PaaS Market - Outlook (2014-18) for Financial Services

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Tableof Contents

1. Introduction1.1. Report Description1.2. Objective1.3. Scope of the Research1.4. Regions Covered1.5. Key Takeaways1.6. Key Stakeholders1.7. Key Terminologies1.8. List of Abbreviations

2. Executive Summary2.1. Executive Overview

3. Research and Forecasting3.1. Research Methodology3.2. Forecasting Methodology

4. Industry Landscape4.1. Market Size and Growth4.2. Competitive Landscape4.3. Market Share4.4. Company Classification4.5. Region Outlook4.6. Market Metrics4.7. Porter's Five Forces Model4.8. Key Drivers Analysis4.9. Key Constraints Analysis4.10. Key Opportunities Identified4.11. Key Challenges Identified

5. Market Segmentation5.1. Vertical    5.1.1. Financial Services

    5.1.1.1.   Market Size and Forecasting    5.1.1.2.  Key Drivers Analysis    5.1.1.3.  Key Constraints Analysis    5.1.1.4.  Key Opportunities Identified    5.1.1.5.  Key Challenges Identified    5.1.1.6.  Sub Segments

    5.1.1.6.1.  End User : Mid-Size    5.1.1.6.2.  End User : SMB    5.1.1.6.3.  End User : Enterprise

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Introduction 01 4

1.  Introduction

1.1.  Report Description

Back in the days when cloud computing was in its infancy, companies started offering Software-as-a-Service (SaaS) and later Infrastructure-as-a-Service (IaaS) were introduced in the market. It is until very recently, that Platform-as-a-Service (PaaS) has been defined and vendors realized the potential in offering PaaS, which resulted in its identification. However, it is the companies offering PaaS that identify themselves with the offering and not the end-user. As it is a developer focused offering, customers are paying to drive IT costs out of the organization. Developers are directed to provide solutions cheaper than what the customers earlier received. A concept of less for more in traditional app development is replaced by more for less with the advent of PaaS. National Institute of Standards & Technology (NIST) defines PaaS which is followed by major corporates worldwide.

NIST defines PaaS as - "The capability provided to the consumer to deploy onto the cloud infrastructure consumer-created or acquired applications using programming languages, libraries, services and tools supported by the provider. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, or storage, but has control over the deployed applications and possibly configuration settings for the application-hosting environment."

PaaS market globally is witnessing a paradigm shift from its vanilla coding platforms for developers to code-free platforms. Global market conditions within the cloud computing space have been very skeptical about the evolution of PaaS but extremely positive of its growth in the decades to follow. As companies are ready to reduce IT costs, the developers are also keen on understanding developments in PaaS which would increase their rapid prototyping and subsequent product development. The turnaround time for app development reduces with PaaS which is also one of the reasons for its possible growth in the future.

Many countries are now passing regulations on cloud computing and scaling up their infrastructure, which has given ample hope to companies deploying PaaS. The start-up culture, often credited with the birthing of cloud computing has seen exponential growth in innovation which also involves infrastructure investments taken care by PaaS deploying firms. North America and Europe stand out as the cloud-ready markets but the emerging regions like South East Asia and Middle East are also tipped as major revenue markets for companies around the globe.

1.2.  Objective

1. To understand the PaaS market across the globe by addressing the challenges faced by the industry with regards to the adoption of PaaS.2.To estimate the size of present global PaaS market and its forecast.

1.3.  Scope of the Research

Scope of the research was limited to understanding the market share across segments. Key drivers, constraints and challenges along with their impact on various business functions in both short term and long term were addressed.1.End User Verticals2.Product Types3.Competitive Landscape4.

