When the notice for a panel about enterprise PaaS I would be appearing on went live a while ago, it attracted the attention of an anonymous commenter. The tone of the comment was about what you'd expect from an anon--which is to say of a tenor that could result in rather unpleasant repercussions if delivered in person. But, that aside, the substance of the remark is worth considering. To wit, is it true that, as this individual wrote, "PaaS for IT is complete 100% BS. All new applications are SaaS. Who is funding IT to build new applications?"
It's not a completely risible opinion. After all, we don't need to look far to see great examples of Software-as-a-Service replacing packaged on-premise applications which, in turn, had often replaced largely bespoke software sometime in the past. Certainly, it's unlikely any business would write a payroll or benefits application for its own use and few enough would sensibly tackle custom customer relationship management given the existence of Salesforce.com, SugarCRM and others. Indeed, the idea that standardized functions can be largely commoditized is central to many cloud computing concepts more broadly.
But to extrapolate from such examples to the death of application development is to take an unfounded leap.
For one thing, it misunderstands a platform such as Salesforce.com. Yes, Salesforce is a SaaS used by countless enterprise sales forces and marketing teams to track customer contacts, forecasts, and sales campaigns. But that's the view from the perspective of the end user. From the perspective of independent software vendors and enterprise developers, Salesforce is a platform that can be extended in many ways. Just to give you an idea of scale, Dreamforce--Salesforce's annual developer conference--had over 90,000 attendees in 2012. That's a huge conference. Industry analyst Judith Hurwitz calls Force.com, the platform aspect of Salesforce, a "PaaS anchored to a SaaS environment."
Thus, even using a SaaS doesn't eliminate application development. In fact, it may enable and accelerate more of it by reducing or eliminating a lot of the undifferentiated heavy lifting and allow companies to focus on customizations that are specific to their industry, products, or sales strategy.
Another analyst, Eric Knipp of Gartner, states the case for ongoing application development even more strongly. He writes that "While I don’t debate that “the business” will have more “packages” to choose from (loosely referring to packages as both traditional deployed solutions and cloud-sourced SaaS), I also believe that enterprises will be developing more applications themselves than ever before." In fact, he goes so far as to call today "a golden age of enterprise application development."
The reason is that PaaS makes development faster, easier, and--ultimately--cheaper. But businesses don't have a fixed appetite for applications, which is to say business services that they can either sell or leverage to otherwise increase revenues or reduce costs. We're especially hearing a lot of talk around business analytics and "big data" today. Likewise for mobile. But, really, information and applications are increasingly central to more and more businesses, even ones that one didn't historically think of as especially high-tech or IT-heavy.
The companies that grew up on the Web have always had IT technology at their core. Nearly as well known are examples from companies that design and manufacture high technology components. Or financial services firms that depend on the latest and greatest hardware and software to rapidly price and execute trades. These types of businesses are cutting edge on the “3rd Platform,” as IDC calls it too—but that's what we've come to expect in these industries.
What's most different today is that the cutting edge IT story doesn't begin and end with such companies. Rather, it's nearly pervasive.
Media today is digital media. The vast server farms at animation studios such as Dreamworks are perhaps the most obvious example. And their computing needs have only grown as animation have shifted to 3D. But essentially all content is digitized in various forms. For example, sports clips are catalogued and indexed so that they can be retrieved at a moment's notice—whether for a highlights reel or a premium mobile offering, a huge monetization opportunity in any case.
How about laundry? Now, that's low tech. Yet Mac-Gray Corporation redefined laundry room management. It introduced LaundryView, which allows students/residents to monitor activity in their specific laundry rooms so they can see whether a machine is free or their laundry is done. It's been visited by 5 million people and the company has added on-line payment and service dispatch systems.
Agriculture is an industry that suggests pastoral images of tractors and rows of crops. Yet, seed producer Monsanto holds more than 15,000 patents for genetically-altered seeds and other inventions. (An area of intellectual property which may be controversial in some circles and geographies but which is no less striking for that.)
I could continue to offer examples both familiar and less so. However, the basic point is straightforward. Increasingly, information technology isn't something that is primarily important to a few industries and uses. Rather it's permeating just about every place whether it's about creating new types of services, better connecting to customers, increasing efficiency, delivering better market intelligence, or creating better consumer experiences.
And that means businesses will need to leverage platforms, of which Red Hat's OpenShift is a great example, that streamline their development processes and make it possible to more quickly and economically create the applications they need to be competitive. Will they leverage pure SaaS too? (And, for that matter, public cloud services such as provided by the likes of Amazon and Rackspace?) Sure. The focus should be on differentiating where differentiating adds value, not spending time and resources on me too plumbing.
But that's actually what PaaS is best at. Making it easier for developers to focus on applications, not infrastructure. Enterprise application development is a long way from dead. But maybe the old way of doing it is.
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