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PaaS market to hit $6.5bn by 2016, says new report

The platform as a service (PaaS) market is expected to reach $6.45bn by 2016 and grow at a compound annual growth rate (CAGR) of almost 50%, with application infrastructure and middleware PaaS expected to grow the fastest.

That’s the big takeaway from analysts TechNavio, having published the latest industry report entitled Global Platform as a Service Market 2012-2016.

According to the researchers, the market currently stands at $1.31bn, with that number expecting to rise to $1.85bn by the end of this year.

These figures correspond similarly with Gartner’s predictions, saying that PaaS revenue was on target to hit $1.2bn by the end of 2012 – yet TechNavio notes some difficulties in the current market, particularly the lack of best use practices and universally recognised standards.

PaaS, whilst remaining the smallest cloud market, is generally recognised as the fastest growing. Informatica’s Juan Carlos Soto, speaking to CloudTech earlier this year, said that PaaS was “starting from the smallest base and is poised to grow fastest for the foreseeable years”.

“Most organisations are realising the need to have an advanced system in place to enhance the process of developing, deploying and managing enterprise applications,” the report notes.

“Some of the enterprise software vendors that have not included PaaS in their portfolio are anticipated to face increased competition in the future.

“Hence, they must start focusing on building expertise in PaaS.”

Over three quarters of survey respondents said they used a PaaS implementation in alignment with SaaS (software as a service), as opposed to 32.6% who used standalone PaaS.

Yet the number using standalone PaaS will rise year-on-year, strengthening claims of the market’s maturation. 41.5% will use standalone by 2016, compared to 36.5% at the end of this year.

In terms of industry, the most popular PaaS industry was manufacturing, accounting for 21.5% of respondents, with financial services comprising 20.2% of the result.

Communications (16.1%), government (15.6%) and retail (10.2%) rounded off the top five.

The overall conclusion gleaned from the report, despite the challenges, is one of opportunity.

“Despite the challenges, the global PaaS market shows immense potential to grow,” a TechNavio analyst told CloudTech.

“Driven by various growth factors, the market is expected to improve its growth rate to 47% by 2014 and 52.9% by 2015. The market will reach its peak in 2016 when it is expected to grow at a growth rate of 55%.”

The full report can be found here. What’s your view of the PaaS market, and how far can it go?

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Categories: Enterprise, PaaS, Public, Research, Strategy, Trends
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