InterviewUC&C30 Jan 2023 · 3 min read

SMEs Could Drive CPaaS Market Growth to $29 Billion by 2025 - Research

SMEs could drive CPaaS growth to $29 billion by 2025, with Juniper Research urging managed services, rich media, SMS, email and AI chatbots. Published on UC Tod

Jonny Wills

SME-driven CPaaS market growth forecast 2025

According to new research, the CPaaS sector is forecast to grow by 80% from $16 billion in 2022 to $29 billion in 2025.

To take advantage of the substantial 80% growth over the next three years, the CPaaS report by Juniper Research called Market Outlook, Emerging Opportunities & Forecasts 2023-2027 urges CPaaS providers to focus on developing managed services through their platforms.

The report advises that the proposed services should enable the creation and management of rich media content across channels such as OTT ('over the top') business messaging using the internet rather than mobile networks, plus email and social media.

Sam Barker, Research Author and Head of Analytics & Forecasting at Juniper Research, said: “CPaaS vendors now compete on the capabilities of managed services to attract SMEs. Many of these smaller enterprises lack in-house development facilities, so they will choose the CPaaS platform that provides the most comprehensive managed services for rich media channels.”

Overcrowded CPaaS Market Needs to Focus on SMEs

As the market becomes more inundated with CPaaS services, the report suggests that CPaaS providers need to expand deeper into the SME sector. Additionally, the report anticipates that CPaaS providers will centre on delivering value-added capabilities that enable platform users to leverage rich media channels, achieving this by embedding and maximising tools such as workflow builders and AI-based chatbot solutions.

Small and medium enterprises (SMEs) are essential in most economies, especially in developing countries. According to the World Bank, SMEs make up the majority of businesses worldwide and contribute significantly to job creation and global economic development. They account for about 90% of companies worldwide and more than 50% of his employment.

Formal SMEs contribute up to 40% of the national income (GDP) of emerging markets. These numbers are significantly higher when informal small businesses are included.

An estimated 600 million jobs are needed by 2030 to meet the world's growing workforce. Therefore SME development has become a top priority for many governments worldwide. In emerging markets, most formal jobs are created by his SMEs, making seven out of every ten jobs.

However, access to finance is a significant barrier to SME growth. It is one of the most frequently cited barriers SMEs face when growing their businesses in emerging and developing economies, along with weak economies, tax burdens, competitor practices and demand.

SMS Traffic Will be Half of Revenues

SMS (short message service) has perennially been the cornerstone of CPaaS revenue. The report forecasts that by 2025 SMS traffic revenue will account for over 50% of all CPaaS revenue. This is because it has established trust in terminating traffic such as MFA (Multi-Factor Authentication).

Despite this, the report projects that rich media channels such as email and social media will continue to expand, bringing in over $10 billion in revenue by 2025.

A big part of this will be conversational messaging with customers by companies. Customers will instantly benefit from personalisation, assistance and flexibility with their favourite brands via their smartphones.

This will account for over 40% of the market value of CPaaS. As a result, the platforms that do not include managed services for rich media services in their three-year plans risk losing out on the significant growth projected in the CPaaS market.