The State of CPaaS in 2023
David Casem, co-founder and CEO of Telnyx, gives his take on the state of the CPaaS industry in 2023.
By Kelsie Anderson
Businesses need to connect with customers and employees seamlessly and effectively. That's where CPaaS (Communications Platform as a Service) comes in. In 2023, CPaaS is more critical than ever before. With the rise of remote work and virtual interactions, businesses must enhance their communication channels to stay ahead of the competition.
CPaaS platforms offer a range of communication tools that can be easily integrated into existing applications and workflows, giving businesses the power to deliver a superior customer experience. From voice and video to SMS and chat, CPaaS allows businesses to connect with their customers in ways that were previously impossible.
But it's not just about customer experience. CPaaS gives businesses the flexibility to scale their communication capabilities based on their needs, making it a cost-effective solution. It also allows companies to leverage real-time analytics and insights to optimize their communication strategy and drive better business outcomes.
In this blog post, we'll take a deep dive into the state of CPaaS in 2023. We'll explore the latest trends, innovations, and applications of this exciting technology, as explained by Telnyx CEO and co-founder David Casem. As a self-taught engineer and entrepreneur who built Telnyx from the ground up, David is intimately familiar with how CPaaS has evolved from the early 2000s to now.
Keep reading to learn more about where CPaaS is heading in 2023 and beyond and how Telnyx plans to contribute to the evolution of CPaaS.
Unified communications experiences will become the standard
As a result of the COVID-19 pandemic, usage of tools such as Zoom and Microsoft Teams ballooned practically overnight as businesses needed new ways to communicate virtually with team members and customers. This explosion in demand for communications tools created a catalyst for IT organizations to rethink how team members talk to each other and customers. The need for new, better tools means we’ll finally see unified communications emerge as the standard for organizations of all sizes, from the SMB to the enterprise market.
For enterprises to communicate effectively now, many businesses still have to install separate applications onto their devices to meet security and compliance needs and facilitate communication. These separate applications can be cumbersome and inconvenient from a user experience standpoint.
For example, in the financial industry, compliance requirements necessitate recording calls and logging text messages. As a result, companies in the industry currently have to rely on third-party applications installed on their devices to send text messages to customers in a way that can meet compliance requirements.
As we think about how people communicate, we’ll see less reliance on browsers and applications and increasingly more demand for a unified experience, traditionally referred to as fixed-mobile convergence.
Innovative CPaaS organizations will look for ways to provide unified communications experiences, regardless of employees’ locations or devices. Leveraging wireless—for example, by downloading an eSIM onto an iPhone or Android device and having the same capabilities from a native dialer that you would have in a more browser-based experience—could be one way to provide this seamless experience.
Leaning into distributed communications at the edge
Organizations will continue to move away from traditional communications desks that rely on phones and email toward more integrated, asynchronous methods of communication that take place at the edge.
Shifting from a largely office-centric model to a far more distributed one means companies need access to reliable, low-latency, secure connections to colleagues and customers.
Edge networks can provide this type of connectivity, regardless of where employees work, or where customers live.
Furthermore, the edge is significant for the enterprise space. As enterprises continue to manage a distributed workforce and global customer base, they must tackle three issues:
- Performance. Shortening the distance between a user and a platform ultimately ensures you'll have the best possible experience.
- Security. From a security perspective, the further the distance between the sender and recipient, the more likely you may inadvertently cross paths with a bad actor. By limiting the length of the communication wire, you significantly decrease potential attack vectors.
- Compliance. As different regions—for example, the E.U.—adopt GDPR and other privacy measures, their data should not traverse multiple jurisdictions. You can only solve that problem by creating infrastructure for sending, receiving, and storing data in all those places.
Edge connectivity can help solve all three of these critical challenges.
CPaaS organizations that strengthen their foundations will come out on top
While communications has evolved rapidly, it’s still a real-time service that revolves around one simple goal: getting information from one place to another.
Different CPaaS companies always have—and always will —pursue different paths. However, in recent years, we've observed many CPaaS organizations moving up-stack and away from the fundamentals of communication. In effect, these organizations have created solutions, such as Contact Center as a Service (CCaaS), that offer pre-built tools for customers. As a result, these CPaaS organizations have run the risk of displacing many solutions originally built on their platforms.
We believe that the CPaaS companies that renew their focus on the fundamentals of communication and connectivity—rather than moving into the enterprise software market—will see the most success in 2023 and beyond. By solving issues that telcos have traditionally solved and creating new and improved ways for people to connect, these organizations will become standouts in the CPaaS space.
Other disruptors in the CPaaS space
The emerging importance of the edge, wireless technology, and a return to the basics of communication and connectivity building blocks are the current biggest themes in CPaaS. However, we’re also keeping our eyes on two other technologies and concepts.
AI is currently one of the most commonly discussed disruptors across almost all industries. ChatGPT has demonstrated that AI is no longer a technology with purely theoretical business use cases. It can be deployed today, adding value for many businesses.
Making it possible for customers to leverage AI to improve productivity from a sales, customer success, and support perspective has tremendous value for CPaaS.
Multiple SIMs and security
On the device or wireless side, it’s worth noting that both iOS and Android are doubling down on the ability to support multiple SIM cards and devices, whether physical SIMs, eSIMs, or virtual SIM cards.
Supporting multiple SIMs has implications for seamless communication and connectivity on a single device or between many devices. However, it also has enormous implications for security.
To date, security has largely been managed through mobile device management and VPNs. However, Apple and Google are creating the ability for applications to choose which SIM they'll use for connectivity. That means someone could bring their personal device with all their personal apps, but their enterprise applications would exist in a different segment of connectivity. Business apps containing sensitive information, such as SAP or Salesforce, could be accessed from a personal device without fear of compromised security.
Telnyx in the CPaaS space
Telnyx will continue focusing on the building blocks that facilitate communication and connectivity. For us, that means creating a comprehensive experience that extends beyond voice, SMS, and even wireless fidelity. We want to provide tools enterprises can use to facilitate not only communications between teams and customers but also ones that can enable better connectivity.
We’re focused on figuring out how to leverage our bottom-up approach to all our products to create solutions adjacent to voice, SMS, and other leading products in the space. We’re continuing to explore how to move beyond facilitating communication to ensuring increased connectivity in ways that are easier for our users to consume and leverage.
Tackling some of the potential issues we see on the network side is a very natural place for us to go since we've invested a lot of time in building a global internet-centric network. By leveraging the network infrastructure we’ve built, we hope to eventually replace more traditional approaches to connectivity and collaboration within the enterprise.
Instead of focusing on how we can add to existing connectivity and communication tools, such as the public telephone network, we want to leverage modern technology to build better networks. As a result, Telnyx is well-positioned to deliver the same solution—if not a better solution—at a lower cost.
Ultimately, that means fewer points of failure, more integrated experiences, and—perhaps most importantly—lower costs for our customers.
To learn more about Telnyx’s future vision for itself and for communications and connectivity, check out our blog post on our recent rebranding. And to learn how Telnyx can help your business connect with team members and customers across the globe, contact our team of experts.