CPaaS Expands but Boundaries Getting Vague

Six months ago I wrote that “CPaaS is a victim of its own success. The founding principle was to free communications from the grip of the carriers. But now many carriers have a CPaaS offering.”

Some folks responded that the point of CPaaS was not to demote the carriers, and that its success should be judged by the new products that it enables and not by whether it’s a net plus or minus for carriers. I admit it is easy to get wrapped up in, “inside baseball” type discussions. Maybe I spend too much time with analyst types.

So, what is the right way to judge success? What lasting impact do we expect CPaaS to leave?

Carriers are Fine. Carriers will be Fine.

We are attracted to the story of new technologies upending sclerotic industries: Old oaks being felled, their cores long ago rotted, to let new saplings reach for the sun. A great example is Blockbuster being stomped out by Netflix and streaming video. But it doesn’t always work out that way. E-Commerce didn’t really impact the airlines – they just got to reduce customer service costs – but it decimated the travel agent.

Turning to an example closer to the topic at hand: VoIP didn’t impact carrier dominance. They had to reorganize internally, and changed their pricing, but they are essentially the same organizations as they were pre-VoIP. For a while P2P calling seemed to be a threat. Remember how rebellious Skype once was? Then Microsoft bought it, removed the P2P aspect, and made it a component of their enterprise communication suite. Now it’s about as edgy as a Swingline stapler.

What is a CPaaS Company?

The poster child for CPaaS is of course Twilio, the Silicon Valley unicorn that went public in 2016. But Twilio has never liked the label. Their CEO never uses it to describe the company.

Other names firmly associated with this label are Plivo, Tropo, Zang, and Nexmo. Of these, only the first remains independent. The other three were acquired by Cisco, Avaya, and Vonage, respectively. For more, see “CPaaS Triumps, Now What?”

There are some new entrants like Signalwire that seem to fit that same “pure” CPaaS model. And then there are wholesale IP communications providers like Symbio and VoIP Innovations that have launched CPaaS divisions. Then there are companies like Telestax and IMIMobile that are trying to help carriers add CPaaS functionality. Analysts are calling those “CPaaS enablers.”

I recommend this post by Alan Quayle: “CPaaS Segmentation.”

He’s done the most thorough job I’ve seen of trying to organize this universe.

And, I recommend this post by Tsahi Levent-Levi: “7 key trends driving the CPaaS market and its vendors.”

But you may come away from all this thinking, “it’s not obvious that all these companies really belong in a grouping together.” That’s okay. Just remember that every category in technology is ephemeral. If it helps us understand what’s happening right now, where innovation is happening, and where is value being created, then it’s useful. But don’t hold on too tightly.