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Region based segmentation and forecast

1.4.  Regions Covered

1. North America (US, Canada & Mexico)2. Europe (United Kingdom, France, Germany, Italy, Spain)3. APJ (India, China, Japan, Philippines, Australia)4. South America (Argentina & Brazil)5. Rest of World (Middle East & Africa, Russia & other countries)

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1.5.  Key Takeaways

The research conducted to understand PaaS markets in different regions of the globe have revealed some really valuable insights. Some of the key take away points involve:1. PaaS market is gradually catching pace with developers vying to use respective platforms and enhance their application productivity innovation2. North America is the revenue focal point for PaaS closely followed by Europe and emerging markets in APJ (Asia Pacific including Japan)3. PaaS has enabled many startups to create innovative apps using platforms provided by major players like AWS, Google and Microsoft.4. The market size of PaaS is set to increase at a healthy CAGR from USD 1912 million in 2013.5. Information Technology, Financial Services and Retail have been major verticals benefited from PaaS. 6. PaaS market has been successful in attracting talent pool across the globe. This pool is working extensively on PaaS and trying to create new avenues7. Companies are moving towards open source and in this effort are creating a non-vendor lock-in facility encouraging users to effectively utilize this opportunity8. Java followed by PHP and .Net have been the popular languages used on various platforms ranging from AWS to Azure to CloudBees.9. The trade associations and groups are actively involved in creating the necessary customer awareness and help companies create requisite market to capture10. With an overall investment of close to USD 10 billion exclusively in PaaS, the companies are looking forward to ROI associated with this technology11. The emerging markets have witnessed a seasonality aspect to PaaS and its deployment 12. The evolution of PaaS has been projected to be the emergence of a code-free PaaS which creates a healthier ecosystem for innovative applications13. The niche players in the industry have been capturing good attention with exclusive offerings right from languages to verticals served14. Cloud washing has been rampant in the industry owing to the lack of customer awareness15. With major focus on developers, PaaS has not been victim of cultural barriers when targeting audiences in different regions

1.6.  Key Stakeholders

As a business owner or stakeholder, one needs to pay attention to clues on what is going to happen in the market, in order to stay ahead in the league. While it is good to participate with the own clan to understand the current market better and to mature sales performance in existing markets, a smart stakeholder will always seek information on its market and competition

The major beneficiaries of these reports are PaaS vendors, PaaS end users, PaaS service providers, Technology Investors, Cloud Consulting & Advisory firms.

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This comprehensive report allows companies to alleviate risk, recognize new opportunities and initiate effective strategies for growth.

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1.7.  Key Terminologies

1. Platform-as-a-Service (PaaS): Platform-as-a-Service is a sub segment of cloud computing that allows renting hardware, operating system, storage and networking capacity over the internet.2. Software-as-a-Service (SaaS): Software-as-a-Service is a cloud based software delivery method that gives access to software and its subsequent functionalities remotely through a web based service commonly an internet connection.3. Infrastructure-as-a-Service (IaaS): Infrastructure-as-a-Service is one among the three fundamental cloud computing models in which an organization outsources the equipment used to support operations like storage, hardware, servers and networking components.4. SMB (Service/Product Provider): A company generating revenue less than USD 500 million.5. Mid-Size (Service/Product Provider): A company generating revenue between USD 500 million and USD 2 billion.6. Enterprise (Service/Product Provider): A company generating revenue more than USD 2 billion.7. SMB (End user): Company serving less 200000 users8. Enterprise (End user): Company serving more than 200001 users 9. Cloud Washing: A services selling concept which associates the traditional products by prefixing or suffixing the word cloud.10. DevOps: a software development method that stresses communication, collaboration and integration between software developers and information technology (IT) operations professionals. It aims to help an organization rapidly produce software products and services.

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1.8.  List of Abbreviations

1. PaaS: Platform-as-a-Service2. SaaS: Software-as-a-Service3. IaaS: Infrastructure-as-a-Service4. FUD: Fear, Uncertainty and Doubt5. CSA: Cloud Security Alliance6. CCC: Cloud Credentials Council7. ACCA: Asia Cloud Computing Association8. USD: United States of America Dollar9. AWS: Amazon Web Services10. M&A: Merger & Acquisition11. NIST: National Institute of Standards & Technology12. SME: Subject Matter Expert13. MEA: Middle East & Africa14. SEA: South East Asia15. APJ: Asia Pacific and Japan16. DRaaS: Disaster Recovery as-a-Service17. IDE: Integrated Development Environment18. OS: Operating System19. CAGR: Compounded Annual Growth Rate20. ADA: Application Development Alliance

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Executive Summary 02 11

2.  Executive Summary

2.1.  Executive Overview

PaaS Ready to Capture Markets

Application development in an organization is riddled with the preparation of underlying infrastructure before venturing into development. The preparation includes database installation, application runtime and other third party software before the programming begins. Apart from these there are other external factors like internet connectivity, monitoring, backup and scaling which account for the app development. To take care of such operations and the mechanics of infrastructure necessary for app development, PaaS was born and has been on the watch of technology community ever since. With app development reaching new heights every passing month, PaaS is only going to get bigger and better.

