By Nir Simionovich
The CPaaS Revolution
The CPaaS revolution (Communications Platform as a Service) officially started almost 10 years ago. It’s roots can be traced back to the original inception of the Open Source communications disruption, when open source projects such as Asterisk and Kamailio had been adopted by carriers and start-ups worldwide, to create brand new services and business opportunities.
Mostly recognized by companies as Twilio, Nexmo, Tropo and Plivo, this market is dominated by international companies, with various levels of connections to the telecom industry. While some CPaaS companies maintain their own CLEC/ILEC type operations (Twilio, Nexmo), others mostly rely on third party integrations (Plivo). In recent years, some of the equipment vendors have tried to venture to the CPaaS market (Genband/Sonus – Kandy) – with moderate success (or literally none in some verticals).
The competitive landscape
CPaaS is rapidly becoming the fastest growing category in business communications, with enterprises rapidly adopting CPaaS solution to ease their existing licensing costs, origination costs and contact center operational costs. The utilization of CPaaS services within the enterprise rapidly redefines the business models within the enterprise, creating new service delivery mechanisms and service paradigms. As time passes, the enterprise became more and more reliant on the CPaaS service, making it increasingly difficult to migrate from one CPaaS to another.
The regional CPaaS opportunity
While most CPaaS providers around the world provide a global reach service, their ability to service all possible regions with the same quality is virtually impossible. CPaaS providers such as Twilio and Nexmo, while fully capable of providing economical and high-quality services in the US, their overall quality in other regions remains questionable.
This situation creates an interesting opportunity, for local service providers to adapt themselves, by introducing CPaaS like services to their existing offering – directly competing with the global providers – who are incapable of providing a high-quality service locally. This situation is ideal for MVNO operators, seeking to add additional revenue streams, without hindering or cannibalizing their existing services.
As call minutes and mobile plan prices rapidly decline on a yearly basis, the loyalty of customers is questionable at best and combined with a highly competitive regional landscape, additional revenue streams are crucial. A CPaaS offering can rapidly turn lost minutes revenue, to actual revenue, by returning these to where they need to be – the carriers’ network.
Building your own is expensive
Many carriers around the world had tried building their own CPaaS solution, only to achieve moderate to no actual success. This can be mostly attributed to the fact that carriers’ will be carriers’ – in most cases, carriers’ rarely understand the mindset and requirements of a developer. Thus, making the task of a “home-grown” CPaaS solution expensive and complex. The utilization of CPaaS enablement services, such as Cloudonix, can rapidly introduce CPaaS services to an existing carrier infrastructure, with a fairly low-barrier of entry (both technically and financially). This will immediately result in a carriers’ ability to reclaim minutes revenue and asset revenue (DID numbers, transit, etc.) – which had been lost to the global CPaaS providers.
As the telecom and API market changes, the traditional carriers’ need to adapt themselves to a new reality – a reality where the carriers’ will no longer be valued for their ability to provide “communication services,” but also by their ability to provide “communication tools and frameworks.” The days of the “billion minutes” carrier are long gone, as the pricing per minute had declined to sub-tenth of a penny. It’s time for the carriers’ to re-invent themselves as regional CPaaS providers, capable of competing head-to-head with the global providers.
Asterisk is a registered trademark of Digium, Inc a Sangoma Company. Kamailio is registered trademark of the Kamailio SIP Server Project. Genband/Sonus/Kandy are trademarks of Ribbon Communications Operating Company. Twilio, Nexmo, Tropo, and Plivo are trademarks of the respective companies.