CPaaS remains a large and lucrative market that will continue to grow through 2023.

Edward Gately, Senior News Editor

January 19, 2023

20 Slides

For communications platform-as-a-service (CPaaS) providers, the market remains strong and is growing despite ongoing economic uncertainty.

CPaaS platforms can include a number of services. Those include messaging technologies such as texting, rich communication services (RCS) and over-the-top (OTT) messaging applications.

Our latest CF List focuses on CPaaS providers. Analysts shared their views on what it takes to succeed with the technology. It includes an updated list and fresh views on changes in the CPaaS market.

CPaaS Providers Face Strong Market Through 2023

Raul Castanon is senior research analyst with 451 Research, part of S&P Global Market Intelligence.


451 Research’s Raul Castanon

“Despite the near-to mid-term headwinds brought on by macroeconomic factors, CPaaS remains a large and lucrative market that will continue to grow through 2023, given the focus on the user experience that is driving adoption for embedded real-time communications for employee-and customer-interfacing interactions,” he said. “According to our 451 Research/S&P Global Market Intelligence CPaaS Market Monitor, this segment is projected to expand at a compound annual growth rate (CAGR) of 21% through 2026.”

CPaaS has evolved beyond its early definition in terms of PSTN connectivity with advanced artificial intelligence (AI)-enabled capabilities, IP-based services and the broad range of digital channels now available, Castanon said.

“With transactional voice and messaging use cases now table stakes for CPaaS vendors, cutting-edge CPaaS providers are looking to differentiate with support for more complex customer engagement use cases,” he said.

Changing CPaaS Use Cases

Michael Brandenburg is senior industry analyst of connected work at Frost & Sullivan. He said CPaaS use cases have changed since the COVID-19 pandemic has waned.


Frost and Sullivan’s Michael Brandenburg

“During the pandemic, there were a lot of health care use cases for not only video, but messaging, appointment notifications and vaccine reminders, things like that, while other markets like hospitality were down,” he said. “So you were getting a vaccine reminder rather than an airline confirmation or tap here to check in on your hotel. I think overall consumption is up, but it’s the use cases that are kind of shifting based on demand.”

The global CPaaS market is in a high-growth stage, with many of the contenders in the market reporting high annual double-digit growth rates, Brandenburg said. The companies represented on the latest Frost & Sullivan CPaaS Radar added about $7.6 billion of revenue into the CPaaS market in 2021.

Furthermore, he said M&A is quickly consolidating the CPaaS market, as competitors seek to gain regional presence, enrich their technology stacks or simply boost growth. He expects further consolidation in the foreseeable future.

Improving Interoperability

Roy Illsley is chief analyst of IT operations at Omdia, which shares a parent company with Channel Futures (Informa).


Omdia’s Roy Illsley

“The working landscape is not the same globally, and while in the United Kingdom the trend is hybrid working, this is not universal,” he said. “With that said, the need for more communication services is seeing growth. I will expect to see this sector continue to grow and improve the cross-platform interoperability issues. The expectation of the service is it works. But we are increasingly frustrated by the different user interfaces (UIs) and the lack of consistency and interoperability. For example a Google Meet invite will assume a Gmail account, while a Teams invite assumes an Outlook account.”

We’ve compiled a list, in no particular order, of 20 top CPaaS providers. It’s based on analysts’ feedback and recent news reports. The list is by no means complete. It includes a mix of well-known providers as well as lesser-known ones making strides in CPaaS. See our slideshow above.

Want to contact the author directly about this story? Have ideas for a follow-up article? Email Edward Gately or connect with him on LinkedIn.

About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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