- The cloud communications sector is growing rapidly due to pandemic-accelerated trends towards remote work, and mobile-first orientation in emerging economies.
- A profusion of technologies and associated acronyms, from VoIP and UCaaS to CPaaS and CCaaS, can render an in-depth understanding of the market opaque for investors.
- Voice over Internet Protocol (VoIP) is the founding technology of virtual communications, making it possible to place voice and video calls via the web.
- Unified Communications as a Service (UCaaS) adds additional channels like video conferencing, messaging, chat, and virtual fax, alongside integrations for third-party platforms.
- Contact Centers as a Service (CCaaS) focuses on the needs of external communication teams and integrates AI solutions such as IVR.
- Communication Platforms as a Service (CPaaS) is the fastest-growing sector in the cloud communications market at a CAGR of over 34% and offers infrastructure rather than end-user applications.
SCOTTSDALE, AZ / ACCESSWIRE / September 23, 2021 / The cloud communications sector has flourished over the past decade, with virtual audio and video calls forming the basis of individual remote business relationships and entire distributed workforces. Since March 2020, the pandemic has been supercharging this development - VoIP revenues shot up 10.8% in 2020 alone.
In addition to tech behemoths, small to midsize businesses are also increasingly relying on cloud communications. This is particularly true in emerging economies, where most interactions are mobile-first. Additionally, 5G is expected to provide 1.2 billion connections by 2025, and cover a third of the world.
Furthermore, many businesses operate on a bring-your-own device (BYOD) basis. Since most cloud communications providers offer easy-to-handle apps for their end users, they benefit from this development.
In addition, their technological setup also makes it easy to integrate cloud communications into the Internet of Things (IoT), a crucial advantage in an economy moving towards a more connected world.
However, the cloud communications sector is hard to define exactly. There are several interrelated concepts, technologies, and products - each with different projected opportunities, challenges, and growth characteristics.
Investors interested in the sector encounter a profusion of acronyms to describe these technologies, from VoIP and UCaaS to CCaaS and CPaaS. This analysis clarifies these distinctions, and summarizes their currently projected market outlook.
A Profusion of Acronyms and Specialized Offers
The founding technology of the entire cloud communications sector is VoIP - Voice over Internet Protocol. As its name suggests, this allows users to make calls via the web. However, VoIP providers usually also include video calling, and follow the subscription-based "as a service" (aaS) business model.
According to recent reports, the size of the entire VoIP market amounted to $30 Billion in 2020, with a CAGR of 15%. Its 2027 value projection of $95 billion is driven mostly by cost-benefit advantages over traditional landlines, emerging 5G technology, and increased demand for mobility and flexibility.
As VoIP grew mature, providers added an increasing number of communication channels to their offer, such as virtual fax, messaging, conferencing, and chat. Many also provide integrations for third-party platforms such as customer relationship management (CRM) systems.
Out of this development grew UCaaS - Unified Communications as a Service. Its value proposition is a streamlining of processes through centralizing all business communication channels. Along with avoiding friction losses from siloed messaging, this centralization also delivers considerable cost savings.
Globally, the UCaaS market is projected to grow at a CAGR of 9.6% until 2027, to reach an overall market value of over $26.2 billion, with North America and Europe accounting for the largest geographical markets.
While VoIP and UCaaS provide general-purpose communication tools to a large variety of businesses, CCaaS offers a more targeted technology. Contact Center as a Service (CCaaS) platforms are a type of UCaaS solution tailored to the needs of customer service or sales departments handling large volumes of customer communications.
In particular, many of these solutions integrate artificial intelligence (AI) tools such as self-service features and interactive voice response (IVR) to help increase the efficiency of interactions as well as customer satisfaction.
Gartner is expecting at least 50% of contact centers to adopt CCaaS by the end of next year.
In line with this, the global CCaaS market size is set to reach $10.8 Billion by 2028, with a CAGR of 15.7%.
CPaaS, finally, stands for Communications Platform as a Service. Unlike the other technologies discussed here, it offers customers only the basic infrastructure for communications, but no actual end-user applications. Instead, it allows enterprises to build their own apps on top of the CPaaS provider's APIs. For example, CPaaS makes it possible for companies to include direct voice and chat customer communication channels in their own shopping apps.
During the forecast period 2020-2025, the CPaaS market is expected to grow at a CAGR of 34.3%.
Similarly, IDC is projecting a CAGR of 33%, and a total global market size of $17.7 billion by 2024.
As the above data shows, the strongest trend is currently towards CPaaS, due to its lucrative nature in the B2B sector. However, many providers are hybrids of the above categories, especially companies that have evolved from basic VoIP providers to develop expansive CPaaS capabilities.
An increasingly connected economy demands fast, cost-effective, and convenient communications - and mature cloud services deliver.
Media Contact Information:
Name: Jeremy Boudinet
Company: Nextiva
Email: [email protected]
Website: https://www.nextiva.com
SOURCE: Nextiva