By deploying PaaS, firms gain advantage in terms of speed and agility to get new apps up faster and easier, at lesser costs. PaaS, in effect has also been more about automation. Non-PaaS environments take considerable time to set up the necessary infrastructure which usually runs into months. PaaS brings a level of automation which helps app developers by providing a sturdy User Interface (UI), command line tools along with database options to name a few.

One more important factor is the demand for rapid application development (RAD) challenges faced by developers worldwide. With PaaS, many developers are now able to address this issue much quickly than ever before. PaaS has gradually evolved to be a fully declarative configuration based environment that integrates security, governance, scalability and legacy integration. This has provided the developers more ammunition to think on the app development.

PaaS is also important because companies using it have reported considerable amount of savings in development as well as financial aspects. The surprising element of PaaS also involves its ability to help non-developers turn developers. With end-user computing (EUC) expected to be driving the technology markets very soon, companies will have to adopt more with less approach and PaaS will help them in not only facilitating RAD but also helping end-users take care of some development needs themselves. By this, the organizations are thereby holding onto the development process rather than outsourcing it to an expensive third party.

Clarity in the distinction of markets being presented by the industry has also opened opportunities in the enterprise community to adopt PaaS. Therefore it would not be an aberration to say that PaaS is ready to capture the cloud market and provide much needed relief to the development community.

PaaS is infact Disruptive

Disruption in technologies is imperative. The level of disruption, however, is decided by the demand-supply canvas.

PaaS has its own reasons to be disruptive. Enterprises are gradually moving towards the app-centric model providing a golden opportunity for PaaS to flourish. By deploying PaaS, development teams have saved on high collaboration costs as well. The concept of write once and run anywhere has provided ample boost

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with the advent of BYOD. Requirement of platform independent apps by the BYOD concept will fuel the growth of PaaS. With large number of third party and freelance developers growing, PaaS will be the norm going forward.

PaaS is gradually making its presence felt by answering various questions within the development community. Rapid application development (RAD) fueled by 'more with less' requirement from companies has seen PaaS gain advantage within the technology circles. As other 'as-a-Service (aas)' offerings have conventional business end users, PaaS is more focused towards lessening the burden on developers. In the classical sense of disruption, PaaS may still have some road to travel but with the number of apps being developed every week, PaaS is all set to disrupt the conventional app development market in the industry.

By changing the way application development happens in an organization and expediting the process of app delivery with precision, PaaS is capable of reaching greater heights than anticipated. Therefore it is disrupting the very notion of conventional/traditional app development and delivery. However, with IaaS (Infrastructure-as-a-Service) faring better than expected in the past, it is only going to get better for PaaS owing mainly to agility. As PaaS sits on top of IaaS and makes app delivery fluent, there is potential in the market for this model to grow beyond expectations.

PaaS is all set to evolve into a code-free model. Companies are looking forward to the emergence of DevOps and agile methodologies thereby reducing the burden on end user and the developer to develop innovative apps. When code-free PaaS makes its way to the market, the end user computing markets will witness a paradigm shift of writing codes which will take it to the next level of innovation.

When innovation takes back seat to mundane activities prior app development, it becomes not only expensive but also monotonous duplicity of work. With the advent of PaaS, innovation has taken higher precedence and app development has witnessed higher quality being churned out ever since. Some of the drivers of PaaS market have been the emergence of DevOps, development and deployment tools. Many such drivers are going to result in the rise of PaaS. However, lack of enterprise scalability and customer awareness also are holding this market back. Companies are awaiting the developments in Open PaaS (PaaS based on open source) which will provide some more agility to the already agile PaaS environment.

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Research and Forecasting 03 14

3.1.  Research Methodology

Base Year: 2013Forecasting Period: 2014 - 2018

3.1.1.  Sampling

The leading suppliers of each end-user product categories that were chosen to provide a larger representative sample.

