PaaS remains on the Edge - Why independent software vendors are reluctant to embrace Force.com
By Juergen Urbanski
At its user conference DreamForce’09, Salesforce.com released some impressive statistics on the traction that its Force.com platform has been gathering. The company claims 135,000 custom applications and 10,000 sites are built on Force.com. Already, 55% of the HTTPS transactions the company processes come through the API (i.e., from partner applications) versus only 45% coming from Salesforce’s own applications.
What drives that adoption and how does Force.com stack up against the alternatives?
New research [email info@techalpha.com] by GigaOmPro analyst firm TechAlpha contrasts the strengths and weaknesses of Force.com vs. platforms provided by NetSuite, Workday and Intuit. TechAlpha finds that PaaS is gaining most traction with corporate developers, not independent software vendors (ISVs).
Force.com benefits both corporate and ISV developers
Increased developer productivity is often seen as the biggest benefit, since developers can focus their effort on differentiating, customer-facing functionality, not application ‘plumbing’. Developer can build on existing, pre-defined data objects, security models, user interfaces, business processes and automated management. Building on Force.com reduces average time to deployment by 60% and cost by 54% compared to conventional web-based development platforms like .NET and J2EE.
Improved application manageability is another key benefit. The parent SaaS provider is economically incented to innovate around reducing complexity and automating IT operations, since it is paid a fixed monthly subscription. Moreover, the parent SaaS provider is able to deliver on this because it controls the entire application lifecycle, from design (on its PaaS platform) to operations (in its own data centers).
Additional benefits such as CapEx avoidance and ISV access to the PaaS vendor’s online market place complement the benefits.
But ISV adoption of PaaS will remain mostly at the edge
ISVs that consider building SaaS applications on these PaaS platforms are tying their commercial and technical future to a dominant partner who may or may not remain friendly in the future. Since PaaS vendors are likely to make far more money selling their SaaS application than their PaaS service, they are structurally incented to grow their SaaS footprint, which may eventually encroach on adjacent ISV partners. The direct cost charged by the PaaS vendor for use of functionality and data center infrastructure pales in comparison to these concerns about dependency.
Therefore, mainstream ISVs are unlikely to develop true standalone applications on these PaaS platforms. Rather, ISV applications will typically be adjacent to the PaaS vendor’s SaaS applications, a situation the industry refers to as ‘edge’. Edge applications might include marketing automation, talent management, project management, analytics, or collaboration. These edge applications provide a complementary process and synchronize key data objects with the core application. Core applications such as enterprise resource planning, supply chain management, and other transaction processing or business critical applications are unlikely to be built on another SaaS vendor’s platform.
Corporate developer adoption currently dominates
Corporate developers are usually less concerned than ISVs about long-term technology platform lock-in and are not tying their business model to that of the ISV. We estimate that most of the 188 million lines of Force.com code today come from corporate developers. Many of these would have previously been built on J2EE or .NET and a SQL database.
Advantage of SaaS-vendor provided platforms may be temporary
Over the next 3-5 years, the rationale for building applications on top of SaaS-provided PaaS will become less compelling. We believe that alternative PaaS platforms, evolving from popular web application frameworks, will likely capture greater share among corporate developers and ISVs. As J2EE, SpringSource/VMware, .NET, and LAMP mature into self-managing PaaS services, spanning across hybrid on-premise and cloud deployments, they will come to provide many of the current PaaS benefits while allowing developers to retain much greater control than most SaaS-based platforms. Moreover, these alternative platforms will offer the path of least resistance for the millions of developers trained in these traditional technologies.
Tags: application platforms, Force.com, Intuit, manageability, Netsuite, PaaS, Workday