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Global communication platform-as-a-service (CPaaS) market size was valued at USD 8.73 billion in 2021 and is projected to reach USD 62.54 billion by 2029, exhibiting a CAGR of 28.1% during the forecast period. Based on our analysis, the global market exhibited an average growth of 25.3% in 2020, as compared to 2019.
Communication platform-as-a-service offers real-time communication via SMS, voice, video, text, and more channels. The growing focus of businesses on customer engagement is expected to drive the communication platform-as-a-service. Similarly, the advancements in cloud technologies are expected to boost CPaaS adoption. Further, as industries are witnessing digital transformation,enterprises are keen on investing in various communication platforms to connect with customers digitally. Considering the increasing adoption, various key players are advancing their communication platform product offerings. For instance,
Rise in Remote Working Amid Pandemic is likely to Fuel Market Growth
The COVID-19 pandemic has had a significant impact on all enterprises' operating activities. Desk-based business operations are progressively moving to a remote working environment, and organizations have started resorting to online solutions. Communication was a major issue initially due to remote working and the increased adoption of BYOD for office work.Thus, considering the various applications, businesses significantly initiated investing more in communication platform-as–a-service solutions amid pandemic.
Companies are enhancing product analytics, which would positively impact business growth. Therefore, the increasing need to implement communication platform-as-a-service solutions for solving business challenges will allow users to easily and quickly build better ways to involve their customers throughout their journey. For instance,
The increased market readiness to purchase cloud-based software, mainly fundamental communication platform-as-a-service solutions, could lead to even faster adoption of the cloud-based solutions than projected, resulting in higher overall revenue growth in coming years.
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Customer Engagement Across Multiple Communication Channels to Boost Market Growth
Communication platform services have significantly grown in recent years as companies are implementing a comprehensive portfolio to withstand value creation. RCS Business Messaging, A2P messaging, WhatsApp Business Platform, and AI-powered chatbots are some examples of communication systems that enable companies to engage and interact with customers across a variety of digital touchpoints. In addition, the integration of artificial intelligence (AI) and machine learning (ML) with communication platform is supporting businesses in their progress and boost customer service.
Moreover, as customer engagement becomes essential, enterprises and brands of all sizes are implementing different communication platforms to perform their customer engagement strategy and guarantee a seamless end-to-end customer journey through various communication channels. For instance,
Thus, the increasing number of communication channels is expected to boost the communication platform-as-a-service market share.
Advent of Chat-bots to Boost Sales in the CPaaS Market
Rising demand for real-time communication has permitted vendors to provide Web RTC solutions to simplify group chats and video streaming on client devices. Organizations focus on communication services that aid them in enhancing the experience of the customers working remotely and those at their desks. This is driving the adoption of chatbot across various customer-facing businesses.
Chatbots are data-driven and scalable that offer increased efficiency and productivity to end users. Moreover, the deployment of chatbots in business applications enables brands to positively impact their customers via desired channels with faster support. Thus, integrating the communication platform through chatbot services is expected to drive the demand for the solution. Considering the vast application, many enterprises are investing chatbot-based communication platforms. For instance,
Hence, the increasing demand of chatbots in various industries is expected to provide lucrative growth for the communication platform-as-a-service market.
Rising Security Concerns to Hinder Market Growth
With the introduction of CPaaS, various enterprises are shifting from on-premises communications to cloud-driven platforms. The benefits of the solutions comprise third-party application integrations and improved productivity. However, these solutions are vulnerable to data security issues.
The lack of solid security procedures frequently results in enterprise vulnerabilities and fraud attacks. Data breaches lead to the loss of trust and revenue, even in international companies. Hence, the risk-to-benefit ratio for communication safety is essential against any possible security threats. Such continuously arising security challenges may hinder the market.
Real-time Communication Capabilities to Fuel Cloud Demand
By deployment, the market segmentation is divided into cloud and on-premise. Cloud holds the highest market share and is also expected to grow at the highest CAGR during the forecast period as cloud-based deployment enables real-time communication that helps in improving the services. Businesses are integrating the cloud-based communication platform-as-a-service to improve customer engagement and attraction.
The adoption of on-premises deployment is slowly decreasing across the region considering the vast investment and limited capabilities. However, various companies are still opting for in-house data storage services.
Focus on Customer Engagement to Surge SME’s Growth Rate
Based on enterprise size, the market is classified into large enterprises and small and medium enterprises.
