Don’t Pass On Advanced CPaaS

Not All Communications APIs Are Created Equal: How Better

Communication Capabilities Improve Customer Experience
And Increase Revenue Versus Complex, Individual APIs

A FORRESTER CONSULTING THOUGHT LEADERSHIP PAPER COMMISSIONED BY VONAGE, SEPTEMBER 2021

Table of Contents
Executive Summary 3

Key Findings 4

CPaaS Enables Communication Where, When,

And How Customers Want 5

Technical And Business Challenges Inhibit

Agility For Non-CPaaS Users 8

Advanced CPaaS Solutions Propel Orgs In Their

Communications Journey 12

Key Recommendations 15

Appendix 17

Project Director:
Emily Drinkwater, Senior Market Impact
Consultant and Sophie Baboin, Consultant

Contributing Research:
Forrester’s Application Development &
Delivery research group

ABOUT FORRESTER CONSULTING

Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their
organizations. Ranging in scope from a short strategy session to custom projects, Forrester’s Consulting services connect
you directly with research analysts who apply expert insight to your specific business challenges. For more information,
visit [Link]/consulting.

© Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on the
best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®,
Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other
trademarks are the property of their respective companies. [E-51482]

DON’T PASS ON ADVANCED CPAAS 2

Executive Summary
To be effective and foster long-term relationships, companies must be
able to engage with customers when, where, and how they prefer. Many
organizations are on a journey to discover how to make this possible,
but they are overwhelmed with all of the different tools and platforms for
communications.

In June 2021, Vonage commissioned Forrester Consulting to evaluate the

use and effectiveness of CPaaS (communications platform as a service)
for enhanced customer communications and engagement. A CPaaS is
a complete application platform for multitenant cloud environments that
includes development tools, runtime, administration, and management tools
for voice, video, and messaging services. An advanced CPaaS vendor has
even more extensive communications capabilities: robust conversation
services, multiple APIs, use case–specific APIs, monitoring and management
capabilities, low-code development tools, a global carrier network, and an
extensive library of sample applications. This type of solution includes
APIs such as video, voice, consumer messaging applications, two-factor
authentication, webchat, and SMS/text messaging. Less-capable CPaaS
systems offer lower-level and complex APIs that require more-skilled
developers to program across channels, and they vary widely in how
common customer data and interactions are defined.

To explore this topic, Forrester conducted a global online survey with 1,037
customer and digital experience decision-makers and influencers from
companies ranging in size from 500 to 20,000 employees. We found that
not all APIs are created equal: Users of CPaaS have significantly more
effective communications with their customers and prospects than those
who do not use CPaaS.

Key Findings

DON’T PASS ON ADVANCED CPAAS 3

Key Findings

CPaaS enables communication where, when, and how

customers want. To meet the growing expectations from
consumers and the changing technology landscape,
companies are turning to CPaaS to improve their
engagement programs. Those with CPaaS are much more
effective at getting customers the information they want
(98%) than non-CPaaS users (37%).

Technical and business challenges prohibit agility for

non-CPaaS users. Non-CPaaS users see exacerbated
challenges with their communications strategies from both
a technical and business perspective. Those who use
CPaaS face these challenges to a much lesser degree. For
example, 94% of non-CPaaS users say the ability to send
secure messages is very or extremely challenging, while
only 31% of CPaaS users agree. CPaaS sets companies
on an entirely different playing field than their non-CPaaS
counterparts.

Advanced CPaaS solutions propel organizations in

their customer engagement journey. While not yet
widely adopted, many organizations are considering or
have plans to adopt advanced CPaaS solutions. Half of
surveyed decision-makers have seen or expect to see an
advanced CPaaS increase revenue, citing the top benefits
of improved analytics and CX that address their major
challenges head-on.

DON’T PASS ON ADVANCED CPAAS 4

CPaaS Enables Communication Where, When,
And How Customers Want

Amid all of the global changes since the onset of the COVID-19 pandemic,
customers’ and prospects’ expectations have sharply increased. Customers
want to engage when, where, and how they want, leaving marketing and
customer experience (CX) professionals wading through a sea of customer
journey information and communications platforms to figure out exactly
what the customer needs. In surveying customer and digital experience
decision-makers familiar with CPaaS, we found that:

• Communication priorities spanning customer, organizational, and

technical goals increased sharply since the onset of COVID. Over the
coming year, improving CX, increasing revenue growth, and advancing
technology are top communication priorities for organizations (see
Figure 1). These priorities run the gamut for organizations from internal
(tech improvements) to external (customer-facing).

