Platform As A Service Market - Forecast(2024 - 2030)

Platform As A Service Market Overview

The Platform As A Service Market size is forecast to reach $115.4 billion by 2027, growing at a CAGR of 12.8% from 2022 to 2027, attributed to the factors such as growing cloud computing adoption, increasing PaaS adoption in application development, and so on. The rising proportion of organizations opting to invest in platform-as-a-service models, digital transformation across enterprises, increasing cloud infrastructure spending, emergence of video communication PaaS and so on have been also influencing its market growth. Furthermore, significant transition of organizations towards public cloud and hybrid cloud, as well as rapid adoption in varied end use verticals such as healthcare, Banking & financial services, manufacturing is positively impacting the growth of platform as a service (PaaS) market. Moreover, increasing demand towards reducing application development costs, significant deployment of public cloud services, and so on can also assist the market growth of the platform as a service (PaaS ) in the long run.

Platform As A Service Market Report Coverage

The report: “Platform As A Service Market Outlook – Forecast (2022-2027)”, by IndustryARC covers an in-depth analysis of the following segments of the Platform As A Service (PaaS ) industry.

By Type: Application Platform as a Service (aPaaS), Integration Platform as a Service (iPaaS), Database Platform as a Service (dbPaaS) .
By Deployment Model: Public Cloud, Private Cloud and Hybrid Cloud.
By Organization Size: Small & Medium sized Enterprises (SMEs), Large Enterprises.
By Industry Vertical: BFSI (Banking, Financial Services & Insurance), Retail & Consumer Goods, IT & Telecom, Manufacturing, Healthcare & Life Sciences, Transportation & Logistics, Government & Public Sector, Hospitality, Energy & Utilities and Others.
By Geography - North America (U.S, Canada, Mexico), Europe (UK, Germany, France, Italy, Spain, Others), APAC (China, Japan India, South Korea, Australia, Others), South America (Brazil, Argentina, Others), RoW (Middle East, Africa).

Key Takeaways

• Integration Platform as a Service (IPaaS) segment is analyzed to witness the highest growth during the forecast period 2022-2027, owing to the growing demand for integrating data & services, and organizational shift towards cost effective and faster application integration platforms.
• Banking, Financial Services & Insurance (BFSI) industry is anticipated to grow at the fastest rate in the global Platform as a Service (PaaS) market during 2022-2027, attributing to increased adoption of cloud computing, rising shift towards the online transactions and so on.
• North America region dominated the global platform as a service (PaaS) market in 2021, owing to the factors such as significant adoption of cloud-based services by SMEs as well as large enterprises in the region, high R&D activities from major market players like VmWare and IBM Corporation.
• Growing demand towards minimizing operational costs for application development along with increasing adoption of cloud-based services & IoT technology among SMEs is analyzed to significantly drive the market growth of Platform As A Service (PaaS ) during the forecast period 2022-2027.

Platform As A Service Market Segment Analysis-By Type

Based on type, Integration Platform as a Service (IPaaS) segment is analyzed to witness the fastest growth in the global Platform as a Service (PaaS) market with a CAGR of 13.3% during the forecast period 2022-2027. The fastest growth can be attributed to the factors such as growing demand for integrating data & services, organizational shift towards cost effective and faster application integration platforms, as well as increasing adoption of low-code application programming environments. Due to capabilities of IPaas solutions like seamless connectivity, high extensibility and reusability, minimal data delivery delays, with many others, there is significant adoption of such solutions from organizations for handling cloud integration platform challenges. Furthermore, growing utilization of advanced technologies like IoT and big data, surge in cloud computing, as well as increased demand for microservices integration, is also driving the market growth forward. In November 2021, the study conducted by TeamDynamix and IDG, focused on examining the opportunities and challenges regarding enterprise integration and automation. This study revealed that 89% of the organizations faced data integration backlog issue, irrespective of in-house or third-party integration.

This study further stated that about 27% of companies have already invested on iPaas, with 66% planning to do so in the next 12-24 months. In February 2022, Pliant announced about the launch of Pliant iPaas, as its latest addition to API-focused product line. This developemnt was done to provide SaaS developers, businesses, as well as managed service providers with instant or immediate access to pre-built integrations for hundreds of popular vendor solutions. Such factors are set to accelerate the market growth of IPaaS in the coming time.

Platform As A Service Market Segment Analysis- By Industry Vertical

Banking, Financial Services & Insurance (BFSI) industry is anticipated to grow with the highest CAGR of 14.5% in the global Platform as a Service (PaaS) market during 2022-2027, owing to the factors such as increasing adoption of cloud computing, rising shift towards online transactions or digital payment services and so on. With features including high flexibility, improved customer experiences, cost reduction, data security and so on, adoption of PaaS solutions have been wide popularity across banks & financial service firms. Since Paas acts as a key enabler of centralized management of all integrated processes, improved cost efficiencies to support business strategies as well as modernization of channel & teller applications, eventually supporting the transitional shift of banks. According to Mastercard’s 2020 European Evolution of Banking Study, it was revealed that about 62% of respondents expressed an interest in switching from physical banking to digital platforms in 2020, a 13% rise compared to year 2017. In April 2021, a Canadian next-generation Fintech company, Brim Financial collaborated with Canadian Western Bank (CWB) to launch Brim's Platform as a Service (PaaS) and credit card infrastructure. This PaaS development was done to enable CWB offer a full suite of personal credit cards as well as an integrated digital banking platform with better accessibility meeting customer expectations. These factors are set to boost the market growth of Platform As A Service (PaaS) within the BFSI industry in the long run.

