Report:
Magic Quadrant for Communications Platform as a Service
How does Gartner define the Communications Platform as a Service market in 2024?
Gartner defines communications platform as a service (CPaaS) as a cloud-based platform used by developers, the IT team and other nontechnical business roles to build an array of communications-related capabilities using APIs, SDKs, documentation and no-code/low-code visual builders. The CPaaS tools facilitate access to multiple communications channels spanning voice, SMS, email, messaging apps, video and conversational capabilities, along with security. The purpose of CPaaS is to enable enterprises to improve communications workflows by providing simplified access to multiple communications capabilities. CPaaS enables enterprises to shorten time to market for new products and services, personalize communications, and orchestrate customer journeys across multiple channels. It delivers digital engagement and operationalizes customer experience, while also driving business efficiencies at scale with digital service delivery. It's modular/composable in design and can expand from initial single-use cases to many others as additional business units learn of its value.
Key Facts for Magic Quadrant for Communications Platform as a Service in 2024
- Publication Date: 24-Jun-2024
- Document ID: G00802876
- Coverage: Global
- Authors: Lisa Unden-Farboud, Ajit Patankar
- Core Purpose: CPaaS providers offer cloud-based platforms for developers and other business roles to build communication workflows that digitally operationalize customer engagement and experiences via APIs, SDKs, visual builders and AI. CIOs can use this Magic Quadrant to evaluate providers.
Strategic Planning Assumptions
- By 2028, 90% of global enterprises will leverage CPaaS to operationalize CX and engagement, up from 50% in 2023
- By 2028, 80% of enterprises using CPaaS for operationalizing CX will use GenAI-based conversational AI capabilities, up from 20% today
How was the Communications Platform as a Service market evolved in 2024?
- CPaaS market grew 9.8% in constant currency to reach $12.2 billion in 2023
- Market growth slowed due to economic volatility, with vendors focusing on profitability
- Leading vendors: Twilio, Infobip, Sinch, and Vonage positioned as Leaders
- Challengers include Bandwidth, Tencent Cloud
- Visionaries include Cisco and Tanla
- Niche Players include Mitto, Route Mobile, and Tata Communications
- SMS and voice remain dominant channels, but rich messaging formats like WhatsApp, RCS expanding
- GenAI integration emerging as key trend, with most vendors taking partnership approach
- Network APIs and telco partnerships expanding
- Security, anti-spam, and compliance capabilities increasingly important
- Pricing complexity increasing with added features like voice bots, chatbots, and GenAI
- Low-code/no-code visual builders becoming more prevalent
- Vertical and horizontal use case solutions expanding
What product features are required to be included in this year's evaluation?
- A standard set of core CPaaS communications APIs for: Voice calls
- SMS
- Local and global direct inward dialing (DID)
- Identity confirmation such as two-factor authentication (2FA)/multifactor authentication (MFA) and flash calling
- Rich communication messaging medium for at least one other rich communication such as Apple Messages for Business, RCS, Google Business Messages, MMS, WhatsApp or WeChat
- Email
- Customer service and support for CPaaS capabilities, including customer onboarding, technical support and usage dashboards
What are the common features of top products in the Communications Platform as a Service space?
