilot. I believe CPaaS vendors will invest more in both text- and voice-based bots in 2019.

As contact centers move toward automation and bots, CPaaS vendors will need to evaluate their position in this space. Will they assist customers by building the infrastructure needed to create bots? Or will they let their customers figure it out on their own?

7. GDPR. Most CPaaS vendors offer support for GDPR data privacy laws in order to sell into the European markets and to global companies that operate in Europe.

In 2019, CPaaS vendors will approach GDPR in a slightly different way. Vendors will need to decide how they are going to address the growing problem of call log leakage. For example, Voxox had millions of text messages exposed in November 2018. Last month, an unsecured VoiPo database saw the exposure of millions of call logs, messages and internal system credentials.

Today, call logs, messages and their metadata are stored by CPaaS vendors for multiple purposes, such as billing, serving the data via APIs to the customer, machine learning and analysis. Better practices for protecting, accessing and processing this data need to be put in place.

This was last published in February 2019

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