Episode Transcript
[00:00:22] Speaker A: Hello, everybody, and thanks for tuning in to Metrosite podcast from Metroge I'm Beth Shultz, Metrogy's vice president of research and principal analyst.
[00:00:33] Speaker B: And I am Diane Myers. I'm Metroge's principal analyst, responsible for all of our market forecasting and vendor rankings. And we are here to actually talk about one of the vendor ranking reports. So, which is all part of our annual Metrocast service where we do a deep dive on different technology categories across customer experience and workplace collaboration.
Today we're going to talk about the report we published right at the end of the year. We got it out right before the break.
[00:01:05] Speaker A: Snuck it in there.
[00:01:06] Speaker B: Yeah, we snuck it in there.
But I'm really excited for this report. And it's our 2023 cpas Metro rank report. It's a third vendor ranking report we did this year, I guess at the end of 2023, following CCAs and UCAs. And yeah, it's a market that I don't think it gets as much attention, right? I mean, a lot of people talk about CCAs and UCAs, and that's always what people are interested in. But I think there's actually much more interesting kind of vendor dynamics right, in the CPAs market.
So, Beth, why don't we start off by actually letting the audience know what we really mean by cpas and how we define that?
[00:01:53] Speaker A: Yeah, I mean, CPas has been one of those technology concepts that's been around for quite a long time. But a lot of people took a long time to come to terms with what it is and what it allows. And often now it gets wrapped into, particularly ccas. So it's a little hard to separate the two sometimes even.
But in terms of how metrogy looks at it, we think about cpas as a development platform, or increasingly now, a low code, no code solution.
And the whole purpose is to bring in communications functions via API so programmatically into your workflows or your other applications. Simple examples are your SMS messaging and your click to call for doing things like appointment scheduling or chatting with your Uber driver, or whatever it might be.
But increasingly, as companies advance, as vendors advance, we're seeing the introduction of advanced functionality via API, especially things around analytics in AI and then using APIs. We can also do a lot of customized integrations or automations into our, particularly our customer engagement workflows. And then I would also just add that cpas platforms, they have to be very flexible. They have to be capable of scaling to really millions or maybe even billions of interactions, particularly when you're talking about messaging, while also today being able to support really customized customer engagement that companies are wanting to do.
[00:03:42] Speaker B: Yeah. So I think it's good to, before we start delving into the companies that made up our metro rank to kind of talk about the statistics around the market size and where we see the market going and the adoption trends for cpas. So part of our study is a global survey and we delved into cpas within our customer experience study for 2023. And we're going to be updating that here in 2024 where we had almost 1700 companies globally, North America, Europe, Asia Pacific. And we asked, right, so we found out that as of this was almost a year ago. Right, so this is in early 2023, a little over 38% of our respondents were actually using cpas. Right.
As an application within their customer experience portfolio. So a little bit more than a third and then another third, almost 33% had plans to adopt it by the end of 2024. We'll see, right. Because we're going to be launching the next survey here soon. We'll see how that played out. Right. So where we went from that 38 and a half percent up to did we hit 60, 70% throughout 2024? We'll see where we are at that. And then another 1213 percent were evaluating it above and beyond companies who were looking to adopt it in 2024. So good adoption. More than a third, and then another third looking to had plans to adopt it last year. So that's a really good size of a user base. And I will say the other piece is that we do forecast the market. We forecast it by geography, by the four major geographies, and by company size. And cpas had a really great year in 2022. And it was looking great as we were looking through mid year of 2023.
In 2022, the market grew 28% year over year.
It will not be 28% in 2023. Right. Based on looking at how some of the big publicly traded companies were trending, but still really good growth, we are expecting. We did forecast a 12% compounded annual growth rate from 2022 out to 2027. So it's a five year kgar for it to reach $16.1 billion by 2027. So this is a substantial and important market. Right. But it is also highly competitive. There are a lot of providers, some of them are global, some of them are regional. But we are finding, and we are seeing still lots of continued mergers and acquisition. Right. As a lot of the companies, varying companies, try to get into the space and try to have this as part of their offering. And also, just as some of the smaller pure plays need the scale and the R D capabilities of larger, you know, continued M A in that know, do you want to talk a little bit about the methodology or do you want me to kind of delve into that methodology piece of this?
[00:06:56] Speaker A: Well, Diane, you are the master of. We did work on this report together, but you are the master of the metrocast methodology. So why don't you go ahead and explain that to our listeners?
