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Frost & Sullivan defines Communications Platforms as a Service (CPaaS) as any cloud-based platform that enables developers to programmatically embed voice, video, chat, and messaging services within their business or consumer applications. In nearly all cases, the embedded communications and collaboration services leveraged through a CPaaS are a feature of the larger application and are rarely the primary focus of the application. For example, consumer-focused ride-sharing applications require a means for a driver and passenger to connect via SMS or a voice call. CPaaS can be leveraged to deliver the communications features of the application, enabling the developers to focus on the mission-critical aspects.CPaaS solutions represent a significant departure from the way businesses of any size have become accustomed to purchasing and deploying communications. Their value proposition lies in providing a powerful toolset to make business communications applications richer and more tightly integrated within business workflows. CPaaS provides additional capabilities alongside a business’s existing communications infrastructure. Like other cloud-based services, most CPaaS solutions offer businesses a compelling operating expense (OpEx) alternative to costly capital expenditures (CapEx) to deploy the appropriate communications and network infrastructure needed to securely support application programming interface (API)-driven voice, video, and messaging services. Also important, cloud-based CPaaS offerings are priced at published per-API call or per-minute rates, enabling businesses to pay for the exact amount of services they consume. This is a particularly compelling value proposition for organizations with varying levels of demand or seasonal spikes in business activity. The inherent scalability of cloud architectures also benefits CPaaS, enabling businesses to consume as much or as little of a provider’s API-directed services as needed by their application or work process.The global CPaaS market is in a high growth stage, with many of the contenders in the market reporting high annual double-digit growth.The incredible growth trajectory is driven by a steady stream of innovative new features and capabilities being delivered by CPaaS providers, the addition of new providers in the market, and increased interest and adoption of API-driven communications services by customers of all sizes. The Frost Radar for CPaaS includes 12 market participants that offer a minimum of voice and messaging services. The analysis is based on a set of 10 criteria, as follows:Vertical AxisGrowth index (GI) is a measure of a company’s growth performance and track record, along with its ability to develop and execute a fully aligned growth strategy and vision; a robust growth pipeline system; and effective market, competitor, and end-user-focused sales and marketing strategies. • GI1: Market Share (previous 3 years): Market share relative to its competitors in a given market space for the previous three years.• GI2: Revenue Growth (previous 3 years): Revenue growth rate for the previous three years in the market/ industry/category that forms context for the given Frost Radar.• GI3: Growth Pipeline: This is an evaluation of the strength and leverage of the company’s growth pipeline system, to continuously capture, analyze and prioritize its universe of growth opportunities.• GI4: Vision and Strategy: This is an assessment of how well a company’s growth strategy is aligned with its vision . Are the investments the company is making in new products and markets consistent with the stated vision?• GI5: Sales and Marketing: This is a measure of effectiveness of a company’s sales and marketing efforts in helping the company drive demand and achieve its growth objectives.Horizontal AxisInnovation index is a measure of a company’s ability to develop products/services/solutions that are developed with a clear understanding of disruptive Mega Trends, are globally applicable, are able to evolve and expand to serve multiple markets, and are aligned to customers’ changing needs. Key elements of this index include:• II1: Innovation Scalability: This determines whether the organization’s innovations is/are globally scalable and applicable in both developing and mature markets, and also in adjacent and non-adjacent industry verticals. • II2: Research and Development: This is a measure of the efficacy of a company’s R&D strategy, as determined by the size of its R&D investment and how it feeds the innovation pipeline.• II3: Product Portfolio: This is a measure of the product portfolio of the company, focusing on the relative contribution of new products to its annual revenues.• II4: Megatrends Leverage: This is an assessment of a company’s proactive leverage of evolving long-term opportunities and new business models, as the foundation of its innovation pipeline.• II5: Customer Alignment: This evaluates the applicability of a company’s products/ services/solutions to current and potential customers (7-year horizon) as well as how its innovation strategy is influenced by evolving customer needs.The Frost Radar reveals the market positioning of companies in an industry using their Growth and Innovation scores as highlighted in the Frost Radar methodology. The document presents competitive profiles on each of the companies in the Frost Radar based on their strengths, opportunities, and a small discussion on their positioning. Frost & Sullivan analyzes hundreds of companies in the industry and benchmarks them across 10 criteria on the Frost Radar, where the leading companies in the industry are then positioned. Industry leaders on both the Growth and Innovation indices are recognized as best practice recipients.Author: Michael Brandenburg
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