Third platform technologies such as platform-as-a-service (PaaS) will see an exponential growth, with the global market for PaaS predicted to leap to more than $14 billion in 2017 from $3.8 billion this year, as companies look to cut infrastructure costs and speed up application development.
IDC speculated that by 2020, 40% of the industry's revenue and a whopping 98% of its growth will be driven by third platform technologies that today represent just 22% of ICT spending.
Why is IDC so bullish about PaaS and similar technologies? Let's explore.
For one, industries as varied as financial services (NYSE Capital Markets Community Platform); healthcare (AT&T's joint offering with Covisint); life sciences (Illumina's BaseSpace genomics cloud platform); and smart energy (Johnson Controls' Panoptix App Marketplace) increasingly are investing in PaaS.
In addition, there are indications of faster acceptance of PaaS. Organizations are increasingly investing in PaaS offerings such as Microsoft Azure, expanding the platform's penetration, IDC said. Companies are flocking to public PaaS because the technology can lower IT infrastructure spending while providing high availability and scale.
Because of competitive pricing, organizations tend to play it safe with public PaaS including salesforce.com, Microsoft Azure, Amazon Web Services, and IBM SmartCloud Application Services. (IBM sponsors Internet Evolution.) PaaS allows enterprises to focus on developing their own value-adds and creating applications more quickly because it simplifies functional and load testing. It's also easier for companies to deploy software, thus eliminating the need to reinvent the most common platform services.
Though these developments are helping enterprises cut costs, PaaS is also trespassing on a role once traditionally considered the domain of the IT department. By 2015, 35% of most companiesí technology-related expenditures will be managed outside the IT departmentís budget, Gartner predicted. The key factor driving PaaSí success is its unprecedented ability to bridge the great technology divides that have plagued IT departments for a long time, the research firm said.
A research study by K2 Advisory -- "Sourcing IT services for the journey: The impact of Cloud on Outsourcing" -- found that nearly two-thirds of CIOs would use a business service platform either because it would deliver the most cost-effective solutions in selected non-differentiating areas -- such as HR, payroll, finance, or procurement -- or because fellow industry players used it. Businesses have a clear preference for broad, horizontal business services, rather than sector-specific capabilities, the report determined.
CIOs are keen to embrace IT cost reduction in these areas without constraining organizational development, K2 found. Highly differentiated systems designed to deliver high added value are seen as less of a good fit for standard cloud delivery. One-third of organizations surveyed were already forging ahead to build their own in-house integration skills for cloud-delivered services; ironically, 43% of respondents do not expect to address integration issues for another one to two years. More than half of CIOs expect their internal IT capabilities to provide a service integration platform, and skills to deliver business agility around the use of cloud services.
To remain relevant in an age of PaaS, IT departments should adopt the following four-prong strategy:
Bridge the silos
IT staff can use the fact that they are uniquely fundamental across all departments to their benefit. It is the CIOís responsibility to bring awareness in the organization about the hidden dangers -- such as data security issues and cloud unpredictability -- that surround decentralized IT.
Participate in building and maintaining good working relationships with the vendors. That means getting involved in a user group if one exists for the application, participating on a customer advisory panel, or having regular face-to-face meetings with the cloud vendor. CIOs should insist that companies apply the same due diligence to cloud providers as they do to on-premises solution providers. Get everything in writing, and demand the same transparency that comes out of oneís own in-house IT operation
Provide a self-service platform
A good enterprise-ready PaaS will convert a static infrastructure into a dynamic powerhouse. An enterprise-ready PaaS will support any application written in any language and framework on any infrastructure that IT can access. From development through production, developers can control a self-service platform, which is safe and secure.
The service broker
CIOs must consider to what extent their internal IT department is acting as a service broker. Understanding how the cloud ecosystem develops for IT suppliers and outsourcing providers will be fundamental to IT strategies. It will become increasingly important over the next few years, and is a crucial component of sourcing IT services.
IT departments have to work out new strategies and figure out new avenues to remain relevant to the organization. Though remaining abreast of the latest technologies and adopting them is becoming increasingly challenging, with differential services the IT department can beat the competition.
— Talha Khalid is a teacher and business manager based in Pakistan.