CPaaS 2.0 and The Next Generation

CPaaS 2.0 and The Next Generation

By Phil Edholm November 30, 2016 1 Comments
Phil Edholm PNG
CPaaS 2.0 and The Next Generation by Phil Edholm

The topic of Communications Platform as a Service (CPaaS) has become very hot recently. At the BC Summit a couple of weeks ago, I discussed how CPaaS relates to UC and introduced the concept of CPaaS 2.0. The discussion focused on how the integration of communications into business processes is changing today and in the future. The presentation and discussion was very well received at the event and I have been asked to share the concepts here on the UCStrategies site.

The first point of the discussion was that CPaaS is not UC. To better understand, UC can be characterized as integrating the range of communications modalities (voice, video, text, sharing) into the personal business process of collaborators in the enterprise. In the structure of Knowledge, Information and Service Workers (read a white paper here about how UC services apply to these groups), UC is primarily focused on the knowledge workers, while CPaaS impacts the information and knowledge workers. However, CPaaS can also impact customers and partners outside the organization.

Earlier concepts like UC for Business (UCStrategies), Communications Enabled Business Processes, or CEBP (Avaya), and the ACE platform (Nortel) provided a mechanism to integrate applications into the premises PBX. However, the challenge was that to integrate these together, the IT and Telecom teams had to work together, a major challenge in most organizations at the time. While earlier CEBP assumed that the business process would integrate with the traditional PBX, a new range of solutions integrated the applications directly with the PSTN for both voice and SMS. The app developer could invoke communications without involving the PBX or the telecom group. A range of companies have delivered solutions in this arena, including Twilio, Nexmo and others. This new movement in technology has become known as Communications Platform as a Service (CPaaS). While the more well understood Unified Communications is focused on providing meeting and representation services for employees and the company (see my article on next-gen business communications here), CPaaS is designed to use the emerging capabilities of RESTful APIs to allow rapid integration of communications capabilities into business process flows. This is accomplished through simple programming that can be deployed using the modern coding techniques and is well understood by the applications programming community.

CPaaS has been used for several capabilities, but they generally fall into three use case categories:

  • SMS Messaging – Sending an SMS message to a phone or a group of phones. This can be used for a variety of services, including:
    • Generating alert messages
    • Password updates
    • Reminders
  • Machine Interactive Calls – a call from a machine that includes a question requiring a response from the called party, for example, a confirmation of an appointment.
    • Appointment Confirmations
    • Response Collection
  • Inter-human Calls – connecting two or more humans/endpoints together for a conversation based on a business process need.
    • Connecting two or more parties.
    • This is done so that the parties do not call each other but rather are called to join
    • Can include functions like rapid team formation where several parties are called to participate in a conference about an urgent topic

The basic CPaaS service enables a developer to define an action through an Applications Program Interface (API). For example, to send a text message to a phone, a simple API command, might be: “Sending Phone Number, Target Phone Number, Text Message”. By sending this simple statement (with a little more code for context), the application developer could send a text message to a phone users, reminding them of an appointment or confirming an action. CPaaS has proved that integrating real time into business processes has significant value. The typical CPaaS platform exists in the cloud and is generally charged for usage, typically a per minute/per call billing mechanism. A second mechanism is the use of “mash-up” integration capabilities like Zapier and IFTTT (If This Then That), and include much simpler programing enabling a trigger event in one app to cause an action in another app. For example, a simple integration would call a phone number and play the text of an email from a specified individual. This could be used for notification of an event. The key to the success of CPaaS is that it can be implemented by the IT/ Applications team without having to integrate or understand the telecom world. The simple APIs make it easy to do the basic capabilities that add huge value. By enabling the app developer to drive a communications action directly, the use cases have exploded.

Traditional premises vendors like Cisco are offering integration APIs for platforms like Spark, and Avaya has introduced Zang. Mitel was showing an API based capability across all its PBX platforms at its industry event a few weeks ago. Of four major initial CPaaS/API vendors: Twilio, Tropo, Nexmo, and Corvisa, three were acquired (Tropo-Cisco, Nexmo-Vonage, Corvisa-ShoreTel,) and Twilio went public with a market cap of about $3B. Clearly all the major enterprise communications players see CPaaS as a critical component of their future offerings.

