Innovative startups are reshaping the way companies do business by offering their products as a service (PaaS) via APIs – the upcoming and most promising business model of the circular economy. In the telecommunications industry, the trend shows up as communication platforms being offered as a service (CPaaS). From all companies, established companies in telecommunication, in particular, have a unique position to take advantage of the evolution towards PaaS, share innovative technologies safely and help others transition into the digital era.
Sharing technology through APIs
In technology, large companies such as IBM, Microsoft and Salesforce are offering open access to their IT architecture via APIs, allowing other companies to re-use their functionalities and services. Smaller companies are also starting to offer products or services via APIs. As a result, it is becoming common for companies to implement services made by other companies into their own digital products and services via APIs.
The rise of the API marketplace
In order to implement other companies’ technologies safely, developers and business owners are looking for a central and trusted point of access for APIs.
One of the first to offer such a point of access was RapidAPI, a large API marketplace containing all kinds of APIs for finance, travel and sports purposes, to name a few.
Established companies in the telecommunications industry are catching on to the API economy as well. Earlier this year at Enterprise Connect, AT&T – the main telecommunications provider in the USA – introduced their API marketplace built on Ribbon Communications’ Kandy platform. KPN too acknowledged the advantages of sharing access to technologies and opened the KPN API Store earlier this year, with a portfolio including CPaaS APIs.
Why established carriers invest in API marketplaces
It’s no surprise that the telecommunications industry is facing some challenges. The world is digitalising and over-the-top services from companies like Google, Microsoft and Facebook are winning grounds. The days in which operators had a monopoly on communication services belong to the past.
With high-quality internet on all devices anyone can text, call and send video messages without using a phone line. Sure, consumers rely on the internet that operators supply, but these methods of communication really can be provided by any start-up or scale-up.
Twilio changed the telecoms industry
The success of global CPaaS providers like Twilio in the last couple of years was a strong wake-up call for carriers. In Twilio’s own words, it:
“powers the future of business communication”
…by virtualising the world’s communication infrastructure through APIs.
Their APIs allow companies to create flexible communication solutions that fit their needs, allowing communications to be integrated with, and tailored to, any business process. This results in a significantly better customer or employee experience. Without Twilio, Uber for example would have never become the successful service it is today.
By offering communication services via an open architecture, Twilio opened up the black box of the telecommunications industry and created an incentive for change.
Opportunities for carriers to outplay the CPaaS evolution
Telecommunications companies have a chance to meet the challenge of new over-the-top players and use the evolution of CPaaS in the market to their own advantage. The opportunities for carriers mostly lie in monetising established technologies in new ways, increasing market share and margins, and leveraging partnerships to build new digital ecosystems.
Established carriers have the exceptional position of being the trusted player in the field of telecommunications technology. They can use their place at the forefront of technology and their collaborations with the best suppliers of CPaaS platforms to offer the best solutions out there, in a secure and compliant way. This way, customers get the best of both worlds.
By connecting not just technology, but also people, carriers can go one step further even, by inspiring their customers to take the next step in digital transformation and supporting them along the way.
Guest Blog by Anuschka Diderich, Platform Lead, KPN Open Innovation Hub
