Cloud communications solutions, from Unified Communications as a Service (UCaaS) to Contact Center as a Service (CCaaS) and embedded Communications Platform as a Service (CPaaS), have never been more relevant and highly valued as they are today after being tested to their limits during the pandemic.
Many MSPs were heroic in immediately responding to the needs of their customers, including some who transformed how teams were able to work from home in a very short period – sometimes over a week and even a weekend. Other MSPs supporting large, distributed enterprises stepped up to accelerate digital transformation projects, in one case replacing a dated phone system connecting thousands of retail branches with a full-cloud solution integrated with their eCommerce platform, making it easier to adapt to online ordering, touchless delivery, and curbside pick-up.
Necessity was, indeed, the mother of invention, and those MSPs who embraced innovation grew their businesses despite COVID-19, transforming not only their customers but transforming their own operations as well.
Today, there are new challenges, including the “Great Resignation,” compelling enterprises to provide tools that empower Work from Home (WFH) employees with an engaging and “human” online experience, so they can collaborate with their peers and serve customers, while also reducing costs and contributing to CX innovation.
According to The Insight Partners, the global Cloud Communication Platform Market is poised to grow from $4.6 billion in 2021 to $22.4 billion by 2028, representing an impressive CAGR of 25.3% between 2021 and 2028.
This recently published analysis focuses on how cloud communication platforms allow developers to leverage “telco APIs,” application program interfaces, which allows them to build dynamic communications solutions, including SMS, voice, video, and verification features.
“The rising trend of bring-your-own-device (BYOD) with the emphasis on offering flexible work options is favoring the cloud communication platform market growth,” the introduction to the report says. “Rising BYOD policies at the workplace overburdens the communication networks at workplaces, and the deployment of cloud communication platforms helps solve the network congestion issues. Surge in demand for connected devices and the increase in the adoption of IoT and cloud-based services are major factors driving the market growth. Furthermore, the speed of internet connections is a key factor governing the cloud communication platform market growth.”
Leading MSPs are seizing the opportunity to accelerate digital transformation initiatives as more of their end customers become comfortable with voice, video, messaging, and collaboration applications that are 100% hosted and accessed via the cloud, requiring only a reliable, high-speed Internet connection or redundant connections for those industries that are regulated and demand “always on” real-time communications environments.
“We continue to see substantial interest and growth in the cloud communications offerings on our marketplace,” said Amanda Lee, CVP of Global Communications at Pax8, a privately-held “unicorn” company valued at over $1 billion which earlier this year closed another $185 million in investment in a round led by Softbank Vision Fund 2.
Pax8 operates one of the fastest-growing independent cloud marketplaces for IT professionals to buy, sell, and manage best-in-class technology solutions. The company has cloud-enabled more than 250,000 enterprises through its channel partners and processes one million monthly transactions. Its technology enables MSPs to accelerate growth, increase efficiency, and reduce risk, and it has ranked in the Inc. 5000 for five years in a row.
“We witnessed a perfect storm for MSPs during the pandemic years, as their customers had no choice but to quickly set up infrastructure and services to keep communications flowing internally and externally,” Lee said. “With more powerful and affordable smartphones and the growth of 2G/3G/4G wireless networks, the quality of the experience and the impact on productivity and efficiency has led to more confidence in cloud communications and has ignited innovation and competition among UCaaS vendors like those on our marketplace.”
The Pax8 marketplace currently has several categories of products and services (Communications, Continuity, Security, Infrastructure, Networks, Operations, and Productivity. The Communications partner portfolio includes 8x8, Call2Teams, Exclaimer, Five9, Microsoft, Nextiva, RingCentral, Talkdesk, and Zoom).
The unified global communication as a service market size was valued at $38.74 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 23.6% from 2021 to 2028, according to Grand View Research.
This growth runs in parallel with the growth of managed services, as nearly every application, including Unified Communications, is offered as a service. This vibrant market – the market Pax8 serves – is projected to reach $354.8 billion by 2026 from $242.9 billion in 2021, according to MarketandMarkets.
“The growing number of employees working from home is prompting companies to implement UCaaS, a trend that was stoked by the COVID-19 pandemic,” Lee explained. “What decision-makers learned is that UCaaS works very well, at a much lower operating cost, while bringing more value with solutions including multi-media collaboration with applications like Microsoft Teams, Zoom, and more.”
Lee believes this is just the beginning of innovation in real-time communications for the business space.
“From sentiment analysis to behavioral tracking associated with productivity – by the individual – AI has already made a huge mark in the UCaaS arena and is differentiating various vendor solutions,” she added. “AI for contact centers, for example, is enabling companies to mine data, including voice and text conversations and comments, that can be used to improve products and services with analytics and insights. This is a very dynamic, creative, and exciting time across all major industry verticals, and MSPs are enjoying tremendous revenue growth and deepening relationships with their customers as a result.”
UCaaS is leading to CPaaS (Communications Platform as a Service), designed for developers who can use a low-code or no-code platform to spin up compelling communications experiences, including those directly embedded into websites, kiosks, mobile apps, and ERP systems, Lee said.
“At Pax8, we pride ourselves on tracking trends and bringing new innovations to the MSPs we serve, so they can serve their end-customers better and grow revenues profitably,” said Lee. “The communications offerings on our marketplace are constantly evolving, as each vendor rolls out competitive new services, and new solutions designed for specific vertical markets (for example, telemedicine for healthcare) come into view.”
Edited by Erik Linask