What IT Leaders Must Know About the Adoption of Platform as a Service

Key Challenges

• Small or midsize businesses (SMBs) are often constrained in their ability to acquire state-of-the-art technology or the top talent for IT innovation by limited IT budgets.
• Many users depend on application independent software vendors (ISVs) that have limited technical expertise in application infrastructure and are not prepared to make a strategic transition to cloud computing, beyond simple infrastructure as a service (IaaS)-based hosting.
• Resistance to the adoption of cloud platform services by large IT organizations often results in business departments adopting cloud services on their own and then later turning to IT for support and integration.

Recommendations

• SMBs and technology startups should consider a gradual transition to cloud-only IT.
• Large IT organizations should anticipate increased use of public cloud resources and invest in cloud-aware application architectures, integration infrastructures, IT governance and open platform technologies.
• Most IT organizations should give preference to cloud services from ISVs that use established platform as a service (PaaS) or cloud-enabled application platforms (CEAPs) as their enabling technologies.

PaaS is the smallest of the three major layers in cloud architecture, behind software as a service (SaaS) and IaaS by nearly an order of magnitude in revenue, according to Gartner market research. However, several dozen vendors, including all of the software industry megavendors, are competing for a share of this market. Although there are some well-established offerings, the market is new and relatively immature. Many IT organizations and most ISVs are using or evaluating PaaS offerings, and the leading PaaS providers report rapidly growing adoption. This convergence of growing demand and emerging supply will produce a wave of adoption for PaaS services during the next five years. Like on-premises application infrastructure (middleware), much of the impact of PaaS technologies will be delivered through other products and services that would embed it. Although this is likely to keep the direct PaaS market relatively small, the impact of its leading technologies and architectures will be felt across the cloud computing spectrum.

PaaS is a category of cloud services that consists of many subcategories (we describe 11 of them in "Platform as a Service: Definition, Taxonomy and Vendor Landscape, 2012"), including:

• Application PaaS (aPaaS)
• Integration PaaS (iPaaS)
• Business process management (BPM) PaaS
• Database PaaS
• Application life cycle management (ALM) PaaS

Although aPaaS (e.g., salesforce.com's Force.com, Google App Engine and Engine Yard Cloud) are the most talked about today, in the long run, others, such as iPaaS (e.g., Dell Boomi, IBM CastIron and Informatica Cloud), may become equally or even more commonly used by enterprise IT. This research addresses the PaaS drivers that apply to any of the PaaS categories (although at present, aPaaS is the largest and most commonly used segment and other segments may have some unique additional adoption drivers).

A fast-growing number of mainstream IT organizations at SMBs and larger enterprises, as well as nearly all system integrators (SIs) and application ISVs, are using or evaluating PaaS services in some form. Some have already developed substantial expertise; others are still evaluating or experimenting with it. The pace and timing of PaaS service adoption (in place of traditional on-premises middleware products) varies. Different categories of users have different drivers pushing them toward cloud computing in general and cloud application infrastructure services in particular. Here, we examine the motivations to move to PaaS that we observed in some notable groups of IT buyers, including ISVs, SMBs and large-enterprise IT.

This research focuses on public PaaS; however, private PaaS is also an option for many organizations. The drivers to the adoption of private PaaS are often different (at least in part) from those that cause organizations to use public cloud services. Some cloud effects and cloud adoption obstacles are less pronounced in a private PaaS context than in the public cloud. An in-depth look at the drivers and the adoption scenarios for private PaaS requires a separate research project and is beyond the scope of this research.

SMBs and Technology Startups Should Consider a Transition to Cloud-Only IT

Cloud computing can make a strategic difference for many SMB organizations; however, many SMBs have limited IT budgets that constrain their ability to acquire state-of-the-art technology or the top talent for IT innovation. As IT continues to increase its role as a critical business asset in many industries, SMBs fall behind their larger business competitors. They become overburdened by the complexity and variety of new technology and the pace of change in their industry. More and more money is spent on IT solutions that the underpowered SMB IT organization is unable to fully implement, secure and maintain. Cloud-based platforms can offer SMB leaders the business and technical advantages that these organizations cannot match on-premises.

Many SMBs turn to the cloud in general, and PaaS in particular, to:

• Reduce or eliminate responsibilities for system administration, including selection, provisioning and support of enabling technologies
• Reduce or eliminate costs of disruptive application and platform versioning, replacing it with the continuous versioning offered by competent cloud platforms and services
• Achieve enterprise-class high availability and disaster recovery for applications and information
• Provide state-of-the-art security protection for data
• Gain productivity and obtain access to modern platform technology choices
• Gain access to state-of-the art platform technology at SMB prices
• Reduce the capital costs of IT
• Obtain applications and services that are available only in the cloud
• Concentrate IT resources away from infrastructure management and focus on the development of business solutions

These objectives are not always achieved, but all are possible in the real world.

Overall, the cloud platform technology market is relatively new and unproven (although there are some established and mature offerings). Many SMB users exercise caution, waiting to see standards, best practices and clear vendor leadership. Some are concerned with the potentially high long-term cumulative costs and the elevated risk of vendor lock-in. Nonetheless, interest by SMB IT leaders in the cloud as a platform for IT services remains strong. As the industry matures, many SMB leaders will be compelled to consider a gradual transition to all-cloud IT. Some leading-edge SMBs are already executing on such strategies.

