CPaaS 101: Words from our CEO

Written by Guillaume Van Gaver, CEO, LINK Mobility Group

Edee Carey2021-09-22

CPaaS 101: Breaking Down the Complexity

CPaaS may sound complicated, but it need not be. Bringing in an experienced and global CPaaS provider allows the orchestration of omnichannel strategies to become easily managed as companies are in complete control of their customer interactions, communicating on the channel-of-choice for their customers. With this change in mind, the pricing framework for CPaaS will be a great indicator of how CPaaS will benefit society at large.

Within the next two years, I strongly believe that CPaaS providers like LINK will see competitive pricing options within the market. CPaaS will continue to mature with new use cases and opportunities for companies, leading to increased value being provided to the market.

The International Data Corporation predicts that the global CPaaS market will reach over $17 billion by 2023, with a compound growth rate of 39%1. Customer willingness to pay (WTP) will increase as the value provided to companies increases, for example, with:

  • Increased choice and complexities of orchestrating an omnichannel strategy

  • Customer use cases are constantly emerging and driving the market.

  • Having customer care and customer engagement on the channels of choice for customers becomes non-negotiable for brands.

  • Companies require a more sustainable communications portfolio and competitive advantage.

  • As companies recognize the value to their organization of digital transformation and having that winning omnichannel strategy with the adoption of AI.

The Way Forward: From Shifting Markets to Mindsets

As the market moves from A2P messaging to a CPaaS environment, there will be an incredible shift in the amount of value that we can add to the business of our customers. New channels like RCS and WhatsApp will allow us to solve new business cases, and on our end offer new business models based on value rather than volume. This is good news for LINK and our competitors, as selling volume automatically leads to commoditization and competition based on price. While this may seem beneficial to the customers, this means that innovation is also low, and value is overlooked at the expense of cost.

The innovation in our field is sometimes compared to moving from black-and-white to color TV but it is more like going from stereo radio to the internet. This is what makes the new chapter of CPaaS so exciting. When we can see how consumers interact with the messages they receive and new ways of interaction are made possible, the world changes dramatically. Business models going forward will be based on value: conversion to sales, click-rate, store visits, coupon usage, NPS, etc. This leads to competition on expertise and value rather than price alone; thus, driving innovation and mutual profits rather than the zero-sum game we have been playing up until now.

While these new business models will certainly come with their challenges, they will also set new rules of competition: placing value over price. And by doing so, tremendous growth opportunities are in reach for us and our customers alike.