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Leading Cloud Communications Platforms Innovation Vectors: The Strategic Imperative

A question on top of communications technology professionals’ minds is “How do we reinvigorate growth in the business communications market? What type of innovation can be monetized to justify R&D investments and catapult the industry into high-growth mode again?” Some would go even further and ask “Is our industry headed for imminent oblivion – or death? Are there any innovation vectors that can save telecom from becoming a tiny speck in the broader IT universe?”

At first glance, it appears that innovation in the enterprise telephony/business call control space has plateaued. When it comes to business calling, there’s little that communications vendors can do to makeit better, faster or cheaper. Cloud communications services have already democratized calling from a cost and accessibility point of view and have caught up with and surpassed the extensive feature sets of premises-based communications systems.

However, the industry keeps reinventing itself. Cloud communications platforms that offer enterprise telephony/private branch exchange (PBX) functionality have long since expanded their feature sets to include meetings, messaging, mobility and more, to deliver a full unified communications as a service (UCaaS) stack. Now, these platforms' newer functionality expansion vectors include contact center as a service (CCaaS), application programming interfaces (APIs), advanced analytics and other services.

Most current communications innovation is happening around the meeting and messaging capabilities of the leading UCaaS suites. More specifically, technology developers are leveraging artificial intelligence (AI) to enhance video meetings with automated recording, transcription, summary, search, translation, virtual backgrounds, reactions, user avatars and other advanced features. Similarly, messaging capabilities are evolving across platforms in terms of organization, searchability, archiving and more. AI creates possibilities for innovative providers to enhance user experiences, provide valuable insights to IT admins, business leaders and end users, and optimize workflows.

Contact center and customer experience (CX) management capabilities also present opportunities for cloud communications providers to expand their services suites and provide more value to businesses. Most cloud communications platforms started as cloud private branch exchange (PBX) solutions and gradually expanded their collaboration/UC feature sets.

Contact center capabilities on most platforms are still maturing, as vendors fill functionality gaps through partnerships with leading CCaaS providers. Going forward, robust CCaaS capabilities will be a critical part of cloud communications suites and a competitive advantage for technology developers and service providers.

APIs and programmability represent another important innovation vector that will separate the winners from the laggards in the cloud communications space. Programmability will enable more nimble vendors to co-innovate with customers and partners, address unique use cases, integrate communications with workflows, and differentiate from competitors.

Finally, innovative and/or differentiated mobile capabilities, such as business phone numbers and calling plan integration with native mobile dialers, will enable platform vendors to better serve existing customers and tap into new customer segments (e.g., frontline workers). Innovation in the cloud communications space was a key topic at a vendor panel discussion held at Cloud Connections 2023, a flagship industry event organized by the Cloud Communications Alliance (CCA). Panelists included: Brian Beutler, Founder and CEO of Alianza; Chris Carabello, Senior Director, Product Marketing at Microsoft; D.P. Venkatesh, Digital, SMB and Global Strategic Partners Leader at Cisco; and Patrick Sullivan, Co-CEO and Co-Founder of 2600Hz. I reached out to the panelists and asked them to share some additional thoughts on the speed of innovation in the cloud communications space.

Popova: Has the speed of innovation slowed down in cloud communications? Have we reached a plateau or are there any exciting new opportunities in this space?

Beutler: Many communication service providers (CSPs) are in the process of transforming from traditional "telcos” to modern “tech-cos.” The VoIP and softswitch technology that CSPs have relied on for the last 20 years is being analyzed through this same lens.

Softswitch innovation is basically dead. Legacy vendors want CSPs to believe that virtualizing or hosting softswitches in the cloud is the next innovation, but a different deployment model of the same technology won't fix the underlying problems caused by supporting dozens of software versions across hundreds of deployments, each with additional third-party integrations for SBCs, firewalls, CALEA, LCR engines, device provisioning, fraud prevention, rating, carrier services, number porting, directory listing, and more. This complex maze of cross-dependencies and vendors’ competing priorities makes it nearly impossible for a CSP to be successful in today's increasingly competitive landscape.

Both the softswitch vendors and the CSPs that rely on them are spending so much of their time and energy maintaining the status quo that it’s nearly impossible to innovate.

Sullivan: The innovation cycle is speeding up, which reminds me of the age-old adage that your customers will always want to pay less for more features. So, to keep your customers, you need to also speed up your product development cycle to address that pressure to deliver more for less. The main way we’re doing this right now is through our developer enablement mindset and utilizing the best technology for the task at hand. A good example of this is our AI team. Because they’re so nimble, they can quickly adapt to the landscape that’s constantly changing with the release of AI tools like ChatGPT and Bard that are massive groundbreakers.

If you asked me six months ago, “Hey, Patrick, how cool is AI?” I would have said it's okay, nothing more. Now AI is already having a massive impact on our product development cycle. By training the AI on our entire code set, it has learned how we code and can now predictably add code for us that can then be modified by our developers based on what they’re trying to accomplish. That speeds up our developers, and even improves all the documentation. We've been around for 13 years, and we've had a bunch of disjointed repositories of documentation. AI has gathered all that documentation up and now, if any engineer or support person has a question, it literally gets the exact answer right away. And that's for internal tools and external tools.

Venkatesh: The bar for delivering a competitive employee and customer communications experience is very high today—unlike anything offered just a short time ago. Advances in AI and machine learning and the computing power available, not only in the cloud and at the edge of the network but embedded in the customer devices, have introduced limitless possibilities for improving the user experience.

So, I’d say that the pace of innovation is accelerating in cloud communications, but in a different way from a few years back. Phase One of innovation was about leveraging the cloud—basically taking a PBX or any communications functionality and leveraging the scalability, reliability and other cloud-native benefits. But now we are seeing that isn’t enough. What we are doing at Cisco for Webex in Phase Two is building new innovative features that are not traditionally communications-related but have a tremendous impact on communications, such as noise removal or optimizing for the speaker’s voice or even things like elevating a voice call to video or to a meeting.

I don’t think we have reached a plateau in innovation at all. I think we are in the beginning, not the middle or end. The exciting thing for me is that the definition of cloud communications is morphing into cloudcollaboration—calling plus meetings plus contact center. But that’s a product lens; the market opportunity is that employee experience is a differentiator for companies and customer experience is for customers. So, the opportunity we have when we at Cisco look at our combined calling and contact center and CPaaS market is really exciting. Even more innovation will occur when we integrate the power of next-gen mobility—leveraging 5G and what you can do at the edge will create the next innovation frontier.

Carabello: We are not seeing an innovation slowdown in the cloud communications space, but we are seeing many organizations closely evaluate their technology stack, given the macroeconomic uncertainty, and consolidate their software investments to reduce costs. We are also at a very exciting inflection point where we’re entering a new era of computing, as we turn the world’s most advanced AI models into a new computing platform.

An example of what this means for Teams and Teams Phone is the Microsoft Digital Contact Center Platform which brings together the collaboration capabilities of Teams with the rich agent experience of Dynamics 365, bolstered with industry-leading conversational AI from Nuance.


In Sum: The Need to Stand Out Will Drive Feature Development

Innovation continues in the cloud communications space and is likely to accelerate as vendors seek competitive differentiation. It will be interesting to watch how the vendors envision the role of AI, programmability and other enabling technologies in their solution roadmaps and evolving value propositions. It is likely that all vendors will eventually lead with AI-first value propositions, but don't be surprised if vendors will also define their offerings as multi-experience (MX) or total-experience (TX) solutions combining employee experiences (EX) and CX. As the market and solution sets are redefined, the innovation opportunities will expand exponentially.