Large IT Organizations Should Anticipate Increased Public Cloud Resource Use by Investing in Cloud-Aware Architectures, Integration Infrastructures, IT Governance and Open-Platform Technologies

Large IT organizations often resist the adoption of cloud platform services due to the perception that their quality of service (QoS) is unproven — the areas of security and privacy are the most commonly questioned. Often, this resistance (even if justified) results in the business departments adopting cloud services on their own, then turning to IT for support and integration after the fact. The line of business (LOB) adoption of IT services happens outside the established controls and policies standard in the IT organization, increasing legal and integrity risks for the organization. This so-called "shadow IT" problem is avoided in better-functioning IT organizations where IT leaders recognize the real industry trends and offer support to the business departments in their selection and use of cloud services.

Although most cloud platforms have not yet been proved to support the more complex and demanding large-enterprise applications, the advantages of cloud platforms in productivity, time to results and potential cost savings are not lost on the IT leaders in those organizations.

Although large-enterprise IT is the slowest to adopt cloud platforms for their software initiatives, they are gradually moving toward PaaS:

• To obtain services that are available only in the cloud
• To assist and manage the LOB shadow-IT initiatives
• To establish a neutral and trusted intermediary when multiple divisions of the organization must use a shared service
• To extend and integrate SaaS application services
• To dramatically reduce the time to start a software project
• To improve development productivity (especially when cloud-native PaaS is used), which, in turn, reduces the cost and time of producing custom applications
• To complete time-boxed projects (such as development/test projects or software in support of a limited-duration marketing campaign) at a low total cost, retaining necessary cloud platform services only for the limited duration of the project
• To replace capital costs with operational costs
• To manage applications with unpredictable and fluctuating peaks and valleys of demand — typically, consumer-facing Web applications

Most large enterprises with millions of dollars and years or decades of investment in their on-premises IT will not consider a transition to all-cloud IT for some time. The cloud is not the answer to all problems; however, it is for some. The foreseeable future for most large IT organizations is in hybrid IT and hybrid cloud computing, which, in turn, will require an investment in integration infrastructure that is enabled for hybrid IT. Users are well-advised to consider iPaaS offerings, along with the traditional enterprise service bus suites in their strategic integration planning.

Most IT Organizations Should Give Preference to Cloud Application Services of ISVs That Use Established PaaS or CEAP as Their Enabling Technologies

Many SMB organizations are attracted to the efficiency and agility of cloud platforms and cloud solutions. Most SMBs also prefer to buy solutions from ISVs, rather than develop them in-house. Looking to begin the transition to cloud computing, they turn to their ISVs hoping to migrate some on-premises applications and business processes to the cloud and to begin to reduce the costs and burdens of their on-premises data centers. Improved QoS (reliability, performance, scalability and availability) is often a positive side effect of cloud services adoption by SMBs because many smaller organizations are financially and otherwise unable to implement industry best practices or top enabling technologies within their IT organizations.

Users evaluating cloud application services must understand the platform choices made by the application ISVs. Most application ISVs have limited technical expertise in application infrastructure and are not prepared to make the strategic transition to cloud computing. Some choose a separately available PaaS or CEAP as their cloud-enabling platform (see "Platform as a Service: Definition, Taxonomy and Vendor Landscape, 2012"). They inherit cloud properties (such as elasticity and multitenancy) from the platform provider. Others use IaaS (such as Amazon Web Services) plus traditional platform middleware and must develop support for elasticity and multitenancy themselves (or be limited to the model of isolated tenancy, also known as hosting; see "Gartner Reference Model for Elasticity and Multitenancy").

To best serve their customer base, progressive ISVs turn to PaaS for their cloud projects to:

• Meet the demands of SMB prospects and customers by porting their on-premises applications as cloud services
• Eliminate costs of supporting multiple hardware and software platforms and versions of those platforms — an essential and burdensome requirement on-premises, where ISV customers often choose their technologies independently and differently
• Improve QoS (reliability, performance, scalability and availability) by leveraging the state-of-the-art software and hardware architectures of the large-scale PaaS providers
• Reduce the costs of maintenance, including version control, distribution and support of their applications
• Achieve high resource utilization, taking advantage of the elasticity built into cloud platform technology
• Have an opportunity to compete by offering lower customer costs by passing on the cloud provider savings in the cost of operations
• Build applications and services that take advantage of cloud-only opportunities, the cloud scope of information resources and can reach their customers only as a cloud service
• Reduce the financial risk of experimental projects, using leading-edge technologies and architecture and avoiding upfront capital investments
• Build cloud-native applications and services using development and runtime tools available only in the cloud
• Expand their geographic reach by offering their services globally and continuously

All of these drivers serve the users (as well as the ISVs) either directly or through savings passed on to them by the ISV in the form of lower costs. Users of application services offered by ISVs that instead use the IaaS with traditional platform middleware and custom cloud-enablement should prepare to pay more for similar services and experience a less-responsive, less-agile, slower-innovating application service provider.

Most IT organizations should favor cloud services of ISVs that use an established PaaS or CEAP as their enabling technology. In contrast to internal-only, homegrown, cloud-enabling technology, such platforms not only carry less viability risk and greater ability to innovate, they also typically form a better foundation for users to extend and customize the provider's application services.

The Bottom Line

Although the drivers vary and obstacles persist, the IT industry is moving to strategic use of cloud computing, including the growing use of PaaS. During the next five years, some organizations will gradually evolve to cloud-only IT (including cloud-only custom software development), most will manage a hybrid cloud/on-premises IT environment. IT leaders must include this prospect in all of their strategic planning. PaaS is the in-cloud infrastructure that will help users support the integration of hybrid environments and the deployment of custom cloud-based business services. IT leaders are well-advised to build skills and policies for the selection and use of PaaS.