[00:07:06] Speaker B: Yeah, let me just. At a really high level. So for people who have not listened, Beth and I did a podcast or one of these for the UCAs and the CCAS reports. And the methodology across all of our metro ranks is very consistent. Okay. So I just want to level set that to get into the report and for us to delve in into more detail. We determine the top ten based on market share. And in this case it's revenue. Market share. Right. Because the APIs are taking from lots of different pieces. Right. They can be messaging, they can be voice, they can be email, they can be lots of different pieces. So we use revenue as the market share piece, the component. And then after that we look at financial strength. We have a handful of financial metrics that we use that we look across the board in whole to figure out financial strength. We look at the product mix. Right? So it's just a checklist. Right. It's like, do you have this? Do you not? Do you have this? Do you not? And then that creates a score. We have two customer related categories, customer sentiment and customer business success. That is taken from our study data from our survey. So customers of each of the individual companies, how they rank the companies in terms of on the customer sentiment side, are they doing what the customers want them to do? Right. Are they succeeding in innovation and in the product set and in their own customer service? Right. And how are they succeeding in business?
By using these various technologies. And then the last category is market momentum. And that's really, are you growing market share or declining in your market share? And how are you doing that relative to the rest of the providers? Right. So are you growing faster? Are you going slower than the market? If you're going faster, then you're going to have a little bit of higher. Me, I think the best way to do this is we're going to take the top five and we're going to discuss each one. And I'll start off and then we'll have Beth, you can jump in, but info bip. Info bipip. And we have a press release on this. So you can definitely go out and see this and find this. It's on social media, it's on our website with a little bit more detail. So I'll just give that as a plug. But Infobit was number one and they really excelled. So first of all, well, before I go into how they excelled, let me talk about their market share, right, because that's the inclusion piece, right? So they are the second largest provider. Right. They have the second largest market share, second to Twilio. Right. So Twilio is number one in market share. But Infobip had the second largest market share. So that was substantial. And then kind of where they excelled was on customer sentiment. They had the highest score possible on customer sentiment. So their customers are really happy. They're really happy.
No one else scored as high as info bip on customer sentiment. So that really did give them an edge. They also scored the highest possible score.
Another company also got this top score for the customer business success. So their customers, infobit customers, are having business success across a couple of different metrics. Relative to everybody else, they had above average market momentum. Right. They weren't the highest market momentum, but they definitely had above average. And then the other category, and I probably turn this over to Beth a little bit because Beth, you know this a little bit better, but they had the highest possible score on product.
They, they were above and beyond anyone else on the product side. And so maybe know you want to touch a little bit on Infobip and where they are finding success in that way.
[00:11:01] Speaker A: Yeah, I mean, infobip is an interesting.
[00:11:03] Speaker B: I think.
[00:11:06] Speaker A: If anything, surprised, mean, I understood Infobip was a strong cpas provider, but that it came in number one, that says a lot about what it's doing.
As you mentioned, product mix is a particular strength of it.
It caters to global businesses globally. Right. And so it has got a really wide array of messaging APIs that it brings into its portfolio to support all of those markets, whether it's the asian market or the north american market or the european market.
It has a really strong building on top of those APIs. It has a really strong application solution set.
And it's starting to do a lot with AI as well.
[00:11:59] Speaker B: That's probably more on the messaging side than anyone else, right? They had the most comprehensive. I mean, I don't think anything stood out like, oh, they're the only one that has know, like Viber, for example, or WeChat or Apple messages. But if you looked at it across the board, no one else had.
[00:12:20] Speaker A: Yeah, absolutely. They really chalked up a lot of.
[00:12:24] Speaker B: Points there.
[00:12:28] Speaker A: And just a real strong that they go after enterprises as well as smaller businesses.
They have a good base among digital native companies. So it's really kind of a well rounded global player for cpas. And I think we'll be hearing a lot more about infobip going forward within north american market as well. That's one of their focuses.
[00:12:53] Speaker B: Yeah. Because they haven't historically had the, I guess maybe not presence isn't the right word, but maybe the awareness in North America, like some of the other companies have. Right. But they've been very strong in Asia. Yeah. Right.
[00:13:05] Speaker A: They're european based and so North America is one of their focuses moving forward.
