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2012 PaaS Revenue to Reach $1.2 Billion

Research firm Gartner predicts that worldwide platform as a service (PaaS) is set to reach a high of $1.2 billion in 2012, as compared to $900 million in 2011.

Market revenue is expected to increase as the years come with a total of $1.5 billion in 2013, and growing to $2.9 billion in 2016, according to the Gartner report entitled, “Market Trends: Platform as Service, Worldwide, 2012-2016, 2H12 Update.”

The category of PaaS includes suites of application infrastructure services, such as application platform as service (aPaas) and integration platforms as a service (iPaaS). It also includes specialist application infrastructure service, such as database platform as a service and other functional types of middleware offered as a cloud service.

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, as stated in the Gartner release.

“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,” said Fabrizio Biscotti, research director at Gartner. “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.”

Large segments within the PaaS market include:

  • Cloud application platform services (aPaaS), accounting for 34.4 percent of total PaaS spending in 2012.
  • Cloud application life cycle management (ALM) services (almPaaS) at 12 percent.
  • Cloud BPM platform services (bpmPaaS) at 11.6 percent.
  • Cloud integration services (iPaaS) at 11.4 percent.

On average, Gartner predicts that the potential spending from 2011 through 2016 is at $360 million per year.

“The fundamental appeal of PaaS is the opportunity for ISVs (independent software vendors) and IT organizations to create new software solutions with minimal capital expense and without the hassle of provisioning and configuring the underlying infrastructure,” said Yefim Natis, analyst at Gartner.

On a SMBs (small or midsize businesses) front, Natis says PaaS offers SMBs the “chance to take advantage of some state of the art enabling technologies, they otherwise could not afford.”

“Finally, the popularity of SaaS also drives adoption of PaaS for customization, extension and integration of the cloud-based applications,” added Natis.

According to Gartner, despite ongoing economic uncertainties, mature IT markets and economies, such as the United States, Western Europe and Japan, are on the forefront of PaaS adoption. While PaaS spending globally is still relatively small, almost all of it is generated by the United States with 42 percent of the market.

In total, the top three economies represent nearly 90 percent of worldwide PaaS spending.

“Application infrastructure, and in this case application infrastructure as a service (PaaS), has always played a central role in establishing the standards, architectures and best practices in enterprise software markets,” said Natis. “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.”

PaaS vendors include Newtek, The Small Business Authority, which is currently positioned as a top PaaS leader.

PaaS services provided by Newtek include Cloud Spaces, a platform hosting crafted specifically for Web professionals. In 2012, Newtek released the first-ever hosting control panel built in .NET.  With Cloud Spaces, Web professionals can enjoy the simplicity of traditional shared hosting with the power and performance of high-availability cloud computing.

Over the past 15 years, Newtek has constructed itself as the one of the most innovative and reliable IT platforms available to Web professionals.

When Web pros host their sites and applications with Newtek, they’re not just consuming Web space, but are able to leverage Newtek’s incomparable platform, which helps power today’s small-business economy.

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