Platform as a Service (PaaS) Market - North America Outlook (2014-18)

PaaS Market - Outlook (2014-18)
for North America
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Table
of Contents
1. Introduction
1.1. Report Description
1.2. Objective
1.3. Scope of the Research
1.4. Regions Covered
1.5. Key Takeaways
1.6. Key Stakeholders
1.7. Key Terminologies
1.8. List of Abbreviations
2. Executive Summary
2.1. Executive Overview
3. Research and Forecasting
3.1. Research Methodology
3.2. Forecasting Methodology
4. Industry Landscape
4.1. Market Size and Growth
4.2. Competitive Landscape
4.3. Market Share
4.4. Company Classification
4.5. Region Outlook
4.6. Market Metrics
4.7. Porter's Five Forces Model
4.8. Key Drivers Analysis
4.9. Key Constraints Analysis
4.10. Key Opportunities Identified
4.11. Key Challenges Identified
5. Market Segmentation
5.1. Region
    5.1.1. North America
    5.1.1.1. Market Size and Forecasting
    5.1.1.2. Key Drivers Analysis
    5.1.1.3. Key Constraints Analysis
    5.1.1.4. Key Opportunities Identified
    5.1.1.5. Key Challenges Identified
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Introduction 01 4

1. Introduction
1.1. Report Description
Back in the days when cloud computing was in its infancy, companies started offering Software-as-a-Service
(SaaS) and later Infrastructure-as-a-Service (IaaS) were introduced in the market. It is until very recently,
that Platform-as-a-Service (PaaS) has been defined and vendors realized the potential in offering PaaS,
which resulted in its identification. However, it is the companies offering PaaS that identify themselves with
the offering and not the end-user. As it is a developer focused offering, customers are paying to drive IT
costs out of the organization. Developers are directed to provide solutions cheaper than what the
customers earlier received. A concept of less for more in traditional app development is replaced by more
for less with the advent of PaaS. National Institute of Standards & Technology (NIST) defines PaaS which is
followed by major corporates worldwide.
NIST defines PaaS as - "The capability provided to the consumer to deploy onto the cloud infrastructure
consumer-created or acquired applications using programming languages, libraries, services and tools
supported by the provider. The consumer does not manage or control the underlying cloud infrastructure
including network, servers, operating systems, or storage, but has control over the deployed applications
and possibly configuration settings for the application-hosting environment."
PaaS market globally is witnessing a paradigm shift from its vanilla coding platforms for developers to code-
free platforms. Global market conditions within the cloud computing space have been very skeptical about
the evolution of PaaS but extremely positive of its growth in the decades to follow. As companies are ready
to reduce IT costs, the developers are also keen on understanding developments in PaaS which would
increase their rapid prototyping and subsequent product development. The turnaround time for app
development reduces with PaaS which is also one of the reasons for its possible growth in the future.
Many countries are now passing regulations on cloud computing and scaling up their infrastructure, which
has given ample hope to companies deploying PaaS. The start-up culture, often credited with the birthing of
cloud computing has seen exponential growth in innovation which also involves infrastructure investments
taken care by PaaS deploying firms. North America and Europe stand out as the cloud-ready markets but
the emerging regions like South East Asia and Middle East are also tipped as major revenue markets for
companies around the globe.
1.2. Objective
1. To understand the PaaS market across the globe by addressing the challenges faced by the industry with
regards to the adoption of PaaS.
2.To estimate the size of present global PaaS market and its forecast.
1.3. Scope of the Research
Scope of the research was limited to understanding the market share across segments. Key drivers,
constraints and challenges along with their impact on various business functions in both short term and
long term were addressed.
1.End User Verticals
2.Product Types
3.Competitive Landscape
4.
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Region based segmentation and forecast
1.4. Regions Covered
1. North America (US, Canada & Mexico)
2. Europe (United Kingdom, France, Germany, Italy, Spain)
3. APJ (India, China, Japan, Philippines, Australia)
4. South America (Argentina & Brazil)
5. Rest of World (Middle East & Africa, Russia & other countries)
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1.5. Key Takeaways
The research conducted to understand PaaS markets in different regions of the globe have revealed some
really valuable insights. Some of the key take away points involve:
1. PaaS market is gradually catching pace with developers vying to use respective platforms and enhance
their application productivity innovation
2. North America is the revenue focal point for PaaS closely followed by Europe and emerging markets in
APJ (Asia Pacific including Japan)
3. PaaS has enabled many startups to create innovative apps using platforms provided by major players like
AWS, Google and Microsoft.