Platform As A Service Market Segment Analysis- By Geography

North America region dominated the global platform as a service (PaaS) market with a share of 35% in 2021, owing to the factors such as significant adoption of cloud-based services by SMEs as well as large enterprises in the region, high R&D activities from major market players like VmWare, IBM Corporation, Microsoft Corporation and so on. Increasing shift towards improvement in business operations across end use sectors like manufacturing, healthcare, IT & telecom, rising adoption of online banking or digital transactions, significant transition of organizations towards reducing application development complexities and so on have been also catering to the market growth in the region. In September 2021, VMware announced the launch of Tanzu Application Platform during VMware's SpringOne developer conference. Tanzu Application Platform is an application-aware platform that enables organizations of all sizes to create software development as a core competency, as well as unleash developer potential to deliver outstanding digital business outcomes. These factors can be considered vital in boosting the growth of Platform As A Service (PaaS) within North American markets.

Platform As A Service Market Drivers

Growing demand towards minimizing operational costs for application development is positively impacting the growth of Platform as a Service (PaaS) market:

 Growing demand towards minimizing operational costs for application development act as a major factor driving the market growth of Platform as a service (Paas). Adoption of Paas technology helps in eliminating the need to purchase hardware & independent tools, reducing time spent on maintaining stack, minimizing unforeseen expenses during downtime, and so on, which in turn is driving the market growth forward. With the constant demand for solutions capable of reducing time to market with faster application development processes, there is significant deployment of Paas by developers to ensure rapid prototyping and configuration, while gaining access to complete software development environments in real-time. Furthermore, PaaS lowers costs by avoiding capital equipment expenses associated with building & scaling an application platform, eliminate the cost of software licensing, lowers overall application management costs by handling patches, updates, & other administrative tasks, and much more. In October 2020, DigitalOcean announced the launch of a new platform as a service offering, named DigitalOcean App Platform, capable of automating infrastructure management in order to help developers in the deployment of codes to production within seconds. This development was meant to advance its managed services strategy for simplifying cloud computing, ensuring higher focus of developers and small and medium-sized businesses (SMBs) towards software creation. According to UpCity's May 2022 Costs of Developing a Mobile App Survey, 29% of companies spend $10,001-$15,000 on application development discovery phase costs, and 21% of companies spend $10,001-$15,000 on an average to design apps in the pre-development process. These factors have been eventually contributing towards boosting the market growth towards platform as a service (PaaS) for minimizing application development costs in the long run.

Increasing adoption of cloud-based services and IoT technology among SMEs is propelling the growth of platform as a service market:

 Increasing adoption of cloud-based services and IoT technology among the small & medium enterprises are propelling the platform as a service (PaaS) market forward. Adoption of cloud-based services in business helps in improving scalability of Internet-based database, lower costs and reduce risks. Incorporating IoT for data operations into systems have emerged as a crucial factor in driving the business growth of SMEs, thus supporting the market demands for Paas solutions. Big data analytics enable SMEs in customer interaction, improving efficiency, lowering operational costs, validating decisions, as well as identifying trends. In February 2021, Accenture partnered with VMware to launch a dedicated business group to assist enterprises in adopting a cloud-first strategy. It will allow faster app development, faster cloud migration, and the use of the cloud as the foundation for new businesses and innovation. According to Cloudwards' Cloud Computing Statics published in 2022, organizations are analyzed to rely highly on cloud computing with almost 48% of businesses choose to store its classified as well as most critical data, including both encrypted and regular ones, within cloud. These factors are set to accelerate the market growth of the platform as a service (PaaS ) in the coming time.

Platform As A Service Market Challenges

Security concerns associated with the adoption of Platform As A Service (PaaS ) services is restraining the market growth:

Security concerns associated with the adoption of Platform As A Service (PaaS) services act as a major factor limiting its market growth. In such environments, an attacker gets easy access to the resources of both the host and tenant objects, which raises security concerns. Additionally, security controls and self-service entitlements offered by Paas platforms, can potentially pose a security problem, due to improper configurations. In PaaS clouds, service providers can access and modify user objects, allowing the security of an object to be compromised. Impersonation, phishing attacks, brute force attacks, and password reset attacks are some of the key examples of attacks in such cloud-based environments. According to the Thales 2021 Global Cloud Security Study, it was reported about the severity of the security risks associated with cloud-based services. The study stated that almost 40% of organizations have experienced a cloud-based data breach over the past 12 months. Irrespective of these incidents, the majority of businesses (83%) have failed to encrypt half of the sensitive data stored in the cloud. Such factors are restraining the growth of the Platform As A Service market.

Platform As A Service Market Landscape

Product launches, acquisitions, and R&D activities are key strategies adopted by players in the Platform As A Service market. The Platform As A Service (PaaS ) top 10 companies include market include:

• Salesforce, Inc.
• Amazon Web Services, Inc.
• Google LLC.
• Microsoft Corporation
• IBM Corporation
• Alibaba Cloud
• Oracle Corporation
• SAP SE
• Nutanix Inc.
• VMware Inc.

Recent Developments

• In March 2021, Google Cloud announced a partnership with Tata Communications to expand its managed platform as a service-offerings with Google Cloud capabilities. The collaboration would allow businesses to deploy and access Google Cloud services through Tata Communications' IZO Managed Cloud while also providing them with ease-of-use and end-to-end services such as cloud architectural planning, ongoing operational support alongside migration of workloads.

• In February 2021, Microsoft launched Azure Stack HCI in India to provide organizations with advanced hybrid cloud capabilities, combined flexibility, scalability, and price performance. It is a software stack that combines infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) services technology to deliver the desired outcome.

• In February 2021, IBM announced a collaboration with Palantir Technologies, the collaboration combines IBM's hybrid cloud data platform for providing AI for business with Palantir's next-generation operations platform for developing applications.

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