IDC BUSINESS VALUE SOLUTIONS BRIEF

Leveraging Public PaaS to Drive Business Benefits

Sponsored by: Oracle
Robert P. Mahowald Larry Carvalho
Randy Perry
March 2016

OVERVIEW

The positive experiences that customers have had with consumer applications are influencing their
expectations for similar experiences with enterprise applications. Today's organizations are
significantly challenged to leverage their existing infrastructure to meet demands for new business
applications with increased functionality. Platform as a service (PaaS) is increasingly used for rapid
development of applications to address this need.

In 2015, IDC conducted a global survey of IT application developers and business leaders
regarding their adoption and usage of public PaaS technology. The organizations surveyed represent
4 geographic regions and 20 vertical industries and range in size from fewer than 1,000 employees to
over 10,000 employees. The analysis in this document integrates benchmarks calculated from this
research with in-depth interviews and analysis provided by IDC's Business Value Strategy practice.
The combination of the research yields an understanding of the business benefits achieved by
organizations exploiting aggressive adoption of public PaaS. The analysis found that companies with
optimized public PaaS adoption patterns enjoy the following benefits:

 Increased agility: 36–200% faster time to provision IT services

 Innovation: Up to double the budget available for new strategic projects
 Enhanced customer experience: 20–100% more business applications with up to a nearly
three times faster adoption rate
 Improved business performance: Increase employee productivity by as much as 34% and add
1–10% additional revenue each year

Challenges Facing PaaS Cloud Adopters Today

Now that cloud infrastructure is past its infancy, organizations can realize the benefits of taking
advantage of low-cost and reliable IT resources to deliver business needs. However, significant
challenges remain, and organizations still face numerous barriers to achieving these ends:

 Legacy systems: Organizations with a portfolio of legacy applications need a path to keeping
existing systems running while keeping pace with changing regulations, new competitors, and
challenging customer expectations.
 Culture: Development teams are also hobbled by archaic processes, slowing down adoption of
new techniques that are critical to delivering applications faster.

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  Skills: Adopting new cloud delivery processes requires appropriate skills, and IT departments
are challenged to acquire talent at a rapid pace.
 Quantifying business benefits: Traditionally, IT has been viewed as a cost center; therefore, a
common reason for adopting new technologies is to lower costs. However, a major component of
the value of public PaaS is better business agility, which is often overlooked by decision makers.
 Lock-in: Buyers sometimes hold back on adopting technology because they fear being stuck
with the same vendor for a long time. Some characteristics of public PaaS architecture and
design tend to raise that concern because of the requirement of the platform to handle all
aspects of the application development deployment life cycle.

PaaS Cloud Adopters Use Cases

Public PaaS adopters have found a great deal of success leveraging PaaS in the following use cases:

 Move dev and test to the cloud — Enable the organization to deploy anywhere and quickly:
 Provide faster spin-up of dev/test instances — time to market
 Having 100% compatible database and apps as on-premises simplifies cloud migration
and hybrid implementation
 Easily extend database deployment from on-premises to cloud
 Move production workloads to the cloud — Build a nonintrusive step-by-step path to migrate
existing applications from on-premises to SaaS with PaaS:
 Allow coexistence of on-premises and cloud-based applications through integration flows
 Simplify integration through common tools for hybrid cloud and on-premises applications
 Consolidate cloud management tools to a single solution, regardless of cloud or
on-premises deployment
 Extend SaaS to support unique requirements — Extend SaaS applications with rapid, easy
development via PaaS:
 Enrich user experience and application functionality
 Tailor SaaS apps based on rapidly changing business needs
 Enable lines of business (LOBs) to self-serve extension development through forms-based
customization
 Connect and integrate apps to improve business agility and processes
 Customize data analysis and reporting
 Simplify enterprise mobile connectivity — Easily and securely connect mobile applications to
enterprise back end:
 Simplify mobile app dev with consistent access to back-end services
 Increase time to market with reuse of commonly used mobile services
 Reduce time to developer proficiency by leveraging existing skill sets and common
standards
 Secure mobile users, applications, and content with enterprise-grade security
 Analyze Big Data in the cloud — Easily prepare data in the cloud from on-premises data
warehousing and Big Data systems:
 Equivalent of "dev/test" model for data analysis (This allows for ad hoc data analysis in the
cloud without having to provision an entire new BI/data warehouse on-premises.)