Large enterprises are expected to gain maximum revenue share during the forecast period. The rapidly growing digital engagement with the customer is expected to boost the demand for communication platform-as-a-service in large industries. These enterprises are increasing IT investments to boost customer services on digital platforms, this is likely to fuel communication platform as a service market share.
Small and medium enterprises to gain rapid CAGR owing to the increasing government funds and other private investments. These SMEs are focused on offering real time customer engagement for business expansion. Thus, to fuel the customer interaction and the customer satisfaction, SMEs are integrating communication platform-as-a-service across its business.
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Continuous Patient Engagement Needs to Fuel Platform Adoption in Healthcare Industry
Based on industry, the market is segmented into BFSI, IT and telecom, healthcare, retail, logistics and transportation, hospitality, and others.
IT and telecom sector are expected to gain a dominant share of the market during the forecast period. Being an early adopter in communication solution, it grew in the industry to maintain customer engagement.
Healthcare and hospitality industries are expected to gain rapid growth during the forecast period. The growing need of regular interaction for proper customer service is likely to fuel the demand in the industries. For instance,
BFSI and retail are likely to gain significant share during the forecast period. With the rising number of customers across the digital platform, the industries are investing in communication platform-as-a-service solutions.
North America Communication Platform-as-a-Service Market Size, 2021 (USD Billion)
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In terms of region, the market is divided into five key regions: North America, South America, Europe, the Middle East & Africa, and Asia Pacific. They are further segmented into countries.
North America is expected to dominate the revenue share during the forecast period. The presence of key players across various industries is expected to fuel the demand for advanced communication platform systems. Also, the rapid growth of cloud-based software is likely to boost CPaaS market. U.S. to gain maximum market share during the forecast period owing to the rapidly increasing customer base across all communication channels. Canada is expected to gain rapid growth during the forecast period. It helps industries in creating excellent relation with the customers and expand customer base.
Asia Pacific region is projected to witness notable growth in the forecast period due to rising government investments in digital transformation. China to gain a dominant share during the forecast period. According to McKinsey’s report of ‘The Outlook for 2025’, China is the second largest market in cloud computing across the globe. In the country, Tencent is the major player with the maximum client base in the market. India is expected to witness significant growth during the forecast period, owing to the increase in small and medium enterprises.
Europe is expected to showcase a steady growth rate. The industries in the region are investing in customer-based services to expand their client base and to fuel revenue growth. This is likely to surge the adoption of communication platform-as-a-services. For instance, in July 2021, Mobile TeleSystems acquired major provider in Russia, Multiregional TransitTelecom to start a new portfolio in the market with double-digit growth.
The growing productivity in the manufacturing industry in the Middle East and Africa is expected to boost the opportunity for communication platform-as-a-service software providers. Similarly, the countries focused on advanced technologies and its investments policies such as Vision 2030 is expected to further boost the communication platform-as-a-service market growth in the region.
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South America to showcase significant CAGR during the forecast period. The improvement in internet availability and steady adoption of 5G infrastructure is expected to boost demand for communication platforms.
Growing Emphasis on Global Expansion to Strengthen Market Positions
The key players are keen on developing communication platform-as-a-service based on emerging technologies such as cloud, AI, and others to solve the challenges faced by the companies. To boost the product portfolio, these players are investing in research and development. Investing in new products and reinventing their existing products to expand their business is one of the key business strategies of the companies. Similarly, for global expansion, the market players are strategically collaborating and acquiring businesses across the globe.
An Infographic Representation of Communication Platform-as-a-Service (CPaaS) Market
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The study on the market includes prominent areas worldwide to get a better knowledge of the industry. Furthermore, the research provides insights into the most recent industry and market trends, as well as an analysis of technologies that are being adopted quickly worldwide. It also emphasizes some of the growth-stimulating restrictions and elements, allowing the reader to obtain a thorough understanding of the industry.
Value (USD billion)
Deployment; Enterprise Size; Industry and Region
By Enterprise Size
The market is projected to reach USD 62.54 billion by 2029.
In 2021, the market stood at USD 8.73 billion.
The market is projected to grow at a CAGR of 28.1% in the forecast period (2022-2029).
By deployment, the cloud is likely to lead the market.
Advent of chat-bots to boost sales in the cpaas market
Twilio Inc., Sinch AB, 8x8 Inc., Bandwidth Inc., Avaya Inc., Vonage Holdings Corp., Alcatel-Lucent Enterprise among others are the top players in the market.
North America is expected to hold the highest market share.
By industry, the healthcare is expected to grow with the highest CAGR.
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