Figure 1
Top Communications Priorities For The Next 12 Months
(Showing “Critical/High priority”)

Customer Organizational Technical

Improve the Improve

experience of 86% Grow revenue 83% communications 77%
our customers capabilities

Optimize the
Communicate Accelerate our
expense of our
with clients in 73% 82% shift to digital 75%
customer service
new ways business
operations
Comply with Improve our Track customer
customer 69% ability to 69% journeys across 73%
communications innovate all touchpoints
regulations

Customer retention/ Creativity and Finance Modernization

acquisition innovation

Base: 1,037 customer and digital experience decision-makers and influencers

Source: A commissioned study conducted by Forrester Consulting on behalf of Vonage, July 2021

DON’T PASS ON ADVANCED CPAAS 5

For many, the pandemic has amplified these priorities. As customers
and prospects increased their demands and communications tactics
shifted, companies ramped up communication efforts. Decision-
makers indicated that the importance of many priorities increased
since the onset of COVID-19, such as improving the experience of
the customer (55%), optimizing the expense of customer service
operations (59%), and accelerating the shift to digital business (55%).

• As part of this digital acceleration, more and more companies

are turning to CPaaS to solve communication and engagement
issues. Nearly 50% of companies have either implemented or are
expanding their CPaaS capabilities, while another 30% have it on
their roadmap (see Figure 2).

Figure 2
Adoption Plans For CPaaS

CPaaS Users Decreasing or removing 2%

Expanding or upgrading implementation 25%

Implemented, not expanding/upgrading 23%

Non-CPaaS Users Planning to implement in the next 12 months 30%

Interested, but no plans to implement 19%

Base: 1,037 customer and digital experience decision-makers and influencers

Source: A commissioned study conducted by Forrester Consulting on behalf of Vonage, July 2021

DON’T PASS ON ADVANCED CPAAS 6

• CPaaS users are much more successful at 98% of CPaaS users
getting customers what they want when they are very or extremely
want it. In total, seven in 10 firms feel they can
effective at getting their
get information to customers when, where, and
how they want it. However, a closer look at the customers the content
data reveals that there are major differences they need or want,
in experiences for companies that use CPaaS compared to just 37% of
versus non-CPaaS users. CPaaS users are non-CPaaS users.
significantly more effective at providing
customers with information when and how
they want (see Figure 3). The numbers are
astounding: 98% of CPaaS users feel they are very or extremely
effective at getting their customers the content they need or want,
compared to just 37% of non-CPaaS users. With the stakes so high for
customer acquisition and retention, combined with increased demands
from consumers, how can companies proceed with a communications
plan that doesn’t include CPaaS?

Figure 3
“How effective is your organization at getting
CPaaS No CPaaS*
information to your customers in the following ways?”

(Showing “Extremely/Very effective”)

98%
With the content they need/want
37%

91%
In the timeframe they want it
49%

87%
In their preferred channel
43%

Base: 522 customer and digital experience decision-makers and influencers who currently use a CPaaS
*Base: 515 customer and digital experience decision-makers and influencers who do not currently use a CPaaS
Source: A commissioned study conducted by Forrester Consulting on behalf of Vonage, July 2021

DON’T PASS ON ADVANCED CPAAS 7

Technical And Business Challenges Inhibit Agility
For Non-CPaaS Users

Companies face some crippling challenges as part of their engagement

programs. However, in looking at CPaaS versus non-CPaaS users, we found that:

• High-level challenges span business and technology needs. The lack

of integration with existing tools and platforms (71%), inability to secure
messages (66%), and difficulty integrating with communications services (61%)
are top technical challenges for companies in aggregate. Meanwhile, top
business challenges are siloed business units (72%), lack of expertise (66%),
and being locked into a vendor contract (61%). In fact, 44% agree that it is
difficult to educate customer experience and digital experience professionals
about CPaaS. In total, all of these challenges lead to negative CX (59%) and
loss of revenue due to a lack of customer communications (51%).

• Companies that do not use CPaaS are much more likely to face those
challenges. Zooming in to compare the challenges of non-CPaaS users is
eye-opening. Non-CPaaS users are significantly more likely to struggle with
technical challenges across the board, which extends to amplified business
challenges as well. Unsurprisingly, non-CPaaS users are more likely to
experience crippling consequences around CX and finances (see Figure
4). The survey data shows that non-CPaaS users’ challenges are generally
more rudimentary, while CPaaS users are focused on more advanced
communication enablement.

