While infrastructure as a service has traditionally dominated the cloud, platform as a service has been gaining...
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ground, and not just as a kind of virtual operating system middleware platform like Azure. Even IaaS providers have added web services to their basic hosting, and these are creating custom clouds with more features than IaaS but less than full PaaS. "Service PaaS" is evolving from a pure horizontal feature focus to a vertical cloud focus, and to understand the trend, you have to look at the market targets, the high-level approaches being taken, and a development that may lead to the future.
PaaS differs from IaaS in that features are offered in the cloud, features that developers can exploit to create applications. It differs from software as a service (SaaS) in that there is still developer involvement in integrating these platform features into applications. Thus, the service platform model of PaaS can evolve from IaaS (by deploying features in the cloud) or from SaaS (by exposing customizing interfaces to developers).
The value of vertical market PaaS is its ability to support down-market users or decentralized enterprise IT. All business IT markets are made up of two segments, the enterprise buyers who are the largest consumers of technology, and the SMBs who make up the great majority of the business sites. A successful cloud strategy should address both markets.
In the U.S., about 1.5 million of the 7.5 million total business sites are satellite sites of enterprises, and slightly over 10% of these make IT decisions more at the line department level. That means there are over six million business sites that probably can't consume IaaS services directly, and many of these have requirements that SaaS offerings don't quite fit. Both types of cloud prospects get their in-house technology products and support from value-added resellers (VARs) or integrators, and they expect the same for their cloud services. That makes vertical cloud market PaaS a channel sale in many cases, rather than a direct sale.
Taking vertical cloud to market
There seem to be three ways that vertical market PaaS can be taken to market, and all are theoretically suitable to support VAR/integrator channels. One is to augment basic cloud services with vertical market partners, letting the specialists provide software features for the market they serve. The second is to provide features that facilitate application composition that facilitates vertical applications. These would be exploited by the VAR/integrator specialists. The third is to exploit specific horizontal cloud capabilities that are concentrated in vertical markets, tweaking these features to make them more appealing to a specific vertical market and set of channel partners.
Salesforce is a good example of the first approach. They have a large community of developers in their AppExchange partnership program, and many of these offer applications targeted at vertical markets, leveraging features of Salesforce's cloud. Amazon has also attracted a number of vertical-specialized VARs/integrators who host their software in Amazon's cloud, and also exploit some of the specialized web services Amazon makes available. Microsoft has attracted a similar community, leveraging both Azure and Microsoft's Windows Server platform.
Vertical market PaaS provides better, more user-specific tools for VARs/integrators to use in building their applications, reducing the effort required to create apps and the support the reseller has to provide once the customer is online. A rich partner program can also ensure that a vertical PaaS provider has access to a wide range of customers, building their vertical cloud revenue.
The problem with this approach is that the cloud provider has little control over the nature and scope of the applications provided. In some cases, buyers may evolve new requirements that would be addressed only if they changed their application vendor, often a difficult task, and key market areas might not be covered. Partner strategies are therefore usually combined with one of the other vertical PaaS strategies for optimum impact.
The second approach to vertical market PaaS is to create a "composition toolkit" that allows resellers (or, in theory, end users) to assemble custom applications from components. The tools can also form the basis for a developer/partner program, and by carefully planning the type of tools offered, a cloud provider can focus partners on the specific vertical markets they want to address. This approach is offered by most of the major cloud providers today, including Amazon and Microsoft. Mobile front-end tools, for example, can be combined with analytics and database tools and some partner-developed industry-specific components to create applications quickly.
The third approach is to target features that have special vertical-market needs. The most common examples of this approach today relate to the security/compliance tools associated with specific industries, such as Health Insurance Portability and Accountability Act (healthcare) or Sarbanes-Oxley Act (financial). Most of the major cloud providers have security/compliance/governance web services, but PaaS providers offer services easier to adopt and, most important, easier to prove out to regulators.
Vertical cloud trends
Internet of things is another example of how "composable" vertical market PaaS could evolve. A current cloud provider or a software specialist in a new technology will offer some PaaS features to facilitate adoption of the cloud in a particular vertical, and perhaps even host an entire application with hooks available for customization. This will attract resellers who already have relationships with the SMB user base or with the divisions of enterprises most interested in the new technology. That means IaaS offerings today may evolve first to horizontal-services PaaS, then to vertical cloud-services PaaS, and finally to a SaaS model.
One trend that's influencing vertical market PaaS across all the possible paths to realization is the "managed cloud." Firms like Rackspace specialize in offering professional services and tools that facilitate cloud adoption, and while these have traditionally been focused on horizontal feature segments to offer the widest total addressable market, there's growing interest in verticals like healthcare. These firms may gradually supplant VAR/integrator channels in the major verticals, and they may also put pressure on cloud providers to standardize the web services they offer to support specific vertical market needs.
IT is better if it does the job you want it to do, and that's as true in the cloud as it has been in the age of business-owned software and servers. Vertical market PaaS is the natural response of cloud computing to this "make it mine" mindset, and so it's likely to play an ever-growing role in cloud computing.
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