One year after Microsoft introduced Windows Azure, the platform-as-a-service market is only about 1/20 the size of the rival infrastructure-as-a-service market led by Amazon's Elastic Compute Cloud, and about 1/50 the size of the software-as-a-service market.
While enterprises will spend US$112 billion on public cloud services over the next five years, only a small fraction of that amount will be devoted to platform clouds such as Windows Azure, according to Gartner.
So far, Windows Azure has 31,000 active subscribers and is hosting 5,000 applications, whereas competitors Google and Salesforce.com each claim at least 150,000 applications on their platforms. Microsoft, which opened Azure to the public on Feb. 1, 2010, acknowledges the market is a "longer-term play." Azure's leadership is in flux, with the departures of top executives Ray Ozzie and Bob Muglia.
"Platform-as-a-service adoption across the board has been lagging infrastructure-as-a-service and software-as-a-service," says Gartner analyst Richard Watson. "It's pretty anemic, especially when you talk about the enterprise market."
Gartner estimates 2010 revenue for platform-as-a-service (PaaS) at $140 million, compared to $2.7 billion for infrastructure-as-a-service (IaaS) clouds, according to an excerpt of a Market Profile report the analyst firm has not yet released.
PaaS revenue is expected to grow to $200 million in 2011 and to $650 million by 2014. But IaaS revenue will also soar to $4.4 billion in 2011 and $12.4 billion by 2014, according to the report.
SaaS revenues are expected to reach nearly $10 billion in 2011, and $20 billion in 2014.
Microsoft has said it believes platform-as-a-service is the future of the cloud market, despite the lackluster early adoption figures. While infrastructure-as-a-service clouds -- such as Amazon EC2, Rackspace Cloud Servers and GoGrid -- offer raw access to virtual machines and storage capacity, platform-as-a-service clouds give developers a more abstracted view of their cloud computing resources, making it easier to build applications.
While PaaS takes away some of the tedious management tasks required in IaaS clouds, PaaS offers less control over the underlying computing resources and makes it more difficult to move existing applications from an internal data center onto a cloud service.
"If you look at platform-as-a-service vs. infrastructure-as-a-service, IaaS makes it really simple to take an existing application, put it in a virtual machine and you're done," says Amy Barzdukas, general manager of server and tools marketing for Microsoft. "When you start looking at platform-as-a-service, some things are easy to migrate. Some things require applications to be rewritten. In many ways, it's really a longer-term play but we see the future of the cloud being in platform-as-a-service."
Gartner uses the phrase "relative immaturity" to describe the PaaS market, and Watson says there are several roadblocks to adoption.
Customers that want to move an existing application to the cloud will favor IaaS, and those that want to completely replace an app are likely to choose software-as-a-service, Watson notes. Platform-as-a-service requires making changes to existing applications "to suit the APIs and services you get from platform-as-a-service," he says.
Although Microsoft offers some ways of porting applications to Azure, including the ability to host Windows Server 2008 R2 on virtual machine instances, the company has said Azure is primarily intended for customers building new applications optimized for the cloud platform.
But measuring how successful Azure has been compared to its PaaS competitors is difficult, because each company seems to count in a different way. Microsoft notes that it has 31,000 active subscribers and 5,000 apps running on Azure. Google says its App Engine has been used by 250,000 developers who built 150,000 applications, which receive 1 billion page views per day. Salesforce won't say how many subscribers there are on Force.com, but says the platform is hosting 185,000 applications, though many are likely add-ons to the existing Salesforce.com service.
These numbers are certainly higher than the ones advertised by Microsoft, but Google and Salesforce had a head start, and the companies don't report usage in exactly the same way.
"It's impossible to compare apples to apples," Watson says. "If you really wanted to, you could say they're all covering up their lack of adoption by obfuscating the numbers. That might be cynical, but the main point is they're trying really hard to build platform-as-a-service adoption, but it's proving a lot more challenging than any of these vendors have expected."
Azure will have an advantage over competitors when it comes to running applications on its own .Net Framework. "Our enterprise customers that I've spoken to about platform-as-a-service expect to be running some fraction of their .Net apps on Azure at some point in the future," Watson says.
But on the whole, Google, Microsoft and Salesforce are pretty similar in terms of functionality, he says.
"From a features and capabilities point of view, all of the platform-as-a-service offerings are pretty much on par and have begun to close the gap on some of the features that were missing in earlier versions," Watson says.
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