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PaaS revenue for Cloud vendors to reach $1.2bn

Posted By TelecomTV One , 22 November 2012 | 0 Comments | (0)
Tags: cloud paas platform as a service Gartner SMBs Microsoft Research

Research firm Gartner says worldwide Platform as a Service revenue is on track to reach $1.2bn this year, with intensive competition between cloud vendors. Guy Daniels reports.

Worldwide platform as a service (PaaS) revenue is on pace to reach $1.2bn in 2012, up from $900m in 2011, according to a new report from Gartner. It believes that the market will experience consistent growth with worldwide PaaS revenue totalling $1.5bn in 2013, growing to $2.9bn in 2016.

 

Fabrizio Biscotti, research director at Gartner, says that of all the cloud technological aspects, infrastructure as a service (IaaS) and software as a service (SaaS) are the most mature and established from a competitive landscape perspective, while PaaS is the least evolved:

 

“For this reason, PaaS is where the battle between vendors and products is set to intensify the most. It comes as no surprise that the PaaS competitive landscape is still in flux, with traditional application infrastructure vendors facing competition from new large players moving into the market, and myriad specialized PaaS pure players cutting into their slice of profits.”

 

Yefim Natis, distinguished analyst at Gartner, says that the fundamental appeal of PaaS is the opportunity for independent software vendors and IT organisations to create new software solutions with minimal capital expense and without the hassle of configuring the underlying infrastructure. He adds that PaaS also enables SMBs the chance to take advantage of some state-of-the-art enabling technologies that they otherwise could not afford. Finally, the popularity of SaaS also drives adoption of PaaS for customisation, extension and integration of the cloud-based applications.

 

Gartner says that mature economies are on the forefront of PaaS adoption, and that whilst PaaS spending globally is relatively small, it is almost entirely generated by the US with 42 per cent of the market. When you add Western Europe and the mature economies of Asia/Pacific, these countries account for almost 90 per cent of worldwide PaaS spending.

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Emerging markets are currently only marginally investing in PaaS, but this trend is expected to change as PaaS matures as a technology and vendors consolidate.

 

Yefim Natis adds that all major software vendors are strategically investing in the PaaS market, despite the relatively modest projected market revenue:

 

“The vendors expect their leadership in the PaaS market to translate to large and effective ecosystems of partners, developers and solutions. PaaS technologies are embedded in many other types of cloud services – all major opportunity channels. The direct revenue in the PaaS market grossly underestimates the importance of this part of the cloud architecture.”

 

Within Gartner’s definition of PaaS are the following acronym-heavy services:

 

“Suites of application infrastructure services, such as application platforms as a service (aPaaS) and integration platforms as a service (iPaaS), as well as specialist application infrastructure services, such as database platform as a service, business process management platform as a service, messaging as a service and other functional types of middleware offered as a cloud service.”

 

Basically, pick a letter at random and prefix it to PaaS… Best just to stick to platform as a service perhaps. Furthermore, to increase the complexity of what is Paas, Gartner says users may subscribe to a cloud provider’s PaaS or may buy a cloud-enabled application infrastructure product and build their own PaaS for private cloud or public cloud consumption. Got that? And we haven’t even spoken about the sub-divisions of IaaS and SaaS yet…

 

To the joy of Scrabble lovers everywhere, Gartner says the largest segments within the PaaS market are cloud application platform services (aPaaS), accounting for 34.4 per cent of total PaaS spending in 2012; cloud application life cycle management services (almPaaS – with a Scrabble score of 11) at 12 per cent; cloud BPM platform services (bpmPaaS – 15 points in Scrabble) at 11.6 per cent; and cloud integration services (iPaaS – a mere 7 points) at 11.4 per cent. Other board games are available.

 

Gartner concludes that more than 70 per cent of PaaS functionality today can be referenced to an application infrastructure and middleware (AIM) capability. The largest AIM vendors (lead by Microsoft and some IBM acquisitions) have only a marginal share of the PaaS market and this leaves provides the opportunity for more competitive landscape disruption over the next three years.

 

Gartner predicts that the potential spending in PaaS technologies will be an average of $360m per year from 2011 through to the end of 2016.

 

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