[00:13:10] Speaker B: Yeah. So it'll be exciting to see how things progress for them in 2020. Absolutely. I think we'll later talk about companies that didn't make the top ten as ones to watch, but I think even the ones in this top ten and someone like Info Bipip, it's exciting to watch too.
[00:13:27] Speaker A: Absolutely.
[00:13:29] Speaker B: So number two on our list was Cisco. And that might be surprising for some. Right. Because they are not a top five in market share. Right. They're definitely much lower on the list for market share, but where they excelled and what really, I'm going to just touch on a couple of things on what really kind of set them apart was number one, financial strength. They had the strongest financial strength of anybody on the list. They had the highest possible score. No one else had the highest score as they did. And that gave them a big boost. And financial strength is not weighted the highest. We do weight certain categories, but it is still heavily weighted. Right. So they have really strong financials. So that gave them the biggest boost. But the other category worth noting, while Infobip had the highest customer sentiment score, Cisco and a couple others were right below them. So well above average.
And that really also gave Cisco a really good, I think, jump from not a leading market share position, but financial strength coupled with really strong customer sentiment really was the clincher for Cisco. Marketum was average customer business success was average. They had above average product mix. So they're definitely doing well on the product mix side. But really the financial strength and the customers. Right. The customers just really rating them highly.
[00:15:06] Speaker A: Yeah, we've seen, I mean, Cisco always kind of play, I shouldn't say always, but they had API plans, development platforms. They really kind of kicked into higher gear when they acquired IMI Mobile. And I think within the last, maybe two years, really the last year, we've really seen them sort of get kind of things clicking with the IMI mobile team now being Webex connect and bringing greater focus to the role that they want to play within Cisco, which is really all about sort of that customer engagement and supplementing what they do on the CCAs side.
[00:15:48] Speaker B: And I keep hearing, right, just anecdotally, right, when you're out, we're out talking to competitors of Cisco or other players in the market, in enterprises. Cisco's name keeps coming up. Right. As someone that is, they're showing, you know, they're in the enterprise deals. Right. And that's really where their strength is on the enterprise. Right. Versus maybe standalone developers. Right. Like if I'm a standalone developer or I'm kind of a pure play company, I may not be using Cisco, but on the enterprise side, they're in there and they're always part of that shortlist, it sounds like. That's absolutely right.
I think that will build into their momentum for 2024.
[00:16:27] Speaker A: Yeah.
They're having some success, a bit of success with their whole sort of branded messaging idea and allowing companies to have sort of a more trusted and secure kind of relationship with their customers as they're sending them text messages with those branded messages. So that's been one of their focuses. And I think they're seeing some fairly good success there.
[00:16:55] Speaker B: Yeah. So that leads us to number three, which is Twilio. Right. And Twilio has the number one market share. Okay.
Twilio is synonymous with cpas. Right. I don't think anyone thinks cpas and they don't think Trilio. Right. That is the name that is always front and center when we think about this market.
[00:17:18] Speaker A: Absolutely. One of those original pure plays, for sure.
[00:17:22] Speaker B: 100%. Right.
They weren't the only ones. Right. There was absolutely other companies. Their strength was in North America. They were like a Wall street darling. Right.
In terms of ipos, and they grew really fast. But obviously, we had companies like Infobip that were plugging away and doing things like in Europe, and there was others that became acquired. Right. We had a lot of activity elsewhere, but Twilio, I mean, just anonymous. Right. And so then the other piece that I think is important to really look at in terms of where they had their strength is in market momentum. They had the strongest market momentum score above and beyond anybody else. So not only were they the market share, which sometimes it's hard to have momentum when you're the largest, but they did. They continued to grow. We'll see how it looks in 2024 when we get all the numbers here in the next few months.
But they were below average on market financial strength, which kind of bumped them down a bit. Right. They were just a little bit above average on product mix. They're right in there. They're not as high as Infobit, but they're right there with the Cisco's and a few others. And then the customer sentiment was just around average and a little bit below average for customer business success.
Then there is cinch. They are number four. And Cinch is a little bit different, right, because they've had some mergers and acquisitions. For sure. They are the number two. No, sorry, number three. In terms of market share, right after Twilio and Infobip, Cinch had strong, really strong financial strength. Not as strong as Cisco, but right below Cisco. So that really helped cinch. That gave them a great boost. They were average for market momentum, above average, kind of right where Cisco and Twilio were with product mix and customer business success. Along with Infobip, they had the highest possible scoring for customer business success. And, Beth, I don't know if you want to say anything about cinch, just.