- Messaging channel APIs, such as in-app/in-website messages and push notifications, Microsoft Teams LINE, Viber, Telegram, Instagram, Twitter DM, Discord or Snapchat, which can be provided with an omnichannel and orchestrated capability that may leverage AI (including GenAI)
- Conversational bots
- Advanced voice APIs for services such as emergency/E911 communications, contact center, audio conferencing, call queuing, IVR, music on hold, speech to text, NLP, call recording, sentiment analysis and branded calling, along with optional basic voice services such as click to call, WebRTC and calls from within apps
- Video, including programmable video APIs, such as video streaming, in-app video service and video know your customer (KYC)
- Advanced security and privacy, through voice-facial-finger biometrics, call risk scoring, SIM verification, silent mobile verification, call/delivery analytics, call tracking, dynamic route capabilities, anti-phishing and anti-spam, phone number anonymization/number masking, and KYC
- Programmable wireless, including e-SIMs, IoT-packaged solutions and 5G-enabled programmable network and communications APIs
- Network APIs, including one or more from those defined by GSMA's Open Gateway Initiative
- Other APIs for payments, CDP, CRM, AI and foundational/LLM models on the above-mentioned channels
- Advanced support through vendor marketplace, partner marketplace, visual builder, customer success programs, compliances (vertical/horizontal), developer activities (such as events, certifications, blogs) and support for horizontal (such as campaign management) or vertical use-case scenarios (such as banking, healthcare, logistics, retail)
Scope Exclusions
- Vendors whose offerings are predominantly focused on a specific CPaaS service, such as video or IoT
- Out-of-the-box software providers in such areas as UCaaS, CCaaS, and CRM, even if they provide APIs to manage those offerings
- Vendors lacking sufficient business outside specific regions to fulfill global requirements
- Vendors with directional changes away from CPaaS business model
- Vendors unable to provide sufficient information for rigorous assessment
Inclusion Criteria
Vendors must, among other requirements:
- CPaaS revenue of $370 million or more for 2023
- At least $10 million in revenue in at least three of four regions (North America, Latin America, EMEA, Asia/Pacific)
- Employee personnel and proof of operations in regions where revenue is cited
- Core CPaaS APIs for SMS, voice calls, local and global DIDs, phone number registration, identity confirmation (2FA/MFA), at least one rich communication messaging medium, and email
- Customer service and support for CPaaS capabilities
Ability to Execute — Relative Weighting
- Product or Service - High
- Overall Viability - High
- Sales Execution/Pricing - Medium
- Market Responsiveness/Record - Low
- Marketing Execution - Medium
- Customer Experience - High
- Operations - Medium
Completeness of Vision — Relative Weighting
- Market Understanding - Medium
- Marketing Strategy - Medium
- Sales Strategy - Medium
- Offering (Product) Strategy - High
- Business Model - Low
- Vertical/Industry Strategy - Medium
- Innovation - High
- Geographic Strategy - High
FAQs
Q: What does this research cover?
A: This research evaluates 13 CPaaS vendors that meet Gartner's global inclusion criteria (minimum $370M revenue in 2023, presence in at least 3 of 4 major regions). It assesses vendors on their ability to execute and completeness of vision across core CPaaS capabilities including messaging (SMS, rich channels), voice, video, email, security, conversational AI, and developer tools. The evaluation includes mandatory features and optional advanced capabilities.
Q: Who should use this research?
A: CIOs and application leaders seeking to drive digital transformation should use this research to evaluate CPaaS vendors for building communication workflows. It helps organizations identify vendors that match their specific requirements based on three core filters: capabilities needed, geographic coverage required, and compliance/regulatory support. The research is particularly useful for enterprises looking to operationalize customer experience, personalize communications, and orchestrate customer journeys across multiple channels.
Q: What are the mandatory features of vendors included in this market?
A: Mandatory features for vendors in the CPaaS market include: (1) Core communication APIs for voice calls, SMS, local and global direct inward dialing (DID), and phone number registration; (2) Identity confirmation capabilities such as two-factor authentication (2FA)/multifactor authentication (MFA) and flash calling; (3) At least one rich communication messaging medium (such as Apple Messages for Business, RCS, Google Business Messages, MMS, WhatsApp, or WeChat); (4) Email capabilities; and (5) Customer service and support including customer onboarding, technical support, and usage dashboards. These features represent the baseline capabilities required for inclusion in the Magic Quadrant.
Q: What are some reasons for not being included in this report?
A:
- Insufficient global revenue ($370 million minimum for 2023)
- Lack of geographic distribution (need at least $10 million revenue in three of four major regions)
- Missing core mandatory features (SMS, voice, DID, identity confirmation, rich messaging, email)
- Insufficient operational presence in regions where revenue is claimed
- Focus predominantly on a specific CPaaS service rather than comprehensive platform
- Primary business model as out-of-the-box SaaS solution (UCaaS, CCaaS, CRM) rather than developer-focused CPaaS
- Recent business model changes away from CPaaS
- Inability to provide sufficient information for rigorous assessment
- Recent divestitures resulting in insufficient geographic coverage
Q: What differentiates Ability to Execute vs. Completeness of Vision?
A: Ability to Execute focuses on current operational performance, including product quality, financial viability, sales effectiveness, market responsiveness, marketing execution, customer experience, and operational capabilities. It evaluates how well vendors deliver on their promises today. Completeness of Vision assesses future-oriented strategic thinking, including market understanding, marketing and sales strategies, product roadmap, business model innovation, vertical/industry focus, innovation capabilities, and geographic expansion plans. It evaluates vendors' understanding of market direction and their ability to influence future trends.
Reference
- Gartner, Magic Quadrant for Communications Platform as a Service, 24-Jun-2024, ID G00802876
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