“You don’t get a PaaS just because you’re SaaS.”

Apologies to Frank Scavo for twisting his quote  “You don’t get a pass just because you’re SaaS.” but this is a reaction to the trend that every cloud application vendor is offering a platform and actively recruiting developer communities.

I get the central principle  – configure in SaaS, but customize in PaaS. Keep the SaaS core clean. I also get the need to give business users productivity extensions, better analytics, low-code capabilities.  What I don’t get is why we are encouraging another generation of major customizations.

Here are several angles to consider:

Several cloud vendors are pointing to retirement of on-prem customizations as justification to move to their apps. Don’t new cloud based customizations take away from that ROI? SaaS is about the efficiency of multi-tenancy. By definition, customizations are single-tenant. They dilute the SaaS value proposition.

Customers don’t generally customize for the fun of it. Customizations are a result of holes in delivered application functionality. After two decades of SaaS, 80% of the corporate applications across global markets and industries still do not have much choice in the cloud. Maybe vendors should be investing more in SaaS, not PaaS? If your platform is so darned good, how come your developers are not 3x or 4x more productive and you multiply that productivity by coding that functionality once for thousands of customers?

The last generation of customizations was treated leper-like by software publishers. Vendors refuse to handle tickets which touch on customizations. This is one of the main reasons so many customers have moved to third party maintenance providers like Rimini and Spinnaker. Even more so than better economics, it is for their support of customizations. Will we see similar around PaaS?

Vendors argue that their ecosystems deliver lots of application functionality using their platforms. The reality in enterprise world is that lots of noise, not enough result. SAP must launch one of those stores every year – around HANA, around mobile apps, now in its AppCenter. Many folks will point to Force.com as a huge success. Huge success? It was launched around the same time as the Apple iOS store. There are now 20 million Apple developers creating apps and importantly Apple has paid out US$100 billion in revenue to these developers. How much have Salesforce partners made selling new apps in the same time period? Or compare to Fulfillment by Amazon. As much as 90% of certain product categories such as patio furniture sold on Amazon come from third parties. That’s validation customers are buying from platform partners. I don’t see enough of that around enterprise platforms.

Much of the excitement in developer communities these days is around cloud infrastructure, open source, and machine learning. Most PaaS from SaaS vendors provide ML gateways to Tensorflow or the PyTorch community. While these higher level services are useful, you have to be a bit wary what future licensing complications they are exposing customers to. Besides, shouldn’t PaaS bring its own value for the pricing vendors expect?

The  enterprise software industry has been blessed with brilliant technology architects – Larry Ellison and Thomas Kurian at Oracle (Thomas now at Google), Dr. Plattner at SAP, Parker Harris at Salesforce, Stan Swete at Workday among others.

In contrast, it has not had enough of what I call business process visionaries. So, Jeff Bezos of Amazon does not look to them for leadership when it comes to next-gen distribution centers. Manufacturers look up to what McKinsey calls Lighthouse examples. I cannot remember the last time a customer exec told me he/she found inspiration for the hospital or retail store or lab of the future from a application software vendor. Perhaps we need a rebalancing in vendor R&D. More of a functional focus.

Let me pull in an analogy from the food sector. You go to a restaurant you really like and the chef says we have changed our business model. We are only serving semi-cooked meals now. Enjoy the meal at home. Or come on in, but be aware we are now offering grills. You bring your own ingredients and cook your own. That’s a bit of SaaS vendors are doing with PaaS.

My 2c – we need better SaaS, not more PaaS – at least not PaaS from SaaS vendors!


(Cross-posted @ Deal Architect)

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CEO of Deal Architect, a top advisory boutique recognized in The Black Book of Outsourcing, author of a widely praised book on technology enabled innovation, The New Polymath, prolific blogger, writing about technology-enabled innovation at New Florence, New Renaissance and about waste in technology at Deal Architect.  Previously Analyst  at Gartner, Partner with PwC Consulting. Keynoted at many business and technology conferences and has been quoted in the Wall Street Journal, BusinessWeek, The Financial Times, CIO Magazine, and other executive and technology publications.