What is CPaaS?

What is a Communication Platform as a Service (CPaaS)?

CPaaS stands for Communications Platform as a Service. A CPaaS allows developers to add real-time communications features such as SMS messaging and voice calling to their applications without the hassle of dealing with the complex telecom infrastructure.

As industry analyst IDC describes them, "CPaaS platforms offer cloud-based communications APIs that make it easy to integrate services into critical business processes, such as customer relationship management (CRM), logistics, transactions, and customer support. CPaaS also allows the rapid implementation of customer engagement solutions at scale using real-time APIs to engage with customers across a variety of channels and use cases such as voice, SMS, and two-factor authentication."

At Plivo, we like to think of it as your business communications as a service. Now that many customer interactions are remote, mobile, and virtual, a CPaaS can help you keep your business communications agile to match the rapid changes we’re seeing in telecom today.

What’s the difference between CPaaS and UCaaS?

CPaaS is a cloud-based platform that offers communication APIs and SDKs for developers to integrate into applications, while UCaaS (Unified Communications as a Service) is a managed cloud-based service that combines communication tools such as voice, video, messaging, and collaboration into a single unified solution for businesses.

CPaaS market outlook in 2024 and beyond

Analysts predict that the CPaaS market will grow exponentially over the next decade. Market size is anticipated to grow from $12.3 billion in 2024 to $121 billion by 2034, a compound annual growth rate (CAGR) of 25.6%. The healthcare, finance, and retail industries are the primary adopters of CPaaS, though innovations in AI will propel market demand across industries. 

Analysts divide the CPaaS market into two main components: solutions and services. Messaging APIs, voice and video APIs, and payment APIs fall under the solutions category. Services refer to consulting and support services that enable businesses to deploy and optimize CPaaS platforms. The solutions component is the largest part of the CPaaS market, though as more businesses adopt these tools, services are anticipated to grow quickly.

How does a communication platform as a service work?

Cloud-based communications platforms provide a bridge between businesses and telecom carriers, programmatically connecting a business’s devices and applications via application programming interfaces (API) that provide all the code a business needs to incorporate communication functionality into their applications. On the back end, cloud communications platforms connect to telecommunication carriers and operators to route messages and voice calls on behalf of businesses.

The best CPaaS platforms (including Plivo) automatically optimize for changing traffic patterns and assess which route is best suited for each message or call. We also receive real-time deliverability feedback from handsets across the globe to ensure that messages are actually being delivered to the end users. And we have a team that manages relationships with carrier networks and monitors impactful changes to telecoms infrastructure.

To use a CPaaS, businesses choose virtual phone numbers to send and receive SMS messages and make and receive voice calls. They can programmatically control conversation flow within their applications using the platform’s Voice API and SMS APIs and via instructions within their code to manage the routing of incoming and outgoing messages and calls.

What are the benefits of using a CPaaS?

A CPaaS provides businesses and developers with a suite of communication tools and services accessible via the cloud. It can integrate messaging and voice calling into mobile and browser-based applications. 

Scale flexibly while keeping costs low

Because it’s a cloud-based service, a CPaaS is scalable and flexible. CPaaS eliminates the need for costly infrastructure investments, thereby reducing capital expenses, and because businesses pay only for the services they need, it also reduces operational expenses. Eliminating on-premises hardware also reduces the need for highly skilled (and highly paid) systems administrators.

Secure, reliable infrastructure

CPaaS providers architect their platforms for high levels of security and reliability. CPaaS providers often invest heavily in security measures to protect customer data. As a result, CPaaS solutions can help businesses comply with industry regulations, such as GDPR and HIPAA. 

With an API-driven architecture, developers can customize communication features, ensuring they meet the unique requirements of each business. The agility of a cloud-based model enables organizations to respond quickly to changing market dynamics and customer needs.

Improve the customer experience

CPaaS providers empower omnichannel communication by allowing businesses to interact with customers across voice, SMS, email, and chat. Companies can interact with customers on their preferred channel while maintaining a centralized record of each interaction that leads to a seamless, consistent experience. 

CPaaS also enables real-time communication, allowing businesses to promptly respond to customer inquiries and requests. CPaaS can personalize communication based on customer preferences and behavior, improving customer satisfaction.

Increase productivity

A CPaaS can help teams work more efficiently by automating routine tasks, such as appointment reminders, order confirmations, and customer support, freeing up employees to focus on more strategic work. New communications features and services are ready to deploy rapidly, speeding up the release of improved capabilities.

What can a CPaaS do for your business?

CPaaS offers a wide range of capabilities that enable businesses to enhance their communication strategies and improve customer experiences.

Primarily, a CPaaS simplifies the process of adding capabilities like voice calls, video conferencing, and messaging. Many businesses use CPaaS to enable voice and video calls within their apps, making it ideal for virtual meetings, telehealth services, or team collaboration tools.

Messaging is another common use. Companies use CPaaS to send SMS/MMS notifications or to enable two-factor authentication by delivering one-time passwords. Push notifications are also easily implemented, ensuring users receive timely updates or promotional messages.

