CPaaS Trends to Watch in 2024: Enhancing CX Strategies

The Communication Platform as a Service (CPaaS) market is on an impressive growth trajectory. In 2022, the market grew 25% to $11 billion on the heels of 40% growth in 2021, setting the stage for what promises to be a thriving future. Gartner® projects a compound annual growth rate of nearly 30% until 2026, underlining the continued significance of CPaaS in the business landscape.

But what is propelling this remarkable growth? It's the convergence of businesses embracing digital transformation and CPaaS to enhance customer engagement and operational efficiency. CPaaS, which often starts as an initiative within a single business unit, such as notifications or one-time passwords, gains traction as other units recognize its value in areas like marketing campaigns, customer services, and commerce.

The Expanding Horizons of CPaaS

According to Gartner®, CPaaS is poised for continued growth, driven primarily by the demand for a wide range of communication channels, including both traditional and new options. Among these, SMS messaging continues to be a cornerstone of CPaaS spending for enterprises. Emerging channels such as email, video, and WhatsApp are gaining prominence and are considered the latest growth engines in this field. Additionally, a new wave of channels, including Apple Business Messages, Google Business Messages, Messenger, RCS Business Messaging, and WeChat, are on the horizon, set to play a significant role in fueling future growth in the CPaaS industry.

While newer channels gain momentum, more traditional channels, such as SMS and email remain important as businesses utilize them for timely alerts and security solutions like two-factor authentication, aligning with Gartner's observations.

Five CPaaS Trends Shaping the Future

Let's delve into the five key trends that businesses should keep in mind as they invest in and implement CPaaS solutions.

Convergence of the Communications Market

The convergence of CPaaS, Contact Center as a Service (CCaaS), CRM/CDP, and digital channel vendors is leading to a unified customer experience. CCaaS platforms, initially focused on voice, are now expanding to include SMS, advanced messaging, social media channels, and chatbots for self-service. Digital channel vendors, on the other hand, are integrating voice into their offerings.

Many CRM and CPaaS providers are augmenting their capabilities to deliver engaging customer experiences across multiple channels, complemented by AI for automation and improved customer experience. Gartner® suggests organizations capitalize on this convergence to consolidate vendors and utilize them to replace adjacent services.

Visual Builders, Chatbots, and Conversational APIs

Omnichannel communication, maintaining context across multiple channels, is gaining prominence. CPaaS providers offer conversational APIs to support a unified inbox where conversations across channels are remembered. Visual builders empower developers to create omnichannel experiences.

Chatbots, driven by conversational AI, handle less complex requests like password resets or address changes within messaging apps. Many CPaaS providers offer a "bring-your-own-bot" model or have developed their own AI capabilities. In 2023 and beyond, expect more advanced chatbots to enhance marketing and sales automation, answering product queries, scheduling deliveries, processing payments, and even conversing in the customer's preferred language of emojis and gifs.

Gartner® predicts that 2023 will witness increased integration of chatbots into various CPaaS functionalities and sectors like retail for conversational commerce. As businesses and brands deploy intelligent virtual assistants, they'll scale customer service, boost efficiency, and unlock upselling and cross-selling opportunities.

Customer Data Platforms (CDP) for Personalization

Customer Data Platforms (CDPs) provide real-time insights into customer behavior, offering a deep understanding of preferences, brand loyalty, sentiment, and more. Unlike static Customer Relationship Management (CRM) systems, CDPs collect data from various sources, enabling predictive intelligence for personalized marketing campaigns, customer journeys, and product recommendations.

Some CPaaS providers, like Infobip, have incorporated CDP capabilities, while others offer connections to third-party CDPs. Gartner® advises organizations to consider CDPs from CPaaS providers to build a unified customer view and apply predictive intelligence for personalized and contextual customer experiences.

Expanding Channel Partner Programs

CPaaS providers are expanding their partnerships with systems integrators, value-added resellers, and delivery and developer partners to cater to businesses of all sizes. These partners offer localized services, compliance expertise, and customized solutions tailored to specific markets.

In addition to addressing local regulations and nuances, partners bring expertise in areas such as customer experience, telehealth, campaign management, and eCommerce. Gartner® recommends viewing channel partners as a critical resource in the CPaaS ecosystem, emphasizing their role in fulfilling compliance requirements and providing customized solutions and training.

Conversational Everything

Advanced conversational messaging channels such as Apple Business Messages, Google Business Messages, Messenger, RCS, WeChat, and WhatsApp offer more than just text-based communication. They provide a diverse array of rich communication technologies, including videos, carousels, branding, and geolocation, with payment integration as an integral component.

CPaaS providers capitalize on these rich communication capabilities to craft comprehensive customer journeys, encompassing marketing, acquisition, onboarding, payments, and customer support. Anticipate the expansion of two-way conversations throughout the entire customer journey, resulting in app-like experiences within chat applications.

Leading tech giants like Apple, Google, and Meta's WhatsApp are gearing up to introduce enhanced conversational features, broadening the application of conversational technology across various sectors, from ride-sharing to healthcare and the public sector. As customer demand for conversational experiences continues to surge, Gartner® advises enterprises to assess the necessary capabilities for engaging and conducting transactions with customers through advanced messaging channels, alongside traditional communication avenues.

CPaaS Trends Drive CX

In today's business landscape, customer experience is a make-or-break factor. CPaaS is evolving rapidly to deliver great customer experiences, integrating new technologies and channels to meet evolving customer needs and provide more conversational interactions.

With such rapid development, it's essential for businesses and brands to choose a composable tech platform that reduces implementation time and accelerates transformation. These interoperable solutions allow organizations to integrate new capabilities seamlessly, reducing infrastructure costs and implementation timelines.