4. The market size of PaaS is set to increase at a healthy CAGR from USD 1912 million in 2013.
5. Information Technology, Financial Services and Retail have been major verticals benefited from PaaS.
6. PaaS market has been successful in attracting talent pool across the globe. This pool is working
extensively on PaaS and trying to create new avenues
7. Companies are moving towards open source and in this effort are creating a non-vendor lock-in facility
encouraging users to effectively utilize this opportunity
8. Java followed by PHP and .Net have been the popular languages used on various platforms ranging from
AWS to Azure to CloudBees.
9. The trade associations and groups are actively involved in creating the necessary customer awareness
and help companies create requisite market to capture
10. With an overall investment of close to USD 10 billion exclusively in PaaS, the companies are looking
forward to ROI associated with this technology
11. The emerging markets have witnessed a seasonality aspect to PaaS and its deployment
12. The evolution of PaaS has been projected to be the emergence of a code-free PaaS which creates a
healthier ecosystem for innovative applications
13. The niche players in the industry have been capturing good attention with exclusive offerings right from
languages to verticals served
14. Cloud washing has been rampant in the industry owing to the lack of customer awareness
15. With major focus on developers, PaaS has not been victim of cultural barriers when targeting audiences
in different regions
1.6. Key Stakeholders
As a business owner or stakeholder, one needs to pay attention to clues on what is going to happen in the
market, in order to stay ahead in the league. While it is good to participate with the own clan to understand
the current market better and to mature sales performance in existing markets, a smart stakeholder will
always seek information on its market and competition
The major beneficiaries of these reports are PaaS vendors, PaaS end users, PaaS service providers,
Technology Investors, Cloud Consulting & Advisory firms.
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This comprehensive report allows companies to alleviate risk, recognize new opportunities and initiate
effective strategies for growth.
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1.7. Key Terminologies
1. Platform-as-a-Service (PaaS): Platform-as-a-Service is a sub segment of cloud computing that allows
renting hardware, operating system, storage and networking capacity over the internet.
2. Software-as-a-Service (SaaS): Software-as-a-Service is a cloud based software delivery method that gives
access to software and its subsequent functionalities remotely through a web based service commonly an
internet connection.
3. Infrastructure-as-a-Service (IaaS): Infrastructure-as-a-Service is one among the three fundamental cloud
computing models in which an organization outsources the equipment used to support operations like
storage, hardware, servers and networking components.
4. SMB (Service/Product Provider): A company generating revenue less than USD 500 million.
5. Mid-Size (Service/Product Provider): A company generating revenue between USD 500 million and USD 2
billion.
6. Enterprise (Service/Product Provider): A company generating revenue more than USD 2 billion.
7. SMB (End user): Company serving less 200000 users
8. Enterprise (End user): Company serving more than 200001 users
9. Cloud Washing: A services selling concept which associates the traditional products by prefixing or
suffixing the word cloud.
10. DevOps: a software development method that stresses communication, collaboration and integration
between software developers and information technology (IT) operations professionals. It aims to help an
organization rapidly produce software products and services.
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1.8. List of Abbreviations
1. PaaS: Platform-as-a-Service
2. SaaS: Software-as-a-Service
3. IaaS: Infrastructure-as-a-Service
4. FUD: Fear, Uncertainty and Doubt
5. CSA: Cloud Security Alliance
6. CCC: Cloud Credentials Council
7. ACCA: Asia Cloud Computing Association
8. USD: United States of America Dollar
9. AWS: Amazon Web Services
10. M&A: Merger & Acquisition
11. NIST: National Institute of Standards & Technology
12. SME: Subject Matter Expert
13. MEA: Middle East & Africa
14. SEA: South East Asia
15. APJ: Asia Pacific and Japan
16. DRaaS: Disaster Recovery as-a-Service
17. IDE: Integrated Development Environment
18. OS: Operating System
19. CAGR: Compounded Annual Growth Rate
20. ADA: Application Development Alliance
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Executive Summary 02 11

2. Executive Summary
2.1. Executive Overview
PaaS Ready to Capture Markets
Application development in an organization is riddled with the preparation of underlying infrastructure
before venturing into development. The preparation includes database installation, application runtime
and other third party software before the programming begins. Apart from these there are other external
factors like internet connectivity, monitoring, backup and scaling which account for the app development.