• Non-CPaaS users see heightened integration challenges. When enabling

communications with their customers, 83% of non-CPaaS users find the lack
of integration with existing tools and platforms very or extremely challenging.
In general, CPaaS and non-CPaaS offer a wide range of channels, although
there is a difference in adoption of video — perhaps the result of the current
communications trends that spiked as a result of the COVID-19 pandemic (see
Figure 5). Yet both agree (44% CPaaS and 50% non-CPaaS) that disconnected
data is an issue. This leads to engagement journey hot spots as customers
move across channels, and it impairs full-journey analysis. If organizations
were to deploy channel support on one system, it would eliminate the
disconnected data issue.

DON’T PASS ON ADVANCED CPAAS 8

Figure 4
Top Challenges When Enabling Communications With CPaaS No CPaaS*
Customers And Their Consequences

TOP 5 TECHNICAL Ability to secure messages 31%

CHALLENGES 94%
Business applications lack up-to-date event
39%
(Showing info necessary to support communications 84%
“Extremely/Very Difficulty integrating with 8%
challenging”) communications services 83%
Lack of integration with existing 30%
tools/platforms 83%
Lack of development tools for 59%
communications applications 74%

TOP 5 BUSINESS Siloed business units 53%

90%
CHALLENGES
Lack of expertise 42%
90%
(Showing
“Extremely/Very Lack of visibility into customers’ 30%
communication preferences 86%
challenging”)
37%
Lack of customer journey analytics 85%
CX and design teams’ lack of experience/ 38%
knowledge of communications capabilities 81%

TOP 5 54%
Poor CX 63%
CONSEQUENCES
OF THOSE Loss of revenue due to a lack of customer 45%
communications 58%
CHALLENGES
Inability to connect client 29%
touchpoints 52%
Increased costs due to a lack of 24%
customer communications 50%

Disconnected data 44%

50%

Base: 522 customer and digital experience decision-makers and influencers who currently use a CPaaS
*Base: 515 customer and digital experience decision-makers and influencers who do not currently use a CPaaS
Source: A commissioned study conducted by Forrester Consulting on behalf of Vonage, July 2021

DON’T PASS ON ADVANCED CPAAS 9

 Given that most non-CPaaS users are already using the channels
that CPaaS can assist with, even if they are not using CPaaS itself, it
makes sense that they find integration very challenging since they are
likely using many third-party tools. Those who use CPaaS are much
less likely to struggle with integration challenges (30%), showing
that partnering with a CPaaS vendor that can successfully integrate
communication tools and platforms is critical to enabling better
customer communications.

Figure 5
CPaaS Users: “For which of the following services
CPaaS No CPaaS*
does your company use CPaaS?”
Non-CPaaS Users*: “Which channels is your company
using to communicate with customers?”

70% 67%
65% 63% 59% 64%
53% 58%
52% 50%
45%
38%

Video Voice Consumer Two-factor Webchat SMS/text

messaging authentication messaging
applications

Base: 522 customer and digital experience decision-makers and influencers who currently use a CPaaS
*Base: 515 customer and digital experience decision-makers and influencers who do not currently use a CPaaS
Source: A commissioned study conducted by Forrester Consulting on behalf of Vonage, July 2021

• Non-CPaaS users lack the agility and speed needed to meet

customer demands. As we know, time is money. Agility and speed
are critical for organizations as they attempt to adapt and respond
to ever-changing needs. CPaaS development tools aid in agility and
experimentation as they try to understand what customers need and
want. Those without CPaaS face major internal barriers and limitations
in their customer communications, including overly long timelines for
implementing communication capabilities and difficulty experimenting
with new communication capabilities (see Figure 6). Furthermore, on

DON’T PASS ON ADVANCED CPAAS 10

 the journey to really knowing your customer, 85% of non-CPaaS
obtaining, connecting, and understanding users say it is very or
customer analytics is critical, but it’s especially
extremely challenging
difficult for those without CPaaS as 85% say
it is very or extremely challenging to track to track and understand
and understand the effectiveness of their the effectiveness of their
communications. CPaaS vendors offer “more communications.
fully featured, packaged apps for contact
centers as well as lower-level APIs to support
customizations,” enabling the creation of a
frictionless customer journey.1

• Better development tools contribute to agility. Both CPaaS users

(59%) and non-CPaaS users (74%) stated concerns about their
technology stack. Developing, testing, deploying, and monitoring
CPaaS applications can be challenging if teams have to deal with low-
level, complex APIs along with being limited to no testing or monitoring.