Customer service teams can use CPaaS to integrate live chat, chatbots, or automated voice systems. Features like call routing and interactive voice response (IVR) make managing customer inquiries more efficient.

Beyond these uses, CPaaS supports call analytics and recording, which are invaluable for monitoring performance, ensuring compliance, and training staff. It also facilitates omnichannel communication, allowing businesses to engage with customers across email, phone calls, and social media from one unified platform.

What types of CPaaS providers are there?

CPaaS providers differentiate their services and go-to-market strategies by focusing on one or more specific areas.

• Vendors with a telco background tend to have a strong focus on voice connectivity, with a comprehensive suite of APIs to manage services such as purchasing phone numbers, provisioning Session Initiation Protocol (SIP) trunks for VoIP calls, and configuring advanced voice scripts.
• Others providers have built a strong messaging offering or may focus on supporting video collaboration use cases.
• Some vendors have a strong focus on the customer experience, providing support for a wide range of messaging apps (e.g., WhatsApp, Viber, Facebook Messenger), or may seek to differentiate based on advanced capabilities to support the customer journey, such as Conversation AI or Customer Data Platform.

How do I choose a CPaaS provider?

Here’s a short list of questions you can ask to see which CPaaS providers are right for your business.

1. What channels do I need?

Determine what kinds of communications you need — voice? SMS messaging? others? — and make sure the provider supports them.

2. Will I be able to scale?

Make sure the provider can grow with you, adding features and capacity as you need them as well as helping to manage costs with volume discounts.

3. Is it easy to get started?

Check to see whether the provider has well-documented APIs and SDKs for smooth integration of their platform into your existing systems.

4. Is it reliable?

Ask about the provider’s carrier network, uptime SLAs, global points of presence (PoP), support organization, and data center redundancy.

5. Is it secure and compliant?

Your provider of choice should demonstrate compliance with relevant industry standards and recommendations such as GDPR, HIPAA, and PCI DSS. Ask for details on how the provider ensures physical, network, application, data, and payment security.

6. What does it cost?

Ask for a breakdown of costs for items such as phone number rentals, incoming and outgoing message units, incoming and outgoing voice calls, and carrier surcharges.

7. How is customer support?

Start by checking out the documentation, then look at the support portal. Find out what support plans and levels are available, and what’s included in basic support compared to premium plans.

8. What do other customers say?

Look at review sites such as G2 and check the provider’s site for customer case studies and testimonials.

9. Can I try it out?

Many providers offer a free trial so you can get a feel for how their platform works without spending money.

Key CPaaS features and functions

CPaaS solutions focus on enabling real-time communication features within applications through APIs and SDKs. Here’s a list of core features and functionalities to look for as you vet different CPaaS solutions.

1. Voice Communication

CPaaS supports internet-based voice calls with VoIP integration. They include call management features such as call routing, forwarding, and interactive voice response (IVR). CPaaS also allows recording for compliance, training, or analysis.

2. Video Communication

These platforms include features for video conferencing, in-app video calls, and screen sharing. CPaaS enable virtual meetings, webinars, or video chat capabilities directly through apps. 

3. Messaging

CPaaS can manage MMS and SMS to deliver alerts, promotions, and updates. These tools support rich messaging (RCS) with media and interactive elements. In-app chat tools provide real-time messaging services within your applications.

4. Authentication and Security

CPaaS can be used to send one-time passcode to enforce two-factor authentications. Services like Plivo can deliver OTPs via voice or SMS, and confirm user identities during signup through one seamless conversation. 

5. Customer Support Tools

Live chat, chatbots, and call center features improve customer service interactions. Customers can connect to human agents via live chat in real-time while chatbots handle routine, simple customer queries. 

6. Analytics and Insights

CPaaS gives you deeper insights into your communication performance, tracking calls and messagings for delivery, response rates, and call performance. User behavior analysis can help you spot patterns in your customer behavior and improve your outreach.

What are common CPaaS use cases?

At Plivo, we think of use cases in three ways: product, industry, and business type.

Product use cases

Product use cases generally involve the day-to-day tasks of running your business. A CPaaS can play a role in marketing, sales, or customer service. It can also improve your data security and help customers keep their accounts safe. 

Marketing

There are dozens of ways to use CPaaS to promote your product or service. Some companies use SMS alerts and notifications and voice notifications for important updates. SMS marketing allows you to engage with prospects and customers by sending bulk SMS messages with a single API call. 

Customer service 

Call forwarding and interactive voice response (IVR) can help improve customer service. 

Security

Two-factor authentication lets you authenticate users, while number masking safeguards personal phone numbers from being shared.

Industry use cases

Industries that heavily rely on cloud communications providers include healthcare, financial services, hospitality, and government.

Industries such as e-commerce, healthcare, finance, travel, and education are leveraging CPaaS to enhance their services. For example, e-commerce companies use it to send order updates or personalized marketing messages, while healthcare providers rely on it for telemedicine and appointment reminders. 

In finance, CPaaS ensures secure transaction alerts and fraud prevention, while travel companies use it for real-time flight notifications and booking confirmations. In education, CPaaS powers virtual classrooms and student engagement tools.

Business types 

Enterprises, nonprofits, and startups all utilize cPaaS for their communications. 

