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Is the private PaaS a contradiction in terms?

Posted in The cloud and the open source by Manas Ganguly on May 7, 2013

Cloud is a enabling platform from the service and consumer stand point, but the key question that Cloud and PaaS (Platform as a Service) has to answer is the cost, control and security implication for businesses.

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


The big billions aside, making money and profits on a PaaS platform is a challenge- Customers (In this case Businesses and Enterprises) who are looking at cloud solutions are looking at it from a “Zero Capex”, “off Balance Sheet”, “Investment Light” -pay per use perspective only. However, the solutions that they need can get really complex and PAAS providers need to have the Platform under full and total control (Security threats and Data Privacy being the other key concern areas)

However, from the PAAS providers ( PAAS provider here is the business contemplating the PAAS) point of view – dedicated environments (hardware, hosting, programming, integration) needs to be a very inhouse activity with firm and total control on the processes systems and down times.

There in lies a dichotomy – Pay Per Use Return on Investments is mostly at odds with the project costs on data centre, people resources, provisions, security etc. Thus the PAAS providers need to look at a quick scalability of business to justify spends and investments on Cloud PAAS. Needless to say there are too many challenges doing this – you have to integrate Sales, Strategy, Clients, Investments and pay off horizons and many more aspects of the business to get the right direction. And yet, results couldnot be flowing in the first few months of the endeavour.

It is a bit of a Catch 22 in this business situation – but then any new technology and its implementation has its own set of challenges which can only be answered through scalability of the business model.

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