Figure 6
“Rate your level of agreement with each of the
CPaaS No CPaaS*
following statements.”

45% 24% 25%

97% 97% 85%

It is very difficult for us to It takes our organization We have limitations when

experiment and try new too long to implement it comes to tracking and
communication capabilities communication capabilities understanding the success
of any communications
capabilities we deploy

Base: 522 customer and digital experience decision-makers and influencers who currently use a CPaaS
*Base: 515 customer and digital experience decision-makers and influencers who do not currently use a CPaaS
Source: A commissioned study conducted by Forrester Consulting on behalf of Vonage, July 2021

DON’T PASS ON ADVANCED CPAAS 11

Advanced CPaaS Solutions Propel Orgs In Their
Communications Journey

When comparing the survey results of An advanced CPaaS

organizations that are CPaaS users against vendor has:
those that are non-CPaaS users, it is clear that
engaging a CPaaS vendor delivers profound • Extensive
benefits for companies. Even further, engaging communications
an advanced CPaaS vendor solves the key issues capabilities
that companies face. An advanced CPaaS vendor
has more extensive communications capabilities, • Robust conversation
robust conversation services, multiple APIs, use services
case–specific APIs, monitoring and management
capabilities, low-code development tools, a global • Multiple APIs
carrier network, and an extensive library of sample
• Use case–specific
applications. Less-capable CPaaS systems offer
lower-level and complex APIs that require more-
APIs
skilled developers to program across channels • Monitoring and
and vary widely in how common customer data
management
and interactions are defined. They do not offer
low-code capabilities, opening the range of
capabilities
users who can integrate communications into • Low-code
applications. We found that:
development tools
• Both CPaaS users and non-users have
a common future state in mind. While
• A global carrier
challenges are amplified for non-CPaaS network
users, their ideal use of CPaaS aligns with
• An extensive library of
that of CPaaS users. As part of their digital
transformation, current CPaaS users plan to
sample applications
extend their use of CPaaS with a focus on CX
improvements and modernization. While non-
CPaaS users are also focused on CX improvements and modernization,
they have a heightened focus on security of communications within
their current framework.

DON’T PASS ON ADVANCED CPAAS 12

• High adoption is planned for advanced 56% of decision-makers
CPaaS vendors. While users of CPaaS expect revenue to
solutions have seen much lower levels of
increase by using an
key challenges, some organizations take
it one step farther by partnering with an advanced CPaaS vendor.
advanced CPaaS vendor. There are a few early
implementers of advanced CPaaS vendors,
but many CPaaS users are at the starting gate, with interest or planned
adoption of advanced CPaaS in the next 12 months (see Figure 7). Planning
or interested users likely use only a single API (e.g., SMS) but are starting to
realize that their competitive advantage is slipping against those that have
already adopted an advanced CPaaS solution.

Figure 7
“What are your company’s plans for using an
advanced CPaaS vendor?” 6%
19% 11%
Expanding

Implemented Current
CPaaS
Users 22%
Planning to upgrade

Interested, but no plans to implement 41%

Not interested

Base: 522 customer and digital experience decision-makers and influencers who currently use a CPaaS
Source: A commissioned study conducted by Forrester Consulting on behalf of Vonage, July 2021

• Revenue is expected to increase, and customer service inquiries are

expected to decrease with advanced CPaaS. By using an advanced
CPaaS vendor, 56% of decision-makers expect revenue to increase
by an average of 8%. Half (50%) also anticipate that customer service
inquiries will decrease by about 25% by partnering with an advanced
CPaaS vendor. For example, a customer who gets an automatic
notification about the location of their shipped package is less likely to
call customer service with a shipping inquiry.

DON’T PASS ON ADVANCED CPAAS 13

• Advanced CPaaS addresses major challenges head-on with big
benefits. Advanced CPaaS vendors alleviate major challenges
companies face, enabling communications with customers from a
technical perspective while also making progress toward top business
communication priorities (see Figure 8). For example, 41% of decision-
makers said that the inability to connect customer touchpoints was
very or extremely challenging, but with an advanced CPaaS vendor,
they cited the ability to connect customer touchpoints as the top
benefit. Similarly, 51% cited loss of revenue due to a lack of customer
communications as a major challenge, but 57% cited increased revenue
as a top business benefit of using advanced CPaaS.

