The CPaaS Evolution: Frost Radar™ 2025 Highlights the Shift to Intelligent, Outcome-Driven Engagement

The Frost Radar™: Communications Platform as a Service (CPaaS), 2025 report by Frost & Sullivan confirms a profound structural evolution in the CPaaS market. Programmable communications are no longer merely a set of APIs for transactional messaging; they have become a strategic backbone for digital transformation, driving quantifiable business outcomes.

1. The Strategic Imperative: Outcomes Over Transactions

CPaaS has matured into a foundational layer for enterprise Total-Experience (TX) strategies. The most significant shift identified in 2025 is the pivot from transactional APIs to AI-powered orchestration.

• Enabling Outcomes: Enterprises are prioritizing platforms that can unify data, integrate with Customer Data Platforms (CDPs), and activate predictive or autonomous engagement through Large Language Model (LLM)–driven workflows.
• Convergence is Key: The boundaries between CPaaS, CCaaS, and UCaaS are actively blurring. Providers are adopting composable architectures to unify communications and engagement into a single orchestration layer, often accelerated by strategic M&A activity across the ecosystem.
• Decentralization of Innovation: The rise of low-code/no-code toolsets is democratizing access. This extends CPaaS adoption beyond traditional developers to non-technical business users in marketing and CX teams, accelerating time-to-market for new workflows.

2. Market Growth Drivers: AI, Network APIs, and Trust

The global CPaaS market continues to grow at a strong double-digit pace. However, the value is shifting significantly, favoring providers that blend innovation with disciplined execution across three core vectors:

A. AI as the Defining Differentiator

AI infusion and Generative AI (GenAI) are transforming communications into intelligent engagement engines.

• Leading CPaaS providers now expose AI copilots, conversational analytics, and workflow automation as programmable services.
• The report notes that AI has become the most consistent differentiator among CPaaS leaders, driving higher-value enterprise adoption beyond traditional use cases.
• Regional Investment Focus: A global survey noted that while messaging and authentication remain strong, Chatbot investments are growing the most in North America, and Voice APIs are expected to see the biggest boost in APAC, reflecting distinct regional digital priorities.

B. Network API Monetization

This emerged as a major growth lever in 2025. Initiatives like the GSMA Open Gateway and CAMARA are enabling carriers to expose verified, low-latency capabilities via standardized APIs.

• New Premium Services: Carrier-backed providers are capitalizing on this by positioning trusted network APIs (e.g., quality on demand, SIM swap, verified identity) as premium services that deliver both compliance and real-time assurance, opening new use cases across BFSI and government.

C. Trust, Compliance, and Fraud Mitigation

As regulatory tightening and fraud risks escalate, trust services have become integral to platform differentiation.

• The competitive frontier centers on verified identity, anti-fraud controls (such as SIM swap detection and branded calling), data sovereignty, and ethical AI governance.
• The demand for verified, compliant communication pathways is propelling renewed investment across the BFSI, healthcare, and government sectors.

3. Exotel’s Position: A Regional Challenger in Journey Orchestration

The Frost Radar™ analyzed the top 23 companies across four archetypes, and Exotel was recognized as a significant player among the Companies to Action.

Innovation Strength: Full-Stack AI Convergence

Exotel is evolving from an API provider into a journey orchestration vendor by integrating its programmable CPaaS APIs with a CCaaS suite (Ameyo) and conversational AI (Cogno AI) into a unified ecosystem.

• Core Differentiator: The Exotel Harmony AI-powered framework, featuring Agenoid (agentic AI where human supervisors guide AI agents) and a Conversational Context Data Platform (CCDP) for unifying customer data.
• The company serves more than 7,000 businesses, facilitating over 25 billion conversations annually.

Analyst Validation of Strategic Direction

The strategic success of this converged model is underscored by analyst commentary:

“Exotel continues to strengthen its position, evolving from a traditional API vendor into a journey orchestration vendor with credible convergence of CPaaS, contact center, and conversational AI capabilities. This direction bodes well with enterprises seeking unified platforms that modernize engagement and streamline operations, particularly in brownfield, voice-heavy environments in some of its key markets. Exotel’s flexible approach, supporting both stand-alone and bundled deployments, integrating openly with third-party AI models, and embracing performance-based commercial constructs, enhances its market appeal and positions the company well to address the next wave of demand for scalable, automation-led customer engagement.“

— Krishna Baidya, Senior Director, ICT Practice

Growth Strategy: Augment-Then-Modernize

Exotel’s growth motion is solution-led and sequenced, focusing on brownfield, voice-heavy environments common across India, Southeast Asia, the Middle East, and Africa. Its pragmatic strategy is to “augment first, replace later”—layering programmable voice on top of incumbent estates to solve pain points with low switching costs, driving strong growth momentum in these regional markets.

4. Best Practices for Buyers

The report advises enterprises to:

1. Demand Measurable ROI: CPaaS providers must demonstrate quantifiable business impact using ROI dashboards and performance analytics across engagement and efficiency metrics.
2. Embed Trust by Design: Insist on platforms that integrate advanced identity verification, anti-fraud controls, and consent management to safeguard users and adhere to regulations.
3. Leverage Verticalization: Prioritize vendors offering low-code/no-code builders and industry-specific templates that accelerate time to value, especially for regulated use cases in BFSI and healthcare.

The 2025 Frost Radar™ confirms that the next wave of CPaaS leadership will be defined by the ability to blend innovation velocity with execution at scale, pairing AI-enhanced programmable services with robust ecosystem-driven Go-to-Market models.

Legal Disclaimer

Frost & Sullivan is not responsible for any incorrect information supplied by companies or users. Quantitative market information is based primarily on interviews and therefore is subject to fluctuation. Frost & Sullivan research services are limited publications containing valuable market information provided to a select group of customers. Customers acknowledge, when ordering or downloading, that Frost & Sullivan research services are for internal use and not for general publication or disclosure to third parties. No part of this research service may be given, lent, resold, or disclosed to noncustomers without written
permission. Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the publisher.

For information regarding permission, write to: permission@frost.com