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CPaaS – a technology for the future

There is a received wisdom that as businesses flock towards the cloud, they are looking for a single platform on which to manage all their communication needs, leading to boom times ahead for communications platform as a service

Companies, it seems, can’t get enough of communications platform as a service (CPaaS). These are boom times for the technology – a study from Juniper Research predicts that, worldwide, the CPaaS industry will be worth more than $34bn by 2026.

Those numbers reflect the determination of companies to seek closer contact with their customers. According to research from IDC, nearly 80% of enterprises are turning to customer engagement platforms and more than half of these will be using CPaaS technology.

What has made CPaaS the go-to method for customer engagement is the ubiquity of cloud technology and how it has transformed the way businesses operate. “Companies had to come up with different ways to interact with customers,” says IDC research VP Courtney Munroe, who points out that in the last few years there has been a steady move to cloud and, in particular, there has been a confluence of mobility and cloud. “More people use smartphones and companies realised that they could develop apps for them,” he says.

Steve Forcum, chief evangelist at Avaya, is also aware of the importance of cloud within enterprises looking to engage with customers. “Some customers may keep elements of their communications stack in their datacentres, but more are then infusing cloud-based capabilities,” he says. “We’ve moved to help customers across this spectrum by bringing cloud-based benefits to their datacentres.”

But the technology on its own is in second place to the need that companies have to be more responsive to customers. The underlying drive towards CPaaS is the need to offer a more flexible way to interact with customers.

This is a belief endorsed by Toni Galo, software-as-a-service (SaaS) product marketing manager at Alcatel-Lucent Enterprise, who says: “CPaaS is a great way to make complex technology work together in a simple manner – ultimately coming together in one interface. The result is a seamless user experience across different platforms, especially in times of remote work, when many businesses had to reinvent themselves overnight.”

Galo highlights the fact that the technology gave enterprises new ways to reach their customers and to connect to different ecosystems. “Instead of interrupting the flow of communication to switch to a supported platform, users would be able to reach a business across multiple channels,” he says. “What this means in practice is that everything has been made easier for the customers to discover more about a certain business. By leveraging AI [artificial intelligence] and chatbots, businesses were able to provide information without the need for the user to use exact search phrases to get to the requested information.”

Avaya’s Forcum believes that underlying this move to CPaaS is a radical reappraisal of the way businesses have changed and that for enterprises to survive in this new economic era, they must compose and deliver “memorable” experiences. “The world has changed in the last decade more than any previously,” he says. “We now live in an ‘experience economy’, where experiences are now valued by customers and employees alike, more than standalone products and services. The experiences we now enjoy and expect in our everyday lives drive similar aspirations for the way we want to work and do business.”

This has entailed a radical shift in communications technology, he adds. The old approach to business communications no longer works. Voice-centric, monolithic apps fail to deliver personalised experiences that target very specific use cases.”

Range of options

It is this ability to offer customers a range of options that distinguishes CPaaS from other cloud-based communications technologies, such as unified communications as a service (UCaaS). In particular, says Mike Stowe, director, developer marketing at RingCentral, the choice of media provides flexibility, and the ability to offer text messaging can be especially appealing. “SMS offers an easy-to-digest means of communication – with read rates as high as 90% within the first three minutes – compared to emails, which often are missed or go unread,” he says.

And to Alcent-Lucent’s Galo, this flexibility is key. “The main difference between UCaaS and CPaaS is that UCaaS is a dedicated platform with a set of features and services, with little room for change,” he says.

But Galo believes that UCaaS can be the basis for more, adding: “A UC platform can do a lot of things: chat, audio, video, group calls, file and screen sharing, storage, PBX integration, task and project management. This can then be integrated with a client relationship management system to keep track of customer information.”

This CPaaS can then be used to integrate these UC platform features to provide an easier way to retain customer data and, at the same time, communicate with customers, he says.

There is also the issue of the changing business environment to consider – the way individuals operate changed significantly during lockdown. “The pandemic significantly altered views of work/life balance, scheduling expectations, and the ways in which individuals communicate – they are doing it less in person and more over message, video or phone,” notes RingCentral’s Stowe. The use of CPaaS has provided the flexibility to make it easier to react to these changing circumstances, he says.

