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Sizing and Analyzing the Telecom API Business


March 14, 2017

Whoever imagined that application programming interfaces would be the center of so much conversation? But it’s happening. And there’s good reason why.

APIs allow for ease of integration and more rapid innovation. And in the world of communications, those have become two key directives.

That helps explain why MarketsandMarkets is forecasting that the global market size for telecom APIs will be valued at $231.86 billion by 2021. The research firm says that market was worth $93.69 billion last year.

MarketsandMarkets says short message service, multimedia messaging service, and rich communication services APIs have the largest telecom API market share. Interactive voice response/voice store and voice control APIs are next on the list, according to the company. It also notes that the Internet of Things will help move the global telecom API market forward.


Alcatel-Lucent, Apigee, Aspect Software, AT&T, Fortumo, Nexmo, Orange, Telefonica, Tropo, Twilio, Verizon Communications, and Xura are among the major vendors in the telecom API market, according to MarketsandMarkets.

Companies like GENBAND (with its Kandy effort) and Twilio (which built a $1 billion business around APIs that allow developers to more easily bring messaging, voice, and now video to their applications) have helped popularize the idea of telecom APIs and embedding communications into applications. And today, many other suppliers in the business communications and networking arena are introducing APIs and other tools so developers can access their platforms as well.

Frank Stinson of IntelliCom Analytics said enabling anybody to embed communications into applications is what solutions like Avaya Zang, GENBAND Kandy, and Twilio are all about.

Computer telephony integration and communications-enabled business processes predated what’s happening with these solutions now, he added. The problem with CTI was you needed customer developers to create the solutions, so it was expensive and complex, he said. CEBP, meanwhile, was about SOA and broadened the developer community, he added, but was still quite technical and required deep understanding of business processes. However, Stinson explained, today’s cloud-based development platforms are designed for use even by non-techies.

“The key difference now is it’s much more accessible,” said Stinson. “You don’t have to be a developer to take advantage of some of this stuff now.”

However, analyst Jon Arnold said that embedding communications into business processes is harder than it looks and probably seems daunting to a lot of companies. Although Twilio has had great success building a business around APIs, Arnold said the company is still a young outsider that lacks integrations with CRM and OSS and all that complicated stuff. Companies like Oracle and SAP that created and sell ERP systems, he added, are probably in a better position to deliver embedded communications.

But a wide variety of companies within the business communications arena continue to work on the issue.

For example, 8x8 earlier this month announced its acquisition of team collaboration company Sameroom. Although Sameroom has a team collaboration tool of its own, 8x8 said it was primarily interested in the company’s ability to connect other team collaboration solutions in the marketplace such as Slack and Skype.

“Right now, there are all these solutions in the market,” said Andrei Soroker, Sameroom’s co-founder and CEO, “not one actually interoperates with another one.”

But Sameroom allows for interoperability through the integrations it built, he said, adding it was a difficult task and will not be easily duplicated by competitors. It was a challenge in part because some team collaboration solutions don't have APIs at all, he said. Others (like HipChat) have APIs, he added, but Sameroom had to work with them to change them to allow for interoperability.

Ramana Gottipati, vice president of product management at 8x8, added that the company is investing a lot in APIs.

8x8 competitor RingCentral also has preintegrations with a variety of other business application providers and it outfits its customers with public APIs so companies (like a London brokerage house that needed specific call recording capabilities to be compliant) can build their own solutions on its platform.

Meanwhile, ShoreTel has been emphasizing how its Summit solution brings together the company’s “telephony expertise with developer-friendly tools, voice and SMS APIs, and built-in application hosting so it is easy, quick, and cost-effective for enterprises and startups alike to build highly scalable apps.”

And video conferencing company Vidyo Inc. earlier this year announced the commercial launch of Vidyo.io, the communications platform-as-a-service offering it first announced in August. This CPaaS solution is designed to help developers more easily integrate video capabilities into their applications, business processes, and IoT devices. Because Vidyo’s solution was initially built to go into other solutions, APIs have always been part of its business, said Ben Pinkerton, director of product marketing at Vidyo. But, he added, developers were looking for APIs that were easier to use, didn’t require them to be experts in the technology, and didn’t require new infrastructure. Vidyo.io is the company’s answer to those requests.

Marty Parker of UniComm Consulting in a recent podcast indicated that embedded communications are the wave of the future. It’s very difficult to find a PBX company that wants to stay in the PBX business – including Cisco, Parker said, adding that NEC may be the one exception. All the other players, Parker suggested, are trying to get into adjacent businesses like collaboration and embedded communications to drive growth.

“The PBX,” he said, “is not the focus for enterprise communications going forward.”




Edited by Alicia Young

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