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Platform-as-a-service (PaaS) is emerging as the next big cloud battleground for IT vendors.
Increased demand for cloud application infrastructure services will propel the PaaS market to $2.9 billion in 2016 from $900 million in 2011, according to Gartner. This year, the market is on target to reach $1.2 billion.
Why PaaS and why now?
As other segments of the cloud computing market stabilize and mature, vendors will start to eye greener pastures, says Gartner research director Fabrizio Biscotti. In a company statement, he remarks, "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," adds Biscotti.
Industry heavyweights won't shy away from this market, even if revenue growth fails to excite, explains Yefim Natis, distinguished analyst at Gartner. "All software mega-vendors are strategically investing in the PaaS market despite the relatively modest projected market revenue," he says.
For IT giants, PaaS represents a small, yet critical component in establishing big and potentially lucrative cloud ecosystems.
"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," informs Natis.
Over 70 percent of PaaS solutions fall into the application infrastructure and middleware (AIM) category. Established IT companies, notably acquisition-prone firms like IBM and Microsoft, are just now about to roll out their own AIM products and enter the PaaS market. Since they only hold a sliver of the market and the market is young, expect "more competitive landscape disruption over the next three years," says Gartner.
As it stands now, cloud application platform-as-a-service (aPaaS) takes the lion's share of the market. aPaaS will account for 34.4 percent of total PaaS spending in 2012. Rounding out the top four are cloud application life cycle management (almPaaS, 12 percent), cloud BPM platform services (bpmPaaS, 11.6 percent) and cloud integration services (iPaaS, 11.4 percent).
While a modest market at the moment, the U.S. leads in PaaS spending with 42 percent of the market. Mature economies -- classified by Gartner as the U.S., Western Europe and Japan -- make up nearly 90 percent of the global market. Emerging markets will begin to make their presence felt as consolidation and global rollouts from established players become the norm, predicts the research firm.