Platform as a service heats up

It's still a tiny market, but it's growing as vendors consolidate and more users give PaaS a try.

Of all the members of the cloud services family, platform as a service has been the slowest to grow and is the one that enterprises have had the most trouble adopting, despite its benefits. But experts think PaaS might soon shake its reputation as an underachiever.

Gartner estimates that worldwide PaaS revenue reached $1.2 billion in 2012, up just a bit from $900 million in 2011. That's peanuts compared to the $109 billion that the researchers estimated for 2012 from all hosted services, including software as a service.

PaaS is one step up from the infrastructure offerings like Amazon Web Services, which manage servers and the virtualization layer but leave the rest up to users. With PaaS, the provider also maintains the server operating system and typically an application development environment on top of that, so developers can focus on the application they are building, rather than keeping track of server software updates.

There are signs that the PaaS market is poised for growth. PaaS providers say that while the bulk of their users have been startups, the number of large enterprises that use the technology is increasing.

"Uptake was slow, but I think we're into a second generation [of PaaS] that's a little better suited to enterprises," says John Rymer, an analyst at Forrester.

Growth in the PaaS segment will still be relatively slow -- Gartner expects worldwide revenue to reach just $3.5 billion in 2017 -- but businesses should take note. Gartner analyst Yafim Natis says the revenue projection "grossly underestimates the importance of this part of the cloud architecture."

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