Figure 8
Top Benefits Of Using An Advanced CPaaS Vendor

TOP 5 TECHNICAL BENEFITS TOP 5 BUSINESS BENEFITS

Ability to connect client 60% Improved customer experience 59%

touchpoints

Improved customer journey Increased revenue

59% 57%
analytics

Increased visibility into Reduced costs of customer

customers’ communication 56% service due to proactive 57%
preferences communications to customers

Increased integration with More collaboration across

53% 52%
communications services business units

Increased integration with Increased organizational

50% support 52%
existing tools/platforms

Base: 1,037 customer and digital experience decision-makers and influencers

Source: A commissioned study conducted by Forrester Consulting on behalf of Vonage, July 2021

Key Recommendations

DON’T PASS ON ADVANCED CPAAS 14

 Key Recommendations
Forrester’s in-depth survey of customer and digital experience decision-
makers about CPaaS yields several important recommendations:

Move to an advanced CPaaS solution to address critical

communications needs.

Advanced CPaaS can address key pain points in customer communications

while also improving customer experience and increasing revenue for
your organization. However, nearly half (49%) of organizations have not yet
adopted any CPaaS tool. Of current CPaaS users, only 17% are using an
advanced CPaaS solution. Making the switch to an advanced CPaaS vendor
positions your organization for a strong competitive edge.

Align customer experience across the enterprise using customer

journey mapping.

Both CPaaS and non-CPaaS firms validated the impact of better customer
communications, yet they identified opportunities for further revenue, cost,
and customer satisfaction improvements. Engage stakeholders across the
enterprise who own customer interactions and gain alignment around the
current state of customer journeys.

Empower a customer experience focus with advanced CPaaS education.

Customer experience should be top of mind for all members of an

organization, in addition to the dedicated CX team. CX design teams need
to understand the capabilities advanced CPaaS offers and apply them to
future-state customer journeys. The limitations of legacy CPaaS, or the
lack of CPaaS at all, erect barriers to CX design professionals to engage in
customer communications projects. Limited monitoring and reporting also
hide customer journey hot spots (e.g., lost customer context as they channel-
hop). This information can now be exposed with advanced CPaaS.

DON’T PASS ON ADVANCED CPAAS 15

 Identify and gain alignment on initial customer journey improvements.

With advanced CPaaS tools, CX teams can envision a future state of aligning
communications across the enterprise. Companies should ensure that initial
projects have a clear understanding of current-state KPIs, so the outcome
has clear, measurable results that can inform and accelerate deployment,
testing, monitoring, and implementation, fine-tuning the CX as they go along.

Promote the success of initial projects and expand deployments.

The environment in which all enterprises operate is constantly changing;

therefore, customer journeys always present an opportunity for ongoing
improvements. Leverage advanced CPaaS reporting and monitoring tools
to ferret out customer journey hot spots or opportunities for innovative
communications to differentiate your firm from competitors, and iterate on
these constantly.

DON’T PASS ON ADVANCED CPAAS 16

Appendix A: Methodology
In this study, Forrester conducted an online survey with 1,037 global customer and digital experience
decision-makers and influencers to explore the effectiveness of CPaaS. The study began in June 2021
and was completed in July 2021.

Appendix B: Demographics

REGION COMPANY SIZE (BY EMPLOYEES)

APAC 43% 500 to 999 9%
EMEA 29% 1,000 to 4,999 47%
North America 18% 5,000 to 19,999 34%
South America 10% 20,000+ 9%

TOP 4 INDUSTRIES RESPONDENT LEVEL

Retail/e-commerce 17% Director 70%
Healthcare 17% Vice president 24%
Financial services 17% C-level 7%
Education/nonprofit 17%

RESPONDENT DEPARTMENT
IT 50%
Marketing/advertising 50%

Note: Percentages may not total 100 because of rounding.

Appendix C: Endnotes
1
Source: “The Programmable Contact Center: APIs And Low Code Optimize The Customer Journey,”
Forrester Research, Inc., December 23, 2020.

DON’T PASS ON ADVANCED CPAAS 17