I’m grateful to Matteo for being prepared to keynote at TADSummit 2024. He brings a long and storied experience to TADSummit. His world-class presentation explains an important and under-discussed aspect of CPaaS.

His core messaging is focus on the customer, which I support, it’s a weakness for the industry. And local customer focus leads to some interesting strategies.

Matteo highlights the challenges facing the industry with the peak of inflated expectations because of the assumption that valuations of SaaS multiples were applicable. And we are currently awaiting the plateau of productivity.

There is also the glass half full/empty dichotomy. CPaaS is in a market with upside potential. But it is crowded, commoditizing, and there is technology obsolescence on the horizon.

A factor I worry about is the consolidation into the hyperscalers, like Google (RCS dominance), Amazon, and Microsoft (both have deployed their own CPaaS and I’m seeing strong enterprise adoption across their suite of integrated enterprise applications). I think they could become a highly disruptive force. Hence the importance of Matteo’s local customer focus for many CPaaS.

Matteo wraps up the current status review with the “blurry” situation in CPaaS. That is, all the problems with the SMS aggregation business, that currently call themselves CPaaS. Check out the The Honest CPaaS Review for much more details.

So how to fix this problem? The general shift to multi-channel is forcing change in the market:

• Channels are becoming more valuable as a business function – flatter aggregation;
• Channels need predictable performance – fewer intermediaries; and
• Channels need privacy, security, fraud protection – shorter chains.

This list is why I think the hyperscalers may end up consolidating the CPaaS market. Matteo considers GenAI will change SaaS and CPaaS. We have a TADSummit panel discussion on that very topic with Voice AI implementers. I’ll link to that once I complete that panel summary.

In our discussion with Robert Vis of Bird, he highlighted the shift in Bird to a new age CRM. Where the integration is at the app layer, APIs remain relevant, just less of a focus. Podcast 87: Truth in Telecoms, The Vis sets out how Bird has already changed its strategy.

Matteo clearly stated, the future is in the enterprise solving specific business problems, as Bird has done. This transition is not easy, but necessary, as the routing business is in decline. The theme of virtual agents came up several times, at TADHack Open in March, Signalwire had their virtual agent platform on show for developers to hack on.

Matteo also highlights the critical importance of localization in creating defensible moats, particularly from the hyperscalers. Here DT provides a great example, they won a customer from Twilio, because of the local focus, data sovereignty, their German CPaaS is only resident in Germany. Unifonic in their TADSummit 2023 presentation also highlighted data sovereignty and local regulations as important.