As I assess the key developments shaping communication industry technology today, three trends jump out:
- The use of third-party APIs—the building blocks of the digital economy—will accelerate cloud communications adoption
- Agile enterprises will use cloud communications services as part of their digital strategies
- Real time communications will become a must for engaging customers
APIs for Communication Industry Delivery
The adoption of cloud services is not a new trend. Organizations have outsourced raw computing, data storage, online payments and email services for years. They’ve been using cloud hosting from Amazon Web Services (AWS), internet payments from Stripe and email from SendGrid since 2010, at least. Because the cloud model is proven, companies will only get more comfortable with outsourcing back-end services, including communications. That’s why I believe communications is well on its way to becoming the next technology stack to be entrusted to cloud providers, and the trend will accelerate.
Many tech startups have built their businesses almost entirely on third-party APIs. They understand the value of leaving their back-end services in the hands of cloud-based API providers. Not only does this approach free them from having to build the required infrastructure and manage delivery of the services but also the cloud model allows them to grow as quickly and as globally as they are capable.
In the communication industry, cloud communications providers have enabled many successful businesses to outsource the way they engage with customers, whether via SMS, chat or voice. For example, Uber, Alibaba and Snapchat all utilize Nexmo APIs in their communication stacks. As cloud communication platforms mature and improve, offering developer experiences with sample code, tutorials and libraries, as well as scalability for businesses, their adoption will only accelerate within digital natives.
Cloud Communications as Part of Digital Strategies
I’ll bet no one is watching the disruptive growth of software-led startups more closely than established enterprises. Any enterprise paying attention realizes that to stay competitive and thrive it must become a software company, able to grow and adapt quickly within its market. The digital economy demands agility, and many companies who have failed to adapt quickly enough are either dead or fighting for their lives. We’ve already seen this in several industries:
- Popular music—Spotify drowned out EMI
- Transportation—Uber ran Yellow Checker cab out of the taxi industry
- Hotels—Airbnb slept in Marriott’s bed
The agility imperative is behind the growing adoption of digital strategies. For example, GE has committed to generating $15 billion in software sales through a digital strategy by 2020. And recently, Wal-Mart agreed to pay more than $3 billion to acquire digital retailer Jet.com.
How does this play out in the communication industry? It comes back to APIs. Building software versus buying software is at the center of digital strategy, and APIs are enabling enterprises to build their software faster. That means being able to quickly embed communications into their customer experiences, which are a critical competitive differentiator.
Real Time Communications Needed to Engage Customers
Ask yourself what fundamentally differentiates an Uber from a taxi. I’d argue it’s not the ride from point A to point B. Rather, it’s the customer experience Uber has built around that service, an experience that depends heavily on real time communications—between rider and driver and between user and service. Today, customers across industries expect brands to deliver the type of engagement that real-time communications offers.
In fact, delivering real-time interaction and engagement has become a priority. Any business that wants to retain customers must offer this as part of a differentiated experience, and communication is a critical aspect of meeting that objective. Cloud-based communications is the solution more and more organizations will employ to achieve their customer engagement goals, which ultimately will drive better business outcomes.