Episode Transcript
[00:00:22] Speaker A: Hello. Welcome everybody. And thanks for tuning in to MetroSight, a podcast from Metrogy. I'm Beth Schultz, Metroji's Vice President of research and principal analyst responsible for CPAS research.
[00:00:34] Speaker B: Yeah, and hi, I'm Diane Myers. I'm the senior research director responsible for market forecasting and market shares vendor rankings. These reports are part of our annual metrocast service, which is a deep dive on the markets for different technology categories comprising the customer experience and workplace collaboration markets.
[00:00:53] Speaker A: Right. And so today we're here to talk about one of our latest Metrocast deliverables, and that is the 2024 CPAS Metro Metrorank report.
And this one follows on the CCAS Metro Rank report that we published earlier this year. And if you want to go back and listen to what we said about CCAS market, you can check out episode 67 for a recap on the top providers in the cloud contact center market.
Okay, so before we share highlights on the CPAAS metrorank, let's just talk a little bit about what cpas is adoption and then market sizing. So in terms of how Metrogy defines CPAAs, we really look at it as a development platform or a low code, no code solution. All about bringing communications functions like click to call and SMS messaging. You know, those are the very basic ones for things like appointment scheduling, notifications, et cetera.
And there are certainly more sophisticated communications APIs that are part of CPaaS now as well, and things like AI analytics, those advanced functionality becoming very core to a lot of the communications APIs as well. And then these CPAAS platforms, they also enable customized integrations, a lot of automation. And really the key is that these platforms, they really have become, and they must be very highly flexible, Right? They've got to scale to, you know, millions and billions of transactions.
And increasingly we're also seeing the CPAAS platform providers sort of try to morph into bigger customer engagement platform providers and not just, you know, focusing exclusively on those communications APIs.
[00:02:54] Speaker B: Yeah, so let me switch gears a little bit and talk about kind of what we see in terms of adoption and kind of market size and forecast around CPAs. So within Metro G's customer experience, Metrocast, the 220, the 2024 study, which we went out and surveyed over 1500 enterprises and small businesses all, you know, across North America, Europe and Asia Pacific.
And what we found was, and this really underscores the value companies are seeing in CPaaS, right, to customize their customer engagement features and add cloud based apps for improved customer experience. So the statistics show us, right, in terms of the adoption, that 60, you know, roughly 68% are using or planning to use CPaaS by the end of 2024. This survey was taken. The study was done earlier in the year. Right. So I know we're at the end of 2012, 2024 now, but this was done at the beginning of the year.
An additional 17% were planning for adoption in 2025 or evaluating, you know, should they even use CPAs? Was there some value there? So really that's just around 10% of companies that really have no adoption plans, that have kind of just, you know, it's not on their radar at this point. So we also do market shares, and we do. And we do the market shares quarterly, but we also do the forecasting. And what we've published is the Global market for CPAs was $13.6 billion in 2023, which is up 19% over 2022. And we are forecasting the market to grow 11% on a compounded growth rate from 2023 out to 2028, where we forecast the market to reach 22.5 billion. Okay. So the market is really competitive. We have, you know, we have. We have a whole variety of different providers from different sizes, capabilities, standalone, you know, kind of pure play to embedded within larger, you know, technology vendors. Some are global and some are very focused on our region or our country. So it's really, you know, it's a real variety of different companies that I, as a developer, I, as a. As a business can go to. To get the, you know, the APIs.
[00:05:23] Speaker A: Yeah. You know, one thing I wanted to add, Diane, because I think it's worth noting, around our annual adoption figures, they have been sort of. Not sort of. They have been fairly stable year to year for the last couple of years.
Although, as you say, you know, the market is growing. So I think what this really kind of speaks to is sort of that very.
That land and expand motion really does characterize the CPAs market. So in other words, you know, once a company picks up CPAs for one use case, we see them adding more and more use cases, whether it's to address, you know, new business needs entirely new business needs, or maybe one product line has adopted, say, SMS to reach out to customers, and then another product line does that, or maybe they're using CPAAs in the US and then they expand their use of CPAs to other regions. So for providers, this is this kind of a. The challenge for them is sort of twofold. They've got to be that that provider that companies expand with or they have to be the provider that company begins with and brings on as use case needs grow. So we've seen, as I said, as I said before, then one of the things we've seen CPAs providers do as they expand and as they try to capture more of that enterprise attention is to move up, stack and to become more full pledged customer engagement platform providers and then also expand into new regions and then others are growing by acquisition.
Anyways, before we run down which CPAs providers made our ranking and why, we should talk about the methodology. Diane, you want to take that over?