Purposive unit sampling was adopted for every service segment such as verticals, regions, end-users and others. This was resorted to, in order to elicit the appropriate inputs with regard to the qualitative growth aspects of the market.

3.1.2.  Secondary Research

The research methodology that was carried out was desk research through various journals, association reports, and in house database to build a knowledge base on various market service segments, product categories and industry trends.

Various fact based data was analyzed. Some of the sources included:

a. ResearchFox Knowledge Base:

Previous data on the market has been put through a rigorous and comprehensive analysis to analyze the current state.

b. Desk Research:

Industry reports, annual reports, press releases, webinars, journals and publication, independent rating agencies and government statistics.

3.1.3.  Primary Research

Primary interviews were conducted among various stakeholders:

Product and service companiesMembers of associations and alliancesSubject Matter Experts and EvangelistsConsultants and Strategists

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3.1.4.  Industry Information

It was essential to understand the current industry landscape, market dynamics, security ecosystem and competitor metrics. To estimate the global market, Chief Experience Officers (CXOs), Marketing Heads, Sales Managers and product stakeholders were interviewed.

3.1.5.  Technical Information

In addition to the interviews with leading participants for industry-related information, ResearchFox conducted interviews with Research and Development (R&D) and Design and Development teams to understand the current usage of the products by service type and also to find out the emerging trends. Finally, interviews with suppliers were conducted to cross check the validity of information and also to understand the emerging trends in the end-user segment. The detailed methodology for primary research is outlined below.

3.1.6.  Primary Interview Questionnaire Design

ResearchFox developed a detailed questionnaire, which was used by the analysts as a guide for their discussions. This process ensured the collection of all necessary data. The questionnaire was designed to elicit unbiased industry level data (market size, production, sales, and others), that had check points (questions such as company level information and their position in the industry acted as check points) to ensure accuracy of the data. The questionnaire included the following sections:

1. Industry level information2. Characteristics and Dynamics3. Company-specific information4. Market segmentation data

3.1.7.  Interview Questionnaire Test and Validation

Following the design of the questionnaire, ResearchFox carried out some initial interviews to verify that the appropriate market and technology data was generated. After the final design of the questionnaire, ResearchFox began full scale primary research. Specific companies targeted for primary research interviews were selected based upon market participation. Higher was the entity's profile, more attractive was the entity.

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3.1.8.  Interview Process

As participants respond in the course of an interview, ResearchFox analysts are trained to move from lower priority and/ or sensitive topics to increasingly key and/or sensitive topics in response to the interviewee's behavior. This responsive and reflective interview process, combined with the analysts' ability to discuss the industry and technical issues in an open and sharing environment, allows ResearchFox to probe for key data, operations, and competitive information. Multiple contacts within a single organization and with an individual are often planned and/or staged in order to optimize and complete the information gathering process.

3.1.9.  Research Validation

At a point, when 20 percent of the research interviews and/or data collection had been completed, ResearchFox consultants evaluated the preliminary findings to assure that up-to-date results are in line with project objectives. The analyst team analyzed the information from the interviews and information was validated through a combination of the following validation techniques:

Cross checking with other primary data and previously developed in-house researchReview of secondary information, such as trade journals, annual reports and industry directories

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3.2.  Forecasting Methodology

3.2.1.  Step-by-Step Methodology for Market Estimation and Forecasting

Market Estimation and Forecast Methodology, 2014

Step Method

1Understand the market mechanism for the market through structured, systematic and theoretically established norms of analyzing, designing, introducing and quality assurance of the market estimation

2 Measuring the various market drivers, constraints, opportunities and challenges at regular intervals of time

3 Integrate expert-opinion of discussions in consultation with the ResearchFox Analyst team

4 Market estimation and forecast calculation

5 Delphi method and Causal Analysis used as and when required

6Rigorous quality check with heads of Research Team, Subject Matter Experts and Consultants before final publication

Source: ResearchFox

Significance and Importance of the Market Forecast, 2014

Sr. No. Significance and Importance

1 Helps revisit on the company's R&D investments

2 Keeps the Sales and Marketing team posted on the market prospects

3 Strategize investment and expansion plans

4 Improve business planning

5 Helps create business aims and set sales figures within the company

6 Aware of the current market competition

7 Support plans for Merger and Acquisition (M&A)

Source: ResearchFox

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