For IDC’s Munroe, this flexibility has another function – it allows companies to differentiate themselves. “They are moving away from using off-the-shelf software and are developing their own APIs [application programming interfaces],” he says. “It’s relatively easy to create that differentiation – you don’t even have to be a programmer to develop apps.”

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However, there is still a long way to go in the journey towards greater customer engagement. According to IDC research, only 22% of companies use more than three channels for conversational engagement. Consumers worldwide typically use four messaging channels. Also, only 35% of organisations allow a customer to transfer from a chatbot to a live agent for enhanced support. Companies that have implemented such a facility report far higher levels of customer satisfaction.

But that’s not the whole story, says Munroe. He points out that different age groups, countries or regions prefer different ways of communicating. “This is where the flexibility of CPaaS comes in,” he says. “By offering flexibility, companies can engage with customers in the way they want to – in some countries it’s SMS, chatbots or even voice. Or they could distinguish by age – young people want text while older people want voice. The whole point is making things easier for customers.”

So how do companies differ in what they offer their customers? According to Munroe, there are different approaches, from the pure-play CPaaS companies such Twilio and Genesys and those CPaaS businesses that that have emerged from the SMS market and have added voice – Sinch, Inforbit and Vonage, for example. Then there are more established communications companies such as Avaya and Alcatel-Lucent that have been looking to add CPaaS capability.

It is clear that companies have different approaches to CPaaS. For example, Avaya looks to make its CPaaS technology part of the Avaya architecture. “The Avaya OneCloud Experience Platform is designed to transform businesses without disruption,” says Forcum. “It allows our portfolios of UCaaS, CCaaS, CPaaS and Workstream Collaboration to act together as one. This allows the same technology to be used to enhance experiences for all stakeholders. It thus protects existing investments by infusing layered innovation on top of current assets to connect them with cloud capabilities.”

Alcatel-Lucent’s Galo says his company took a different approach from other suppliers. “We do sell a UC platform that competes with other products but, in addition, our UC platform has an open architecture with a full set of free-to-use SDKs [software development kits] and APIs for companies that want to integrate it with any other system that supports APIs,” he says. “In addition to this, our portfolio encompasses hardware and network as well as enabling us to provide a full communication and collaboration service from ground up.”

UCaaS and CPaaS in a single platform

For RingCentral, the key is combining UCaaS and CPaaS into a single platform – UCPaaS, says Stowe. “This allows businesses to use their trusted business numbers for their different communication methods, have their customer interactions and data in one place, and ensure that compliance regulations uniformly apply,” he says. “With UCPaaS, users have many choices – they can use applications ‘out of the box’, they can easily integrate third-party applications via secure logins, or they can build brand new applications using our award-winning APIs.”

There are lot of suppliers competing for a slice of the market, says Munroe, and even Amazon is investigating it. “But to be successful, you have to be really good at one thing or be good at everything,” he adds.

Suppliers will be striving to compete for such a growing market, and Alcatel-Lucent’s Galo has already seen quite a change. “A regular CPaaS customer used to be either an organisation with a very specific request that wasn’t available anywhere off the shelf, or a futuristic SaaS startup wanting to shake things up,” he says. “Today, there is no restriction.”

Galo gives an example of how things have changed. “Healthcare organisations are looking to improve decision-making with IoT [internet of things] devices, mainly sensors, or deploying device tracking to waste no time when preparing for surgery,” he says.

There are exciting times ahead for CPaaS suppliers Galo adds: “There’s a platform for everything we consume – video on-demand, taxi fares, music streaming, knowledge, etc. The first company to create a platform to rule them all will be the high-rolling winner.”

Stowe agrees that there will be a greater need for more integration. “We see even greater demand for a secure, unified system that will allow customers to use their same business numbers and have one set of APIs to manage all their communication needs,” he says. 

There will be plenty of companies looking to win that particular race – and that means plenty of opportunities for businesses that want to serve their customers better.

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