Communications platform as a service is a digital enabler

The market for CPaaS is still in its infancy, but it is key to digital transformation in organizations

CPaaS is a digital enabler

Digital transformation has become a top-of-mind initiative for CIOs and business leaders for almost all companies in all verticals. It’s no wonder, as a recent ZK Research study found that digital organizations are 26 percent more profitable than their digitally immature peers.

Another interesting data point is that by 2019, 65 percent of workers will use a mobile device first for business purposes. Going digital means shifting to a mobile-first strategy.

Becoming a mobile-first organization is more than just building a bunch of standalone mobile applications that customers or workers can use. The process of switching between applications on a desktop is inconvenient, but most users manage. On a mobile device, having to constantly flip between applications while trying to remember data or cut and paste data is inefficient and can make users less productive.

That is particularly true for communications applications, as users are constantly switching between Facebook, short messaging service (SMS), the dialer, chat and business applications.

Communications functions needed

A better solution would be to either integrate more communications functions in the applications customers and workers use or to build application functionality directly into a communications tool.

Historically, using premises-based communications development platforms can be a long, expensive process because racks of infrastructure need to be procured, installed and maintained to deliver the required functionality. This is one reason why communications-enabled applications are still in their infancy.

The past few years have seen the rise of the communications platform as a service (CPaaS) market that enables developers to access collaboration functions such as SMS, multimedia messaging service (MMS), speech recognition, authentication, telephony, video and other functions from the cloud.

Initially this market was driven by startups such as Twilio, Nexmo, Plivo and Tropo (acquired by Cisco) but has recently seen many more established UC vendors, including Genband’s Kandy, Avaya Zang and RingCentral Connect, throw their hats into the ring. The ability to easily embed these collaboration functions into web-based and mobile applications can reduce costs and create new ways of interacting with customers, and it is key to transitioning to a digital business model.

For example, Box uses Twilio to build two-factor authentication (2FA) into its product. Box is one of the premier content-sharing portals and lets customers store content online, so users can access, manage and share it from anywhere. To add a layer of security to the files, Box built a 2FA solution on Twilio SMS that confirms the user is who he says he is before logging in.

Another interesting example is how KLM Royal Dutch Airlines uses Nexmo to communicate with its customers through Facebook Messenger and WeChat. Through the integration, KLM customers can get flight updates, check in for a flight and communicate with KLM support.

klm uses nexo

In both cases, the similarity is that the user’s experience has been greatly improved because he can remain in a single application rather than constantly switching between siloed applications.

CPaaS enables developers to easily create communications-integrated applications via a cloud platform. This opens the door to large software companies, corporate developers and the tens of thousands of small ISVs out there today. The market for CPaaS is still in its infancy, but it is key to digital transformation, and, as Donald Trump likes to say, “It’s going to be huge.”

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Copyright © 2016 IDG Communications, Inc.