To take care of such operations and the mechanics of infrastructure necessary for app development, PaaS
was born and has been on the watch of technology community ever since. With app development reaching
new heights every passing month, PaaS is only going to get bigger and better.
By deploying PaaS, firms gain advantage in terms of speed and agility to get new apps up faster and easier,
at lesser costs. PaaS, in effect has also been more about automation. Non-PaaS environments take
considerable time to set up the necessary infrastructure which usually runs into months. PaaS brings a level
of automation which helps app developers by providing a sturdy User Interface (UI), command line tools
along with database options to name a few.
One more important factor is the demand for rapid application development (RAD) challenges faced by
developers worldwide. With PaaS, many developers are now able to address this issue much quickly than
ever before. PaaS has gradually evolved to be a fully declarative configuration based environment that
integrates security, governance, scalability and legacy integration. This has provided the developers more
ammunition to think on the app development.
PaaS is also important because companies using it have reported considerable amount of savings in
development as well as financial aspects. The surprising element of PaaS also involves its ability to help
non-developers turn developers. With end-user computing (EUC) expected to be driving the technology
markets very soon, companies will have to adopt more with less approach and PaaS will help them in not
only facilitating RAD but also helping end-users take care of some development needs themselves. By this,
the organizations are thereby holding onto the development process rather than outsourcing it to an
expensive third party.
Clarity in the distinction of markets being presented by the industry has also opened opportunities in the
enterprise community to adopt PaaS. Therefore it would not be an aberration to say that PaaS is ready to
capture the cloud market and provide much needed relief to the development community.
PaaS is infact Disruptive
Disruption in technologies is imperative. The level of disruption, however, is decided by the demand-supply
canvas.
PaaS has its own reasons to be disruptive. Enterprises are gradually moving towards the app-centric model
providing a golden opportunity for PaaS to flourish. By deploying PaaS, development teams have saved on
high collaboration costs as well. The concept of write once and run anywhere has provided ample boost
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with the advent of BYOD. Requirement of platform independent apps by the BYOD concept will fuel the
growth of PaaS. With large number of third party and freelance developers growing, PaaS will be the norm
going forward.
PaaS is gradually making its presence felt by answering various questions within the development
community. Rapid application development (RAD) fueled by 'more with less' requirement from companies
has seen PaaS gain advantage within the technology circles. As other 'as-a-Service (aas)' offerings have
conventional business end users, PaaS is more focused towards lessening the burden on developers. In the
classical sense of disruption, PaaS may still have some road to travel but with the number of apps being
developed every week, PaaS is all set to disrupt the conventional app development market in the industry.
By changing the way application development happens in an organization and expediting the process of
app delivery with precision, PaaS is capable of reaching greater heights than anticipated. Therefore it is
disrupting the very notion of conventional/traditional app development and delivery. However, with IaaS
(Infrastructure-as-a-Service) faring better than expected in the past, it is only going to get better for PaaS
owing mainly to agility. As PaaS sits on top of IaaS and makes app delivery fluent, there is potential in the
market for this model to grow beyond expectations.
PaaS is all set to evolve into a code-free model. Companies are looking forward to the emergence of DevOps
and agile methodologies thereby reducing the burden on end user and the developer to develop innovative
apps. When code-free PaaS makes its way to the market, the end user computing markets will witness a
paradigm shift of writing codes which will take it to the next level of innovation.
When innovation takes back seat to mundane activities prior app development, it becomes not only
expensive but also monotonous duplicity of work. With the advent of PaaS, innovation has taken higher
precedence and app development has witnessed higher quality being churned out ever since.
Some of the drivers of PaaS market have been the emergence of DevOps, development and deployment
tools. Many such drivers are going to result in the rise of PaaS. However, lack of enterprise scalability and
customer awareness also are holding this market back. Companies are awaiting the developments in Open
PaaS (PaaS based on open source) which will provide some more agility to the already agile PaaS
environment.
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Research and Forecasting 03 14

3.1. Research Methodology
Base Year: 2013
Forecasting Period: 2014 - 2018
3.1.1. Sampling
The leading suppliers of each end-user product categories that were chosen to provide a larger
representative sample.
Purposive unit sampling was adopted for every service segment such as verticals, regions, end-users and
others. This was resorted to, in order to elicit the appropriate inputs with regard to the qualitative growth
aspects of the market.
