3 Messaging Technologies for the Future of CPaaS

August 2020

Telecoms & Connectivity

Sam Barker

VP of Telecoms Market Research

The CPaaS (Communications Platform-as-a-service) market is set to increase over the next five years, as the total value will reach $25 billion in 2025; rising from $7 billion this year.

Juniper Research identifies the ability to make payments over services such as RCS (Rich Communication Services) and OTT messaging as a key future driver of global CPaaS revenue over the next five years.

Messaging Technologies: SMS, RCS, OTT

A number of services can be considered as part of a CPaaS platform, including messaging technologies such as SMS, RCS (Rich Communication Services) and OTT messaging applications. Also offered are push notifications, voice services and email. However, Juniper Research believes the key to success for CPaaS platforms should not be measured by traffic, but by the number of communication platforms it can offer.

Despite enabling new capabilities, over 95% of CPaaS revenue will be attributable to SMS in 2020 owing to the ubiquity of SMS amongst mobile subscribers. However, by 2025, SMS will drop to 70% of revenue, as alternative rich media messaging solutions gain traction in the CPaaS space.

Emerging messaging technologies, such as RCS (Rich Communication Services), will begin to accumulate traffic share as operator and handset support increases. However, smartphone update cycles will limit adoption of the technology, thus limiting future RCS traffic. Nevertheless, the technology’s potential cannot be understated, considering the revenue that operators can achieve through implementation of the technology compared to the minimal investment needed to support it.

Juniper Research believes that CPaaS vendors and MaaP (Messaging-as-a-Platform) solution providers will have a significant role to play in the future roll-outs of these services. Companies, such as Infobip, Sinch, CM.com and OpenMarket will continue to act as the key link between operator networks and the brands and enterprises that wish to use them.

The monetisation of these platforms will become increasingly difficult. As the messaging ecosystem evolves, OTT apps will face competition not only from SMS, but RCS capabilities. Fragmentation of these apps will continue to be a primary hindrance in encouraging adoption by brands and enterprises.