Published: 23 May 2023
The CPaaS market achieved early success with offerings like SMS and voice calls. With first-generation offerings now commoditized, CPaaS product leaders must deliver more advanced capabilities in such areas as conversations, e-commerce, security and verticals to achieve higher growth and margins.
Communications platform as a service (CPaaS) market growth dropped to 25% in 2H22 as the market matured, offerings commoditized and the economy flattened. Growth of these first-generation foundational services is expected to further decelerate to 15% in 2023-2024.
CPaaS vendors have developed substantial capabilities in areas such as advanced security, messaging, conversations, artificial intelligence (AI) and video, but end-user adoption has been limited. Moreover, enterprise CPaaS spend involving a mix of advanced capabilities and solutions was only around 15% at the end of 2022.
End-user interest in purchasing newer CPaaS capabilities is increasing and is expected to reach 40% of
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