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Innovation in Financial Services

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

The Platform-as-a-Service Revolution with IT management

08 November 2011  |  5246 views  |  1

Back in April, Forrester said the following about the PaaS market: “PaaS is the third-largest cloud category, with a market size of $820 million in 2011, and Forrester predicts steady growth as PaaS becomes a serious alternative for developing custom applications. Usage in corporate application development will take off in 2011, while service providers will engage more with PaaS from 2012 on”

We are seeing a lot of market movements in the PaaS arena, such as the acquisition of Heroku  (PaaS solution based on Ruby) by SalesForce for $212 million, or like SAP, Red Hat, and Software AG who have been doing similar acquisitions to position themselves in this growing market. For now, Microsoft (Azure) and Google (Application Engine) seem to be the best positioned.

So, what is PaaS all about? Let me try to summarize in three bullets:

  • A complete cloud-based development platform which allows
    • fast  IT delivery
    • in a very cost effective way

With PaaS you get instant access to all the development tools you need: from development frameworks to databases and test environments.  You don’t need to worry about hardware or licenses. With PaaS it is also easy to scale up and down. Developments can be quite quick since you are able to focus on the business needs from the very beginning, forgetting all the typical pain of IT pre-configuration to set-up the development environment. On top of that, deployments are just one click away, more consistent and with less possibility of human error since configuration management is mostly done by the platform. Moreover, you pay for only what you use.

To close the circle, most PaaS providers also offer IT management monitoring dashboards that help the operations of applications by providing relevant statistical information about usage, downtimes, etc. If well done, this is a dream for any CIO!

Some drawbacks

But not everything is roses in PaaS…  Some of the PaaS providers use proprietary languages that act as a barrier to entry because you may need to train or hire (at high rates) resources.

One other major obstacle I see is vendor lock-in. In fact, this lock-in is one of the main reasons why the main IT market players are trying to quickly position themselves in this profitable market.

The simplicity and ease of development and deployment of PaaS also has the capacity to “damage” the performance of the platform; if you are not well disciplined with your developments and configuration, your applications can suffer performance problems.

PaaS has also arrived in the ITSM industry. ServiceNow, ranked number five amongst the fastest growing companies in North America by Deloitte, allows their customers to automate IT processes but as well various non-IT processes such as HR, facilities, billing, finance, quality control, legal case documentation, telecom resourcing, conference and event management, and others. Key here is that ServiceNow uses a non-proprietary language, Javascript. Many of their current customers are building amazing applications within the platform. You can check some of them here. PaaS in ITSM offers companies the ability to integrate with a wide range of other business applications. Any effective PaaS must have SOA-based integration bus technology built in, or other similar architectures. This is one step more toward the difficult goal of aligning IT with business!

I see PaaS as an IT revolution that will change the way we develop our applications, and especially within the ITSM market. What do you think?

Albert Franquesa

TagsMobile & online

Comments: (2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 11 November, 2011, 09:51

Their proprietary nature and their vendor lock-in are strong downsides of PaaS platforms in themselves. But, when they come together, as they did when Google App Engine hiked rates 10-100X earlier this year, they tend to cripple or shutter down many apps built over them. More details can be found in the below article from InformationWeek.


Of course, the half-full view would be, these apps at least lasted a few months / years under the previous GAE price regime, and without GAE, they might never have seen the light of the day. 

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A Finextra member
A Finextra member | 15 November, 2011, 08:33

Thanks Ketharaman.

I still see more benefits than drawbacks when adopting PaaS. But as always, everyone needs to do a cost-benefit analysis!

I recomend you to have a look at this very interesting interview to Jeff Bezos http://www.wired.com/magazine/2011/11/ff_bezos/ where he talks about their cloud computing platform.


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