[00:07:10] Speaker B: Yeah, so, yeah. So in terms of methodology, right. We actually we have a very set methodology that we utilize across all of our Metro Inc. Reports. Right.
And so it starts with market share, right. And so to even be in the market share, you know, to be in the top 10, we're looking at the top 10 market shares. And in the case of the CPAs, we're looking at revenues, right. So what were their CPAs revenues at the end of 2023? It was just the easiest benchmark. We did it there. We look at financial strength, right? So we use a few core financial metrics that we take from reported financials. If they are privately held company, we give them an opportunity to give us data to be able to correct, you know, to accurately reflect their scoring in this space. But that is up to them as privately held companies. Market share momentum is really how did their market share grow or contract in 2023 relative to the rest of the market?
[00:08:19] Speaker A: Right.
[00:08:19] Speaker B: Or the rest of the peers? Right. You know, were they expanding market share? Were they growing faster than the market, you know, or were they growing a little bit less than the market? Market share momentum.
We have two other scores, Customer sentiment and business success, that are taken from our study data that I, you know, that I mentioned a few minutes earlier. And that's really when a survey respondent says, Yep, we use XYZ as our CPAs provider. And then we ask them some further rankings, right? How do you view your vendor in this category or that category? And how successful are you using? How successful are you with business? You know, define business metrics by using those platforms, right? And so that's our scoring there. And then we look at product mix. We, you know, it's a checklist, right? Do you have these capabilities or do you not? And those really do vary by area, right. So in this case CPAs, we're looking at what are their APIs across a lot of the different APIs, right? So we drill down into, you know, messaging APIs, all the different channels, you know, what are the real channel APIs, right. We look at functional APIs and so, and you know, across the board, right. And every year, you know, this is our second year doing this report, we take a new look, right? What are, what's coming up, what's kind of on the horizon and what's kind of, kind of above and beyond in terms of APIs in this context. And we look to see who's doing that. And that can often set a provider apart from others. So that's the process, right? And there's different weightings and you know, and you know, if you get the report, you can look at all the details of the scoring, but those are the different categories. So let's talk about who, you know, who are the top 10 this year, right? And so to be even in the top 10, right, to get that further level of scoring that I just described, you have to be a top 10 market share provider. And we are looking at this on a global basis. And so number one was Twilio, right? So Twilio is the market share leader, right? They have the largest market share, so that really gives them a nice bump. But they also have had the strongest scoring possible with customer sentiment, product mix, customer business success, and that really kind of stood them in good stead. They would also, they also had average financial strength, which helped them out, right? That was definitely an improvement over a year ago.
Infobip was number two. They also earned the highest possible score in product mix, customer sentiment, as well as kind of above average scoring in market share.
They are actually the third largest CPAs provider in terms of market share and really above average customer business success.
So the number three provider is Cisco. So Cisco, they're really, really where they stand out is they have the strongest possible financial strength, right. No one else even touched them in terms of strength. But they also had above average scoring in product mix and also customer sentiment. So they are one of the smaller, right? They're kind of down closer to the bottom of the, of the top 10.
And so, you know, they don't have this large market share and their market momentum is average, right. They're just right in there on the market side. But the financial strength is really what put, you know, really gives them the big, the big push to number three.
Number four is Vonage. And I think what's worth noting about Vonage is that this year they moved up three notches from where they were in the report previously year. So they were in the number four spot this year. And that was really their financial. So Vonage is owned by Ericsson. So this would be Ericsson's financials. They didn't score the highest score, but they scored quite well and that gave them a really important, an important improvement in their overall scoring.
So let's see, other product.
They also score the highest possible in Product Mix. And also in, they scored well in, let's see, customer sentiment. So above average on the customer sentiment. So, you know, a combination of all of that really did well and, you know, put them into a nice strong fourth position. So let's round it out with number five. And that's Cinch. So Cinch rounds out that top five and they are the second largest CPAAS provider in terms of market share.
They have above average positioning. Well, first of all, they have the highest possible score in Product Mix. Right. So they're the second largest market share. They have the highest possible score in Product Mix and they are above average in terms of customer business success and market momentum. So really, you know, they're doing quite well.
You know, there are a couple areas that kind of drop them down, but overall they've got the product, they've got some activity around customer business success and you know, and doing well on the, you know, following the market in terms of market momentum. The next five, right, so we do 10. The next five are bandwidth.
Bandwidth is the second year in the report. So this is not in order of who they are. This is just alphabetical order of the remaining five. Bird, who was formerly Messagebird. They are, they were second. You know, this is the second time again I'm in this report.
