Cloud Cannibalism: Is PaaS Killing SaaS?

Let’s be honest: The cloud is a killer. Other than the microprocessor, I think we would be hard-pressed to find another technological innovation that has so effectively killed off its predecessors. For example — try to buy a piece of software packaged in an actual physical box. Sure, a handful of consumer-oriented PC applications are still sold in retail stores, but with enterprise applications — good luck. Even Microsoft (s MSFT) is pushing customers, both business and consumer, to the cloud for their products.

But is the cloud upping the ante, from tech killer to cannibal?

One of the earliest innovations brought about by cloud computing’s rise was Software-as-a-Service (SaaS). From to Google (s GOOG) Apps, SaaS has been the savior of small businesses and cash-strapped enterprises…but this notion is changing. XaaS has taken the spotlight from SaaS – everything from Platform-as-a-Service (PaaS) to Infrastructure-as-a-Service (IaaS) is eating away at SaaS dominance, leading many businesses to reconsider whether investing in SaaS is the right choice.

Don’t get me wrong, SaaS certainly has its upside. It’s low-cost and effectively turnkey, requiring only an Internet connection for the solution to be up and running. This great strength of SaaS, however, is also its biggest weakness — the product doesn’t actually belong to the end users. A typical SaaS solution is also relatively inflexible, requiring lengthy and expensive customization — great for plugging an application gap, not so great for building a business around. Just a few years ago, the downsides to SaaS were rarely discussed, and the alternative — custom application development — was seen as absurdly expensive and time-consuming, putting even the customization costs of SaaS to shame.

But that mindset is changing as other XaaSes, particularly PaaS, gain traction in the enterprise. PaaS essentially gives IT teams access to world-class development environments and infrastructure for what amounts to pennies, turning the old argument against custom application development on its head. Specifically, rapid application development (RAD) PaaS platforms are turning up the heat on inflexible SaaS, by speeding up custom development and slowly pushing SaaS out the door.

Essentially, RAD PaaS is comprised of two pieces: an IDE coupled with all the tools to manage the entire application delivery cycle (PaaS), a model-driven development language (RAD).  For the former, the IDE must seamlessly integrate with back-end deployment and management tools, allowing IT teams to streamline the entire application development, delivery and maintenance processes.  This exposes a whole host of functions, from configuration management and application deployment to monitoring and access control, which are delivered as services.

For the RAD component, a model-driven development language is layered on top of the IDE, dramatically simplifying the development process and allowing the development team to focus on the business, not the technology, problem.  The result is a streamlined development process that empowers not only IT, but also business stakeholders, to build applications incredibly fast, delivering working functionality in hours rather than weeks or months.

But why is RAD PaaS eating away at SaaS?

There are really three issues at hand for why PaaS, and RAD PaaS in particular, are providing a compelling alternative to SaaS.

  • Speed. Thanks to a set of seamlessly integrated services addressing the entire application development lifecycle, RAD PaaS streamlines custom development. This dramatically improves the pace of all aspects of the process, from access to the development, test and production environments to actually building and delivering the working application.
  • Cost. RAD PaaS cuts costs in several ways.  First, overall team size tends to be smaller, as the environment automates tasks typically completed by specialists, improving the efficiency of the full lifecycle of application delivery.  Next, economies of scale come into play when using cloud infrastructure, saving precious dollars.  Finally, custom applications provide a differentiator to the business at-large, providing a distinct value that’s difficult to calculate.
  • Flexibility. Through RAD PaaS, businesses gain the ability to deliver application functionality to accurately meet business needs.  This means no more suffering from misfit packages or struggling to extend existing functionality (a costly effort to undertake and maintain). Instead, custom applications now evolve with the business and stay almost ‘evergreen,’ resulting in applications that age very little and are inexpensive to change.

PaaS cannibalizing SaaS should not be looked at as a bad thing for the cloud – SaaS solutions will remain in play for many commodity applications across both small-scale operations and for larger enterprises, but their promise of speed to delivery and ability to scale is no longer a key differentiator.

The future of the cloud, and its next round of innovation, lies with RAD PaaS providing the ability to build applications, anywhere, at any time as fast as you can procure and configure a SaaS package.

And if the cloud’s future is hungry, shouldn’t we feed it?

Mike Jones is a 20 year veteran of the IT industry and currently serves as vice president of marketing for OutSystems, a provider of application development and platform-as-a-service solutions.