[00:19:46] Speaker A: That, you know, it really did come out with a messaging strength and very similar trajectory as your Twilio's and your message words and other companies that are kind of moving into fuller.
[00:20:00] Speaker B: So then I guess to round out the top five, right. And that would be know kind of a little bit lower on the list in terms of market share. Right. They're a little bit ahead of Cisco, but we're kind of right in that same range as Cisco.
Kind of average market strength, average market momentum. They were kind of right on the average for product mix and everything, right? They were like this. And so you think about number five, right? That's kind of like the middle, right?
And that's kind of how calera was. Right. They executed.
They were right. Just maybe a little bit ahead of the game on financial strength, but kind of just right on average. They were that typical average company in our scoring, and I guess that played out as number five. And maybe there are some interesting things going on with Clara that. Beth, I'll let you touch on. Sure.
[00:20:57] Speaker A: Yeah. We'll be definitely watching Calera. I mean, the company itself came out of the italian.
Really strong history with italian banking system providing messaging services kind of grew through acquisition.
Calera itself was acquired last fall by Tata communications. And so we'll be kind of watching to see what Tata does with calera, kind of supplementing what it had already been offering with cpas.
And that takes us through the top five and Diane, we just have one or two minutes left, I think, so we really should probably just kind of talk quickly about the rest of the providers. We have eight Bayite, Alibaba, bandwidth, Messesburg and fondage round out the list. Anything you'd like to share on think.
[00:21:47] Speaker B: You know, when you look at that list, right, they're very different kind of companies, right. Eight by eight is definitely a ucAs, ccAs. The asvonage now is part of Ericsson very large vendor and with a big focus on the CPAs piece and especially marrying that up with Ericsson specialty in networks and carriers around the world and Alibaba obviously their strength in China and in. So really I think the takeaway, when I look at the top five and even when I think about we'll touch on this real fast at the end, is who else to watch? Is that going to cpas? If you are an enterprise or if you're a developer on the API side, is that the path is not always so clear on who you're going to use and why the vendor you decide to go to. Right. So I think if you are a buyer in evaluating, there's lots of very different options. And so one size may not fit perfectly for you, but you're likely to find someone that does because they are coming from different disciplines and depending on what your needs are, you're likely to find a good provider.
[00:23:01] Speaker A: Absolutely.
You mentioned others that were watching. Let me just quickly go through those and then we can wrap up.
We've got three on our watch list, and as Diane said earlier, all of the top ten deserve close watching. And there's so many other players that who knows where we'll end up last year? But three I'll mention are Gupshop.
They are out of the indian market providing messaging services.
They have evolved into a larger offering with a conversational engagement platform and grown globally as well. So they're on our radar. We also have another pure play on the list. That's plebo. They too have evolved out of a messaging API business and they are starting to roll out application solutions as well, particularly for customer service support and then customer service support teams. And like some of the others on this list, Plebo owns its own network infrastructure, so that gives it an advantage as well. Then the last company that we're watching is Cineverse. And Cineverse has a heritage in providing mobile and telecom services. So mobile messaging is one of its strengths, but it is increasingly targeting the enterprise buyer.
We'll be keeping our eye on those guys.
[00:24:29] Speaker B: Yeah, I would just maybe to wrap up right, is that there's a lot more details on this report, as I had referenced, right, that we have on the website. It's on our social media. You can find it on LinkedIn and X.
I would say we are working on doing these metro ranks again in 2024.
We're getting ready to launch our customer experience metricast study, which will help us update on the forecasting and the metro rank. So I think we have a lot of great stuff coming out again in 2024 and really looking forward to tracking and seeing how all of these companies that we've been evaluating kind of fare as we go forward.
Absolutely.
[00:25:13] Speaker A: You have a busy year ahead of you.
So thanks, Diana. It's been fun talking about, it's been fun working with you on this report. And great to kind of recap it for our listeners today. And listeners, if you do want any more information on our metrocast service in general or the CPAs Metro rank, please go to ww metrogy.com and you can find out information there. As always, we're happy to hear from you, so feel free to reach out to us. You can use the contact button on our site as well. And that's all for now. So on behalf of myself, Diane, and the rest of the team, goodbye till next time. Take care, everybody.
