The BIG Difference Between CPaaS Providers and CPaaS Enablers
CPaaS (Communications Platform as a Service) is a fairly new term in the market so a definition is helpful to those who may not be familiar with it. CPaaS is a cloud-based delivery model that allows organizations to add real-time communication capabilities (voice, messaging and video) to business applications by deploying programmable APIs (Application Programming Interface). CPaaS software provides a framework that includes everything needed to build, launch and support this new breed of application. CPaaS solutions provide not only programmable APIs, but in many cases, they offer WebRTC SDKs (Software Developer Kits), templates and visual design tools to help speed application development. CPaaS software also serves as a back-end for communications, so developers don’t need to build and maintain their own. Just as important, CPaaS is a cloud offering that provides full hosting, scaling and management of the infrastructure that developed applications live on. Rather than spending time and money to purchase, spin up and manage hardware, developers write and deploy code directly to the cloud platform.
Because developers do not spend as much time on building real-time features (i.e. messaging) from scratch or maintaining a back-end framework, producing applications using a CPaaS is significantly cheaper and faster than traditional development methods. Further the cloud’s ability to scale apps quickly and easily offers more opportunities for developers to focus on the business versus the infrastructure. Most CPaaS providers/enablers support pay-as-you go pricing models so utilizing a CPaaS allows a business of any size to leverage integrated real-time communications at a fraction of the cost and complexity of traditional development models.
The Difference Is Not The Technology – It Is The Business Model
Full Stack CPaaS offerings include programmable APIs for voice, messaging and video. Some provide WebRTC SDKs and Visual Design tools. Many offerings that market themselves as a CPaaS actually provide only one or two of the 3 programmable API categories but not the full stack. The remainder of this blog is about Full Stack CPaaS offerings.
A good blog that covers the challenges associated with less than Full Stack CPaaS offerings can be found here
Ok then, what are the business models and what makes one so different from the other?
The CPaaS Provider Business Model
A CPaaS Provider offers Commercial CPaaS software that is based on its own stack. Commercial CPaaS providers offer the technology outlined above (programmable APIs, cloud development and deployment, etc.) either by developing the APIs themselves it or negotiating OEM deals with API software vendors. Commercial CPaaS Providers are not service providers. So although they generate network traffic, they cannot move or terminate network traffic. They need service providers to perform this task so they negotiate with service providers to move and terminate traffic on their behalf. The Commercial CPaaS solution consists of their software stack – and their service provider partners. It is a closed system in that unless a service provider has a negotiated contract with the Commercial CPaaS Provider; it cannot move or terminate any traffic generated – even if it is generated by one of their existing enterprise customers.
The challenge for a service provider that partners with a Commercial CPaaS Provider is that they get less revenue for moving and terminating traffic than they did previously. If they do not negotiate an agreement with the Commercial CPaaS Provider, service providers stand to lose revenue from any existing enterprise customer that utilizes an application built on the Commercial CPaaS software. And as the Commercial CPaaS provider offers more applications, the service provider loses more traffic.
Commercial CPaaS Providers are not service provider friends – they are actually the service provider’s competitor!
The CPaaS Enablement Model
So what can service providers do to protect themselves from Commercial CPaaS Providers taking over their enterprise customers? This is where the CPaaS Enablement Model comes in.
CPaaS Enablement providers, like Telestax, partner with service providers instead of competing with them. In this model, the service provider becomes a CPaaS themselves. CPaaS Enabling a service provider takes less than a week. Now the service provider can offer the same capabilities (programmable APIs, cloud development/deployment) to their enterprise customers that the Commercial CPaaS providers are selling. And there is no negotiating for handling and terminating the network traffic – the service provider claims all of this revenue. As applications and services are deployed within the enterprise customer, revenue increases. The service provider has now become a strategic partner to their enterprise customers. A significantly more inclusive relationship than selling only traditional services like connectivity and bandwidth.
Because CPaaS is a new solution that blends business application development with telecommunications, two groups within IT will be interested in this strategy. IT long ago lost the battle of standardization for many of the tools utilized within the enterprise. But they still hold a level of power over large strategic platform decisions. Selecting a CPaaS platform should be a very strategic decision. The challenge is they are masked behind applications. As lines of business or departments within an enterprise begin to adopt real-time applications, the CPaaS that supports the app comes along with it. If IT is not thoughtful or out in front of this, they will unwittingly wind up supporting more than one CPaaS platform. This trend is the service provider’s opportunity to become a strategic partner to their enterprise customer. CPaaS enabled service providers should offer free access to their CPaaS to all of their enterprise customers. There is little to no cost associated with doing so because a fee is charged only when traffic moves over the network. It gives power to IT to standardize on the service provider CPaaS and blocks Commercial CPaaS providers from gaining access.
The bottom line is Commercial CPaaS Providers are heading straight towards service provider’s enterprise customers. Service providers have the choice of losing revenue – and possible the enterprise customer altogether, or taking the bull by the horns and becoming CPaaS enabled. Doing nothing will result in the Commercial CPaaS Provider winning. Telestax is here to make sure they don’t.
Find out how we can help you win this battle. We are expecting you.