Market demand for cloud application development

Enterprises around the world are embracing the cloud to rapidly deliver innovation to better engage with their customers and differentiate from the competition. Cloud-based application platforms, often referred to as Platform as a Service (PaaS), uniquely enable companies to accelerate their digital transformation by improving developer and IT productivity and agility.   While today much of the focus in cloud technology centers around Infrastructure as a Service (IaaS), it is the application platform services that can ultimately unlock greater innovation.

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Leading organizations are starting to recognize this.  In the recent Worldwide Semiannual Public Cloud Services Spending Guide, IDC estimated that PaaS will grow at a faster rate than Infrastructure as a Service (IaaS) and Software as a Service (SaaS) with five-year CAGRs of 30.6%. IDC states that “PaaS is important because it’s the focus at many companies for rapid application development and mobile app development, using the DevOps approach.” And, this growth also aligns with what we’re seeing in our customers. Azure App Service, one of our most popular Azure services that supports building enterprise web and mobile apps for any platform or device, hosts over 1 million apps and the number of Azure App Service customers has more than doubled over the last year. Today over 50% of Azure customers use both IaaS and PaaS and this number continues to grow.

Cloud’s impact is massive, and IDC predicts that the greater cloud spending (cloud services and IT products) will exceed $500 billion by 2020, driven by:

  • Growth in SaaS, PaaS & IaaS spending
  • 5-10x growth in new apps and services, including IoT and cognitive solutions
  • Penetration of “cloud code” into on-premise software
  • Expansion of cloud managed and professional services
  • Over half of large enterprises will double software and services development staff – 85% will be focused on new market facing apps and services
  • 50% of cloud applications and services are for use cases not served in the client server era
  • 70% of software revenues are based on cloud code – delivered as SaaS, PaaS or on-premise software, as ISVs build their on-premise software from their SaaS and PaaS

Gartner has recognized Microsoft Azure as a leader in their Magic Quadrant for Enterprise Application Platform as a Service for the third year in a row.  This assessment is based on completeness of Microsoft’s vision and ability to execute. Azure application platform services are designed to support the full spectrum of needs for app development, from professional developers building the next line of business application to business analysts who need a solution for an employee-facing mobile app.

New offerings like Microsoft PowerApps offers a business analyst solution enabling companies to keep pace with the growing demand for employee apps. Azure also provides a broad range of PaaS capabilities that support application development such as database management systems (DBMS), data analytics, IoT services, batch processing and more.

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