[Read more: See all of Plivo’s CPaaS use cases]

Plivo’s approach to multi-cloud CPaaS

Many organizations add fault tolerance to their IaaS and PaaS platforms by using multiple providers. We’re seeing the same trend in SaaS software, and particularly with CPaaS — and for excellent reasons.

In a report based on the 451 Research Voice of the Enterprise (VOTE) survey, 451 Senior Analyst Raul Castanon says, “As mainstream enterprise adoption continues to grow, we expect CPaaS will mirror key trends driving the evolution of the larger IaaS/PaaS market.”

Three of the most important reasons for a multi-cloud approach include gaining 100% uptime, getting access to unique platform-specific features, and optimizing costs.

1. Resiliency‍

Using multiple cloud communications platforms keeps your team from having to depend on a single point of failure. Redundancy is a must for mission-critical systems and applications.

2. Platform-specific features
Selecting a secondary platform allows you to send messages or calls through the provider that provides the best call quality or message deliverability, ultimately offering better service to your customers.

3. Cost optimization
Providers have different rates for services in different countries. With multiple providers you can plot out the best rates and optimize your costs.

Read more

Why Businesses Should Employ Multiple Cloud Communications Platforms

A CPaaS platform success story!

In the summer of 2021, marketing company Fluent turned to Plivo because, Senior Manager Sharita Passariello says, in Canada, “I wasn’t seeing great engagement as far as click through rate goes, and I didn’t have any clear line of sight into our deliverability stats … to understand what variables were in play and what I could do to optimize.

“I wanted to better our Canadian SMS program long-term, and I didn’t have months to do that — to wait for the perfect solution.” One of her colleagues who was familiar with Plivo suggested she give it a try.

Passariello says, “I was able to set up a business account on the spot, link a credit card, and begin testing. I was blown away by how easy the initial setup was.

“Over the next four weeks we were able to double our SMS revenue in Canada and increase our revenue per subscriber by over 30%. It was a game-changer.” Passariello says Fluent has since started using Plivo for some of its US SMS traffic.

Not only was Plivo easy for her to use as a manager, it was also easy for Fluent’s technical staff to work with. “Our developers had us up and running with very minimal back and forth. The documentation is clear. Our testing was straightforward. It was one of the most seamless integrations that I’ve been a part of. I think we were running within a day or two of creating an account.”

Plivo is a pioneering CPaaS provider

“Plivo can be considered among the pioneers for CPaaS and continues to innovate, with novel approaches such as multicloud CPaaS, which can be instrumental for enterprises looking to address challenges related to resiliency, scalability, global coverage, and regional regulation requirements.”

“Plivo can be considered among the pioneers for CPaaS and continues to innovate, with novel approaches such as multicloud CPaaS, which can be instrumental for enterprises looking to address challenges related to resiliency, scalability, global coverage, and regional regulation requirements.”

Raul Castanon, 451 Research / S&P

5 lessons we’ve learned as a leading CPaaS provider

#1 — Having our own carrier network matters

We knew we couldn’t build our own carrier network overnight, but we also knew that for our customers to be able to reliably reach their own customers, we couldn’t rely on aggregators. Our infrastructure and technology layers all had to have the same commitment to quality as our premium carrier network.

#2 — We have to take care of our customers, and we do

Our documentation and support portal have a lot of the answers you need, including how to get started. But we also pride ourselves on offering white-glove customer support. To us, that means keeping an eye on how you’re doing and reaching out when we see a problem. We understand that glitches can be frustrating, so we do our best to offer solutions quickly.

#3 — Reliability rules — our customers can count on Plivo’s CPaaS

We connect directly with Tier 1 telecom network operators in more than 100 countries, and have direct connectivity with carriers in 190+ countries overall, along with seven points of presence (PoP) on five continents to give customers the best voice call experience. We staff geographically distributed network operations centers (NOC) in Austin, Texas, and Bangalore, India, to deliver round-the-clock support from trained engineers.

#4 — Feature parity empowers CPaaS migration and redundancy

To be the top alternative to Twilio, we need to offer customers feature parity. Everything you can do in Twilio you can do in Plivo — but we offer more than that. Twilio can’t match our reliability, call quality, and pricing. Plivo is easier to use, has a wider global reach, and offers better tech support.

#5 — We know the importance of managing costs at scale

What costs do businesses that use cloud communications platforms have to consider? They start with unit costs to send messages and make calls, but they also include things like support contracts and sometimes phone number rental. But there’s more to the cost equation. Consider quality of service. If your CPaaS can’t reliably deliver text messages across every locale where you have customers, you have to add in the cost of resends. Similarly, with voice calls, poor connections can require people to hang up and try again. You pay for every voice call made and received, so if you need multiple attempts to get a clear line as a result of poor quality, the costs increase quickly. Lower quality also leads to higher customer support costs.

Plivo is the #1 cloud communications platform on G2

Software review site G2 invites users to rank more than 170 vendors in their CPaaS category. Plivo is the top-rated CPaaS in the category and has been number one for the past eight quarters. We’re also rated number one in satisfaction, with a 99/100 score.