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COVID-19 driving rapid growth in CPaaS market


Johannesburg, 03 Nov 2020
Read time 4min 40sec

The need for organisations of all types and sizes to find effective ways to communicate with people, processes and things has been an ongoing challenge for many years.

Rohit Tripathi, Chief Product Officer and Head of GTM, SAP Digital Interconnect
Rohit Tripathi, Chief Product Officer and Head of GTM, SAP Digital Interconnect

The advent of the COVID-19 pandemic brought a new level of urgency to this trend. It has made people realise just how important it is to be connected regardless of whether the interaction is with your bank, your colleagues, or making payments for goods and services that have ordered online and, almost overnight, the measured pace of digital transformation accelerated as businesses urgently sought solutions for connecting employees, suppliers, consumers, partners and contractors in a remote environment.

Rohit Tripathi, Chief Product Officer, Go-to-Market for SAP Digital Interconnect, says anecdotal evidence suggests that what would otherwise have taken years in terms of digital transformation has been concertinaed into just a few months since the lockdown forced a shift to remote working.

“The increase in digital connections has compelled companies of all sizes and in virtually every geographical region to aggressively hasten the digitisation of their business processes and activities,” he adds.

“This has resulted in a surge in demand for communications platform as a service (CPaaS), with the global CPaaS market projected to reach US$17.2 billion in 2023.”

Courtney Munroe, Research Vice-President, Worldwide Telecommunications Research at IDC, says CPaaS providers reduce complexity by simplifying the process of customer engagement for developers, service providers and all enterprise lines of business.

As a cloud-based service, CPaaS solutions are fully managed by providers and use APIs to add the real-time communications capabilities of technologies such as SMS, e-mail, voice over IP, chatbot solutions, push notifications, social network channels, video chat and two-factor authentication to applications without requiring new infrastructure, interfaces and ongoing support.

“The best platforms (are) singular, integrated platforms that offer a wide selection of APIs as well as end-to-end solutions that span the fast-growing programmable communications services and critical networking layers, including business continuity, IOT connectivity and customer contact centres,” Munroe adds.

According to Tripathi, South Africa is also experiencing a surge in CPaaS demand, with messaging traffic for payment gateways like PayPal having increased significantly since the COVID-19 pandemic.

“That these types of services are increasingly being used in South Africa shows that the digitisation of activities like commerce and business transactions has also increased. So, for example, we have also seen a significant rise in the utilisation of mobile banking, one-time password interaction and e-commerce-related interactions around payments, order confirmation and delivery tracking.”

Tripathi believes a key driver of the shift to remote interactions in this country is the almost ubiquitous penetration of mobile devices.

Like the rest of Africa, South Africa is mobile-first country where most Internet access is through mobile devices and the cellular network. According to Stats SA's latest General Household Survey data, 60% of South African households had access to the Internet using mobile devices in 2018. However, there is still a high proportion of households that use regular cellular phones – rather than smartphones – as a means of communication. This number grew from 85.5% in 2015 to 89.5% by 2018.

“It’s clear then that mobile connections are much more prevalent and reliable than fixed and even mobile Internet connections. This is important for businesses and their digital transformation efforts as it indicates that they cannot rely on the same type of communication platforms as their counterparts in countries with almost universal fixed and mobile Internet coverage,” Tripathi says.

With key elements of customer service and support having to be enabled, CPaaS has made it possible for the rapid and easy deployment of remote contact centres. And because CPaaS is cloud-based, it makes it easier to scale and implement. It is also able to address the diversity in the client base and customer needs.

“The continued reliance on technologies like SMS in countries like South Africa, which also have a large – and growing – Internet-connected population could complicate the ability of companies to communicate with their target audience without CPaaS. CPaaS makes it possible to reach all consumers and end-users of different age groups, demographics and income levels via the communications medium of their choice, regardless of whether that’s an Internet-based instant messaging service like WhatsApp or Facebook Messenger, or SMS,” he adds.

Tripathi points out that while CPaaS channels are increasingly being used to improve customer experience and engagement, they can also be used to provide alternative connections during outages, disasters and in remote areas with poor network access. CPaaS is also being used by companies to strengthen their communications with IOT sensors and mobile devices.

“There is no doubt in my mind that CPaaS has a critical role to play in the broader African market. It is more than a way to provide a channel for connectivity and engagement to drive commerce. It can also be used to make a difference, a real difference, to people across the continent by providing support to the agencies that do so much good for the people of the continent,” Tripathi concludes.

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