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  Prepare, repair, enrich, govern, and publish any data throughout the enterprise with a
single unified cloud-based solution
 Spend more time analyzing data by minimizing time preparing data for analysis through
business user-friendly authoring
 Augment and enrich data based on rich semantics and innovative machine-learning
recommendations
 Connect external and internal data sources to obtain deep insights for decision-making
purposes

Framework for Public PaaS Adoption and Optimization

IDC has identified five levels of public PaaS adoption (ad hoc, opportunistic, repeatable, managed,
and optimized). As enterprises move forward in adopting platform as a service, the value accelerates
rapidly, contributing to overall IT delivery effectiveness and supporting better business outcomes (see
Figure 1).

FIGURE 1

Public PaaS Adoption Levels

Ad Hoc Opportunistic Repeatable Managed Optimized

 Beginning the  Experimenting with  Enabling more agile  Expanding the  Driving business
exploration process standardized offerings access to IT resources boundaries of how innovation through
with public PaaS and developing more through increased use they use public PaaS seamless access to IT
 Still using a cloud-last public PaaS of public PaaS  Consistent, best resources
approach to deploying deployments platforms practice enterprise-  Using public PaaS for
both new and existing  Minimal impact on  Adopted a cloud-first wide approach to over 50% of
applications existing business approach for using cloud to increase application
 Plan to continue to processes PaaS with new cloud adoption and development work
provision and deploy applications and business value to greatly lower costs
applications from cloud-also approach and speed up the
their datacenter for existing applications application delivery
process

Source: IDC, 2016

The five public PaaS adoption levels are described as follows:

 Ad hoc — Beginning the exploration process:

 Experimentation with public PaaS conducted by developers is often disconnected from the
IT department. Security and governance policies are often overlooked because of the low
risk of these initiatives, which often are single-use marketing campaigns.
 Major benefit is gaining insight into public cloud offerings while building skills in PaaS
technology.
 Opportunistic — Experimenting with standardized offerings:
 Multiple development centers of excellence collaborate to build frameworks for adoption
and integrating internal and external systems. Strong integration and security frameworks
are used at this stage.

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  Better delivery models are created with reduced risk via an in-depth understanding of
PaaS concepts while gaining a high-availability architecture.
 Connecting SaaS solutions to on-premises and other cloud has become common,
enabling efficient business processes.
 Repeatable — Enabling more agile access:
 Lessons learned in the previous stages are used to allow developers to independently
leverage infrastructure with minimal administrative overhead. LOBs are actively involved
in the complete life cycle of application development and delivery, thereby helping
business agility.
 Rapid delivery of applications becomes common, especially when moving workloads to
the public cloud.
 All new applications start to be built completely on the public cloud.
 Managed — Expanding the boundaries:
 Mission-critical applications are built on the public cloud leveraging multiple supporting
services such as analytics and mobile enablement.
 Workload portability and consistent security standards allow larger volumes of workloads
to be run on the public cloud.
 Security parity for on-premises applications can be gained through public cloud resources
— at much lower costs.
 Scalable resources help deliver a much better customer experience.
 Optimized — Driving business innovation:
 The entire organization has a single cloud-first strategy with consistent policies followed by
development teams. Lower costs and risks tied to infrastructure abstraction provide
application owners with minimum friction through the application development life cycle.
 Innovation is delivered with minimal IT involvement as business users drive new solutions.
 Clear understanding of PaaS value throughout the organization drives further
transformation, helping overcome any disruptive threats.
The analysis in this document integrates benchmarks calculated from a global survey of IT application
developers and business leaders conducted by IDC in 2015 and in-depth interviews and analysis
provided by IDC's Business Value Strategy practice. Organizations thinking about adopting public
PaaS technology should consider the following findings from this research:

