Gartner: PaaS IT spending set to soar over next four years

News Jane McCallion Nov 20, 2012
cloud arrow going up
cloud arrow going up

Sector revenue expected to grow as demand for cloud services skyrockets

Global platform as a service (PaaS) revenues are predicted to reach $1.2bn (£754.7m), a rise of 30 per cent on 2011, according to analysts Gartner.

The market watcher claims this figure will more than double over the next four years, rising to $2.9bn (£1.8bn) by the end of 2016.

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

For many SMBs, PaaS offers the opportunity to “take advantage of some state of the art enabling technologies, they otherwise could not afford,” Natis added.

According to Gartner’s analysis, the largest segments within the PaaS market by spend in 2012 are cloud application platform services (34.4 per cent), cloud application lifecycle management services (12 per cent), cloud BPM platform services (11.6 per cent) and cloud integration services (11.4 per cent). Between 2011 and 2016, it predicts the potential spending in PaaS technologies will average out to $360m (£226.3m) a year.

Fabrizio Biscotti, research director at Gartner, said: "Of all the cloud technological aspects…PaaS is the least evolved. For this reason, PaaS is where the battle between vendors and products is set to intensify the most.”

Despite the continuing global financial crisis, mature markets such as the USA, Western Europe and Japan are leading the way in PaaS adoption, accounting for almost 90 per cent of global spending. However, while emerging markets currently have limited engagement in the technology, Gartner expects this trend to change as the technology matures and the vendor landscape consolidates.

Natis said: “All software mega-vendors are strategically investing in the PaaS market despite the relatively modest projected market revenue. [They] expect their leadership…to translate to large and effective ecosystems of partners, developers and solutions.

“PaaS technologies are embedded in many other types of cloud services...the direct revenue in the PaaS market grossly underestimates the importance of this part of the cloud architecture,” he concluded.