In my prehistoric college days, before the era of the personal computer, I did my computing on a “dumb terminal,” basically a keyboard and a monitor, with no independent CPU, no operating system, no apps. All of that was taken care of by a mainframe, which connected to my terminal and sent me everything I needed remotely. One of the amazing unintended consequences of the modern fast Internet is to recreate that model of computing through virtualization.

Nowadays, you do not have to own physical hardware, such as servers, on your own turf. Instead, you can subscribe to an Infrastructure as a Service (IaaS) provider. You connect over a wide-bandwidth Internet link to the provider’s cloud service, which provides all the virtual hardware you may need. The beauty of this kind of system is that if your fast-growing start-up needs to scale quickly, you can easily contract for more virtual hardware without ever worrying about buying the equipment and maintaining it.

A similar model allows the subscription company to actually provide apps over the Internet. This is Software as a Service (SaaS), and I have written about that before, on a basic level here, and in the context of the big tech giants here.

Sandwiched between these two is Platform as a Service (PaaS). In IaaS, you get the virtual hardware, but you have to install your own operating system and apps. In SaaS, all of that is taken care of for you. In PaaS, you get the virtual hardware and the OS running on top of it, so that you can install and develop your own apps. That frees you from having to worry about OS upgrades, and even better, the PaaS offers a programming environment with components for low-level functions that you can use in your code development without having to invent basic features from scratch, features like built-in security, directory services, and search functions. Developers can easily incorporate these into new apps without the hard work of creating them on their own.  Here’s a diagram from Microsoft that shows this pretty well:

(Source: Microsoft Azure)

Consider the total cloud computing market, and then we’ll take a look at PaaS within that ecology. Here’s the worldwide public cloud computing market:

(Source: Gartner, via Statista)

Note that the big dip in 2017 is a methodological artifact; per Statista, “The cloud advertising segment was removed from Gartner’s public cloud services forecast segments starting from 2017.” So the longterm story is one of solid and steady growth.

To put that in context, IDG and Forbes asked 550 IT professionals in 2018 about their use of cloud services and their forecast for future use. The results confirm that growth graph above:

(Source: IDG, Forbes, via Statista)

As of 2018, more than half of the respondents did not use any cloud services at all — but many of these expect to move to the cloud soon. PaaS subscription is the least utilized service, but it too shares in the growth to come, per IT pros’ forecasts.

Why is PaaS the smallest part of the pie? Well, anyone who wants to host a website or save money on hardware may well use an IaaS solution — that’s a decent target audience size, specifically, the entire World Wide Web. And everyone, even consumers, use SaaS products, so it makes sense that SaaS is the biggest part of the cloud market. On the other hand, the audience for PaaS, consisting particularly of coders and development firms, is not as large. How big is PaaS, in dollar terms? The two graphs above suggest PaaS is 9% of a $182 billion market, so, as a back of the envelope guesstimate, say $16 billion. Compare that to $15.6 billion reported by Gartner for 2018 … not too shabby for a guesstimate:

(Source: Gartner, via Statista)

The PaaS market is fragmented, with a number of large companies offering the subscription service. Take a look at the major players:

(Source: RightScale; Flexera Software, via Statista)

Amazon has been the top player in the PaaS market, but despite the lead shown in the graph above, Microsoft’s Azure has recently surged ahead. According to Mike Robuck, writing this month at Fierce Telecom:

• Microsoft pulled close to a 14% market revenue share while Amazon posted a 13.2% share, according to a recent report by IHS Markit. Following Microsoft and Amazon, IBM was third with a market revenue share of 9%. IHS attributed Microsoft’s success last year to its comprehensive portfolio and a growth spurt its experiencing from its more advanced platform-as-a-service (PaaS). [emphasis mine]

Some specialized PaaS offerings offer mobile communication, database, and video components too. PaaS solutions can also give a developer access to expensive business intelligence and analytical tools that would be prohibitively expensive to purchase independently. An essay at Oracle gives an excellent overview of the diverse flavors of PaaS varieties:

• PaaS offers ready-to-use programming components that allow developers to build new capabilities into their applications, including innovative technologies such as artificial intelligence (AI), chatbots, blockchain, and the Internet of Things (IoT). PaaS services also include solutions for analysts, end users, and professional IT administrators, including big data analytics, content management, database management, systems management, and security.

Writing at Forbes, Ruslan Synytsky offers advice on best practice in selecting a PaaS solution:

• There are several important points that should be considered before selecting a PaaS for your company. Above all, analyze if the chosen PaaS supports the technologies, middleware stacks and programming languages used by your development teams today or that planned to be used in the future. The next point to consider is vendor and data lock-in. Despite the benefits of some PaaS offerings, access to the application itself and used middleware stacks can be very limited due to the proprietary design of tools and services. This aspect affects application portability.

Insider Take

The ability to replace hardware, operating systems, and development tools with virtual and shared versions — through access to cloud computing — marks a real transformation for the tech industry. It also marks a change in business models: instead of investing in capital improvements, it is easier to just subscribe to the services you need, abandoning the drudgery and cost of buying computers and maintaining them on your own. For developers, the advantages of using a platform as a service are striking.