Link Mobility. They are new to this year's list along with Route Mobile. They're new to the list. And tada. So TADA itself is new to the list, but they had bought Clara and Clara was in the list in 2023.
[00:14:32] Speaker A: So Diane, thanks for running down those sort of the down and dirty details of why those top five made it and then fleshing out the rest of the list for us. So as Diane pointed out in that bottom five of the top 10, a lot of those companies did carry Forward from our 2023 ranking. In fact, all but two of the companies in the 2024 report were in the 2023 report. Although some of the rankings shifted, you know, their placement in the ranking shifted. So the two companies that didn't make the list that were on 2023 are 8 by 8. So 8 by 8 was seventh last year.
Its market share fell below the minimum required to make the cut in 2024.
That's not to say the company is not doing well with CPAs. It has seen significant growth in CPAs, particularly fueled by a new go to market strategy and some portfolio updates. And CPAS 8x8 comes to CPAS primarily through its acquisition of Wavesell, which is a Singaporean company. And it really is focused today on that Indonesia and Singapore market.
The other company that didn't make the list is Alibaba, a big Chinese provider.
We opted not to include Alibaba as well as Tencent, which also would have made the list by market share. We opted not to include those Chinese providers in this year's list because we do not solicit feedback from customers in China for our CX Metricast study. And that forms the basis of two of our scores, as Diane explained, customer business success and customer sentiment. So we opted just to avoid that issue by not including the Chinese companies besides Tencent, other sort of CPAs besides Tencent and Eight by Eight, I should say other CPAS providers that we're really watching closely, they're doing interesting things, have good, strong presence in their regional markets include Gupshop and Tanla. Those are both Indian companies.
Gupshop has grown into a global provider. It's also extending into new areas, doing things with chatbots and conversational tools. For example, Tanla has widespread presence in India. It's got a growing footprint elsewhere. It has deep communications API portfolio. It's really differentiating itself on security. And then it has a complementary customer engagement platform. And then the other company I think worth noting is Plevo. And Plevo's evolved from messaging APIs to application solutions for things like customer service support, et cetera. And Plevo owns its own network infrastructure. So just a couple of rather a few companies that we're watching and beyond those that made the ranking.
Yeah.
[00:17:54] Speaker B: So I think, you know, as I recap, right. And when I think about what's happening in the CPAs market, I just want to mention a couple trends that have really popped and also point you to, if you listen to this, we have the market shares and we have actually published quarterly market shares for Q1 and Q2. Q3 will be coming here later this month, probably early December, including for the CPAs market. And we see the companies out of India, out of China, doing really, really well. Right. So while we have companies like Twilio and Cinch and Infobip in Europe and some of these companies that have been around for a long time, it's really kind of striking how much and how fast these two other kind of markets are really growing for CPAs. So I just want to, you know, kind of mention that and, and just to also point people to, to those. Now you might see I'll just, you know, kind of preempt this that if a company is a privately held company or if they give us data, you know, if it's a large enterprise that has CPAs data that is not publicly, you know, they do, they do not want that data made public. We do not publish that data in our market shares. That that is put in other we know what that is, but we will just not have that publicly available. So I just wanted to let you know that. And you know, and you know, market share as I'm mentioning is really the number one kind of, you know, importance in terms of when we think about leadership. Right. You know, when we think about this Metro Inc. Report, it is to discuss leadership and overall, you know, market share is number one and financial strength is the other one that we give a little bit of extra weight to. And I just want to people always wonder, well, do you know, do customers care about financial strength? You know, do you know, if a large company has a little bit less financial strength than another company, you know, doesn't mean they're going under. But we look at it from a couple different perspectives and I think it's important just to mention here because it comes up and that is to say that financial strength gives you the ability to continue to invest, right? To invest in your service, to invest in the customer support, to invest in your channels. And so financial strength isn't just important maybe for an enterprise that's looking to partner with, you know, or looking who their supplier is. It's also, you know, how will that company move forward and continue to grow and expand. So I just want to mention that in terms of that. For more details right on the MetroRank report and the overall MetroCast service, please go to the Metro G website at www.metrogy.com. so next up we are within the MetroCast study is that we will be publishing UCaaS MetroRank and our Q3 market shares for all of the CX. And we're also finalizing in getting ready all the collaboration market shares and updated forecasts. So that's what's coming before the end of the year.
[00:20:56] Speaker A: So thank you Diane, for sharing all about the CPAs Metrorank report, sharing what's coming up, etc. Attendees, as always, we do love to hear from you, so feel free to reach out to us via the contact button on the Metro G website.
And for now, that's all on behalf of the Metro G team. Goodbye till next time, and take care, everybody.
