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4 Factors Contributing to The Rapid Growth in The CPaaS Sector

Communication is an essential part of any business. It’s critical to acquire, engage, and retain customers. New technology like Communications Platform as a Service (CPaaS) has helped enterprises thrive in a world that relies more and more on mobile. Just how much has the CPaaS market grown, and why should you care? There are two reasons.

First, you might be considering investing in a CPaaS solution. After all, most companies are now hard-pressed to improve their business communications now that telecommuting and e-commerce have become more commonplace.

Second, you may be interested in investing in a CPaaS company. Some of those new companies have experienced between 17% to 40% growth in 2020 alone, and it’s estimated that most will have bullish growth projections next year.

The Current Situation

In Q2 2021, the market for CPaaS has grown by 40% globally. The demand for CPaaS is high, and as mentioned, many CPaaS providers are popping out of nowhere. It’s also worth noting that even two of the biggest tech giants from Silicon Valley have already entered the fray.

It’s no coincidence that the CPaaS sector started to experience its rapid growth and the COVID-19 pandemic ravished the world at the same time. The epidemic’s restrictions and social and economic changes have made businesses realize that they need CPaaS to cope with those changes to thrive and survive. And this realization pushed the following factors that are contributing to the meteoric rise of the CPaaS sectors.

1. Healthcare Industry Demand

The pandemic has wreaked havoc in the world, especially in the healthcare industry. Most healthcare workers have become highly at risk of getting infected while doing their jobs. In response, the industry needed to find a way to reduce face-to-face interactions significantly and improve how their communications channels fast.

CPaaS has become the ideal solution. Unlike Unified Communications as a Service (UCaaS), which can be safely attributed as CPaaS’ predecessor, CPaaS is a versatile system that can adapt to an organization’s current communications setup. It can be deployed as soon as possible, and there will be minimal need for the organization’s workers to train or learn new interfaces and workflows.

Because of that, the healthcare industry has been the biggest driver for growth in the CPaaS sector. With the introduction of CPaaS, hospitals and clinics can now utilize and take advantage of teleconsulting better without risking anyone’s health.

In the United States, CPaaS has become an immediate solution for most healthcare institutions, especially electronic health record (EHR) providers, as most platforms are Health Insurance Portability and Accountability Act (HIPAA) compliant.

2. Widespread Adoption of Telecommuting

During the first few months of the pandemic, many countries mandated social distancing and started quarantines. Those events led to some businesses shutting down because employees couldn’t go to their workplaces. To get around it, many companies needed to adopt telecommuting.

Before, remote working was an inclusive option to only a few—not solely because the work-from-home (WFH) culture has an enormous stigma attached to it. That’s because many organizations are ill-equipped to implement it and aren’t financially ready to make a transition. However, the risk of businesses closing down because of the pandemic forced the hands of executives to adapt.

Other than the healthcare sector, the first ones to implement WFH setups were the financial, real estate, and hospitality industries that heavily rely on customer engagement. To allow telecommuting, businesses needed to establish a system to enable their employees to work remotely. This situation increased the demand for CPaaS further.

Physical contact centers also followed suit and integrated work-from-home setups for their employees.

3. Rise of Retail

Even before the pandemic, the online retail and shopping industry has been steadily growing. Unlike businesses with physical shops, online retailers greatly depend on customer and business communications to operate—a communication platform is integral to a retailer.

Established businesses are already using UCaaS. However, budding businesses aspiring to be online retailers also need a communication platform to take advantage of the current surge of online shoppers caused by the pandemic. It’s a demand that CPaaS can meet.

4. SMS Marketing

Decades ago, people stopped using SMS because they received many marketing texts, so they loved emails because it was so personal and they didn’t receive a lot of sales pitches. But the tides have turned, and it’s now the other way around. Email has become too spammy, and SMS has become most consumers’ preferred avenue for personal communication next to messaging apps.

That change made SMS an untapped marketing platform for a long time. Aside from the numerous regulations and high costs, businesses have avoided using SMS because of how limiting it is to market and engage with customers.

However, with the advent of unified communications technologies, like CPaaS, businesses use SMS again as a marketing and customer engagement platform. Most top CPaaS providers consider SMS as the marketing tool of the future. They believe that the demand to integrate consumer-based SMS communication will be the primary demand that they’ll need to meet in the coming years to stay afloat. After all, at least 64% of people spend more time on their phones because of the pandemic, and it may even increase in the coming years.


You may need CPaaS in your business or try to invest in some providers. Better yet, you might even start a business, develop your platform, and compete in the CPaaS sector. Whatever your plan is, it’s undeniable that the demand for a communications solution like this will be on the rise for a very long time.

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