More recently a new class of CPaaS has emerged - CPaaS platforms based on Real Time Web Communications, not the PSTN. This new capability, which I refer to as CPaaS 2.0, takes advantage of the WebRTC standardization for both browser and mobile-based web communications where the communications is done between the apps without using traditional PSTN numbering or resources. In our increasingly mobile-first world, the ability to do the communications directly from the application without changing to a telephony interface has significant advantages. A good example of this is the Amazon Mayday where the communications is between the app in the Fire Tablet and the Amazon customer team. By integrating the communications into the actual application, versus using a PSTN telephony call, the experience includes the customer seeing the agent via video, the agent seeing the screen view of the customer, and the ability to both control and push information to the customer. This experience would not be possible if it was implemented using the CPaaS 1.0 PSTN functionality.
A number of new players have emerged in the CPaaS 2.0 space, early players like Tokbox and Kuretno have been acquired (Telefonica and Twilio respectively), while other companies like Temasys, Agora and Ytel are providing complete frameworks that enable applications developers to rapidly integrate real time into their apps, including the network characteristics to enable quality real time. Carrier telecom supplier Genband has delivered Kandy, a CPaaS 2.0 solution that has seen significant success in large systems integrators and medical applications.

With this range of options for how to enable real time communications from applications, a new challenge Is emerging - which platform to use? The first choice is whether to use a PSTN-based communication or to use a web-based communications channel. The second is whether to use a solution provided by the enterprise communications platform or to use an independent third-party platform. The four choices, as shown in the figure below, should be driven by the communications requirements and who is communicating. If the communications are between employees or are predominantly involving an employee, using the enterprise communications platform may be best. On the other hand, if most of the communications is either with third parties or with employees away from a corporate location, a third-party CPaaS may be best. The choice of whether to use the PSTN or in-app web based communications is driven by a host of factors. If the customers will not download an app, then the PSTN/SMS may be best. If the app is downloaded on the user/customer device, then in app web communications may be best. If the communications require video, then the web in-app generally makes more sense.

Finally, as with much of the last 15 years in the communications industry, changes often come from adjacent markets and vendors who exploit that adjacency. Cisco won big in VoIP as they were the dominant enterprise data networking vendor, while Microsoft is currently leveraging the adjacency in Personal Productivity Software (Office) to win a significant portion of the UC business. The cloud compute Integration Platform as a Service (IPaaS) market that delivers platforms to rapidly integrate applications together and build business solutions is beginning to communications enable those platforms. In the most recent Magic Quadrant for IPaaS, Gartner identified 17 companies, ranging from Oracle and SAP to smaller companies. Several of these organizations are looking to add communications capabilities to their platforms. Meanwhile, traditional telecom players like Avaya are entering the IPaaS market with product like Breeze.   

For the enterprise communications industry, the advent of CPaaS, both 1.0 and 2.0, is introducing new opportunities for vendors, cloud providers, IT staff, channels, and consultants. While traditional UC capabilities generally are productivity savers for knowledge workers, CPaaS changes fundamental business models. For example, if 10% of orders have some form of error and not correcting that error results in losing 50% of the orders with errors, a CPaaS solution that eliminates 50% of those errors will result in a 2.5% increase in revenue. For many businesses that are already operating past the profit point, this level of additional business could result in an additional 1% profit. For a business with a 10% profit margin, that 1% increase is a 10% increase in profitability, which results in better business evaluations and stock prices. In this time of unprecedented change, cloud pricing pressure, and other shifts, CPaaS (and IPaaS with communications) is opening new doors to add value, focused not on communications alone, but on changing the business processes and strategic market approaches.


1 Responses to "CPaaS 2.0 and The Next Generation" - Add Yours

Joe Black 12/5/2016 1:56:06 PM

" (read a white paper here about how UC services apply to these groups)"


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