 52% of organizations described their organization's general posture toward using public PaaS
for new IT services as "cloud first."
 Security is still the leading concern or challenge faced when adopting cloud solutions.
 Nearly two-thirds of optimized organizations are conducting more than 50% of their application
development and testing using public PaaS.
 75% of all organizations indicated that it is very important that public PaaS services be open
and standards based.

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Improving Business Outcomes with Public PaaS
IDC conducted in-depth interviews with organizations at the optimized level of public PaaS adoption.
This research has shown that organizations with advanced levels of public PaaS adoption exhibit
stronger business results and experience significant improvements in their business outcomes
compared with less advanced organizations. Organizations at the optimized level of public PaaS are
seeing significant gains compared with organizations at the ad hoc level (see Figure 2).

FIGURE 2

Business Outcome KPIs Improvement of Optimized Organizations Over Ad Hoc

Organizations

Business applications available to mobile users 129

Number of applications deployed 92

Time in weeks to develop/deploy application 66

Adoption rate of new business applications 53

IT staff budget for strategic/innovative projects 42

Employee productivity 8

Revenue from new products 5

0 20 40 60 80 100 120 140

(%)

Source: IDC, 2016

The research conducted by IDC found a high correlation between levels of public PaaS adoption and
the following business performance key performance indicators (KPIs):

 Increased agility: Optimized organizations reported 36–200% faster time to provision IT

services. Increased agility contributed to quicker time to market and increased revenue.
 Innovation: Organizations heavily adopting public PaaS have created efficient IT and
application development operations, enabling them to move resources from keeping the lights
on to supporting the business and to double the budget available for new strategic projects.
Increased innovation drove increased revenue from new customers.
 Enhanced customer experience: Because of the increasing consumerism of all IT, enhancing
the customer experience becomes the most important business outcome. Optimized
organizations annually deploy 20–100% more business applications with up to a nearly three
times faster adoption rate. In addition, they are enabling one and a half times as many
business applications to mobile users.
 Improved business performance: Each optimized organization reported positive increases in
business performance. Employee productivity was enhanced by as much as 34%, which led to
reduced costs of operations. In addition, these organizations were able to leverage faster time
to market; growth in new businesses and customers; and enhanced customer experience to
add 1–10% additional revenue each year.

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Financial Benefits of Public PaaS Optimization
IDC calculates that over a five-year period, the organizations interviewed for this study will recognize average
annual benefits of $34.8 million ($4,228 per employee). The benefits include additional revenue recognition
of $20.1 million ($2,180 per employee) and reduced costs of $14.7 million ($2,048 per employee)
(see Figure 3).

These financial benefits stem directly from the adoption of public PaaS technology, which enables
organizations to improve business agility, increase innovation, better serve customers, and achieve
better business outcomes.

FIGURE 3

Average Annual Benefits of Optimized Public PaaS ($ per Employee)

5,000

4,000 2,048
($)

3,000

2,000 2,180
1,000

0
Reduced costs
Additional revenue
Source: IDC, 2016

CONCLUSION

The positive experiences customers have had with consumer applications are driving demand for new
business applications with similar intuitiveness and functionality. Public PaaS is increasingly used for
rapid development of applications to address this need. IDC research has shown that organizations
with advanced levels of public PaaS adoption exhibit stronger business results and experience
significant improvements in their business outcomes compared with less advanced organizations.

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About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory
services, and events for the information technology, telecommunications and consumer technology
markets. IDC helps IT professionals, business executives, and the investment community make fact-
based decisions on technology purchases and business strategy. More than 1,100 IDC analysts
provide global, regional, and local expertise on technology and industry opportunities and trends in
over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients
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