3.1.2. Secondary Research
The research methodology that was carried out was desk research through various journals, association
reports, and in house database to build a knowledge base on various market service segments, product
categories and industry trends.
Various fact based data was analyzed. Some of the sources included:
a. ResearchFox Knowledge Base:
Previous data on the market has been put through a rigorous and comprehensive analysis to analyze
the current state.
b. Desk Research:
Industry reports, annual reports, press releases, webinars, journals and publication, independent rating
agencies and government statistics.
3.1.3. Primary Research
Primary interviews were conducted among various stakeholders:
Product and service companies
Members of associations and alliances
Subject Matter Experts and Evangelists
Consultants and Strategists
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3.1.4. Industry Information
It was essential to understand the current industry landscape, market dynamics, security ecosystem and
competitor metrics. To estimate the global market, Chief Experience Officers (CXOs), Marketing Heads, Sales
Managers and product stakeholders were interviewed.
3.1.5. Technical Information
In addition to the interviews with leading participants for industry-related information, ResearchFox
conducted interviews with Research and Development (R&D) and Design and Development teams to
understand the current usage of the products by service type and also to find out the emerging trends.
Finally, interviews with suppliers were conducted to cross check the validity of information and also to
understand the emerging trends in the end-user segment.
The detailed methodology for primary research is outlined below.
3.1.6. Primary Interview Questionnaire Design
ResearchFox developed a detailed questionnaire, which was used by the analysts as a guide for their
discussions. This process ensured the collection of all necessary data. The questionnaire was designed to
elicit unbiased industry level data (market size, production, sales, and others), that had check points
(questions such as company level information and their position in the industry acted as check points) to
ensure accuracy of the data. The questionnaire included the following sections:
1. Industry level information
2. Characteristics and Dynamics
3. Company-specific information
4. Market segmentation data
3.1.7. Interview Questionnaire Test and Validation
Following the design of the questionnaire, ResearchFox carried out some initial interviews to verify that the
appropriate market and technology data was generated. After the final design of the questionnaire,
ResearchFox began full scale primary research. Specific companies targeted for primary research interviews
were selected based upon market participation. Higher was the entity's profile, more attractive was the
entity.
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3.1.8. Interview Process
As participants respond in the course of an interview, ResearchFox analysts are trained to move from lower
priority and/ or sensitive topics to increasingly key and/or sensitive topics in response to the interviewee's
behavior. This responsive and reflective interview process, combined with the analysts' ability to discuss the
industry and technical issues in an open and sharing environment, allows ResearchFox to probe for key
data, operations, and competitive information. Multiple contacts within a single organization and with an
individual are often planned and/or staged in order to optimize and complete the information gathering
process.
3.1.9. Research Validation
At a point, when 20 percent of the research interviews and/or data collection had been completed,
ResearchFox consultants evaluated the preliminary findings to assure that up-to-date results are in line with
project objectives. The analyst team analyzed the information from the interviews and information was
validated through a combination of the following validation techniques:
Cross checking with other primary data and previously developed in-house research
Review of secondary information, such as trade journals, annual reports and industry directories
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3.2. Forecasting Methodology
3.2.1. Step-by-Step Methodology for Market Estimation and Forecasting
Market Estimation and Forecast Methodology, 2014
Step Method
1
Understand the market mechanism for the market through structured, systematic and theoretically established
norms of analyzing, designing, introducing and quality assurance of the market estimation
2 Measuring the various market drivers, constraints, opportunities and challenges at regular intervals of time
3 Integrate expert-opinion of discussions in consultation with the ResearchFox Analyst team
4 Market estimation and forecast calculation
5 Delphi method and Causal Analysis used as and when required
6
Rigorous quality check with heads of Research Team, Subject Matter Experts and Consultants before final
publication
Source: ResearchFox
Significance and Importance of the Market Forecast, 2014
Sr. No. Significance and Importance
1 Helps revisit on the company's R&D investments
2 Keeps the Sales and Marketing team posted on the market prospects
3 Strategize investment and expansion plans
4 Improve business planning
5 Helps create business aims and set sales figures within the company
6 Aware of the current market competition
7 Support plans for Merger and Acquisition (M&A)
Source: ResearchFox
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Platform as a Service (PaaS) Market - North America Outlook (2014-18)

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