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With IoT, PaaS market expands due to three major factors

Thanks to IoT, PaaS market share is increasing. Why? PaaS can bring scalability, customizability and manageability to IoT deployments.

The internet of things on the whole is on the rise: Analysis from IDC suggests that the global population of devices will reach 212 billion by 2020 and that the market size by that point will be around $8.9 trillion. To put that into perspective, this means that the IoT market in a few short years will exceed the current IT services marketplace by roughly an order of magnitude. If that sounds impressive to you, you're not alone; companies are betting -- and they're betting big -- on the future revenues this market might bring in the years ahead.

It should be no surprise, then, that we're seeing an influx of innovation in the IoT service market as providers move to cement positions in this potentially highly lucrative marketspace. Despite movement and growth across the board, there are some areas that are growing more quickly than others. One such area in IoT: PaaS markets. Companies such as LogMeIn with its Xively platform, Amazon's AWS IoT and Microsoft's Azure IoT Suite are all positioning themselves for enterprise customer adoption. Specifically, these services work by providing a set of core services, for example, a device registry, security and authorization services, message brokering and APIs to tie messages from sensors or devices to business applications.

For those investigating connected business solutions for their own organization's use, understanding the two major reasons the PaaS market is taking off -- thanks to IoT -- is important. First, the same dynamics that potentially make IoT PaaS' "killer app" are also dynamics that play critical roles in enterprise deployment. Second, understanding why these platforms are so successful in the IoT space helps organizations evaluate vendors on the basis of how well they perform in those areas.

Those familiar with cloud adoption generally already know that PaaS adoption has historically been light compared to other models. The annual Future of Cloud Computing survey from North Bridge, for example, pegged overall SaaS revenues in 2015 at $2.3 billion. While that may sound high at first, viewing that figure relative to SaaS ($53 billion) and IaaS ($25 billion) markets illustrates that the PaaS market, while successful, is certainly the smaller brother of the three.

This historically reduced adoption relative to other cloud models begs the questions of why service providers are investing so heavily in PaaS for IoT, and why is it the case that we're seeing established players such as Microsoft and Amazon moving forward with an IoT PaaS solution first while newer vendors like Xively (since acquired by LogMeIn) are developing the PaaS environment as the starting point? Moreover, why is it that many of the innovative use cases we're seeing emerge in the connected business realm are leveraging PaaS under the hood rather than on-premises models or, indeed, a turnkey SaaS model?

With IoT, PaaS market expands

First and foremost, scalability is a huge driving force. Now, scalability is a word thrown around in IT circles and has been for decades, but it means something a little different in a connected business or industrial application setting. For example, the overall number of individual devices in this context has the potential to be quite large -- larger than any data center, application deployment or indeed anything that most shops have encountered to date. It's true that there are large-scale systems and networks in other contexts, but for IoT it's a bit more complicated than even just the raw numbers. It's also about rapid and dynamic expansion, meaning that usage needs to scale up quickly in "elastic" fashion, first from pilot use cases to production, and then again as usage expands and new capabilities are added. This needs be done in a way that doesn't impact the services currently being provided. As you might imagine, the cloud is perfect for this as the cloud is all about rapid expansion, streamlined provisioning and "pay as you go."

That said, the requirement for rapid and seamless scalability would seem to be served by any cloud model; so why then is PaaS specifically seeing the uptick? At work is another factor that specifically favors PaaS: customizability. As we all know, every organization is different -- with variability in specific goals, methods of operation, expected outcomes for its connected business application and different business processes. These will vary in each and every situation. This variability makes it challenging both for service providers to build -- and for vendors to purchase -- a "turnkey" or off-the-shelf IoT solution. A PaaS instead allows organizations to customize. Since the underlying protocols devices use to communicate (e.g., MQTT, XMPP or CoAP) are lightweight and flexible, nearly any device or set of devices can be woven together in an almost infinite combination of ways. It's almost like "Lego bricks," snapping together in ways that can be orchestrated by a customer to accomplish the specific task or tasks that the business requires. Under the PaaS model, the expectation from the get-go is that users will customize. The provider gives and organizes the tools it needs to build and customize rather than trying to be everything for everybody.

The core services a business needs to ensure its application operates effectively -- features such as unique identification and authentication of individual devices -- are ones that are absolutely necessary for the service to function; but they also can be cumbersome and time-consuming for an organization to implement on its own. Like all things, they require maintenance and ongoing support. In the context of a PaaS offering, they're "plumbing." This allows the organization to focus on the specific business challenges they are trying to solve rather than the mechanics of setting up and maintaining specialized message brokering services, security services, and so forth.

Thanks to IoT, PaaS market expansion is inevitable due to very specific reasons. These areas are important for organizations to understand as they represent considerations to take into account when considering new connected business applications. Even if an organization makes the determination that a PaaS isn't the right approach for its particular situation -- for example because of cultural, security, legacy equipment or other reasons -- each of these considerations still have a bearing on the planning for those applications. They also should be systematically addressed for any effort beyond the early experimentation/prototyping phase.

Next Steps

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