Oracle makes move to gain on PaaS market leaders Microsoft and

Gartner predicts PaaS market will reach close to $3 billlion in revenues by 2016

To expand its position in the $1.2 billion platform-as-a-service (PaaS) market and to gain on market leaders Microsoft (Nasdaq: MSFT) and, Oracle recently took a stake in Engine Yard.

The Engine Yard platform, which supports web development languages Ruby, PHP and Node.js, automates the configuration, deployment and maintenance of cloud environments so app developers can build, deploy and manage cloud applications. As a result of the investment, Oracle and Engine Yard will connect their respective PaaS offerings to enable more "rapid development of applications in a secure, reliable and scalable environment," according to Oracle's press release.

Gartner expects the PaaS market to hit $1.2 billion in revenue this year and $2.9 billion by 2016. Overall, the research firm expects cloud services revenues to total $109 billion this year, reaching $207 billion in 2016.

Compared to other cloud sectors, PaaS is the "least evolved," said Fabrizio Biscotti, research director at Gartner.

"For this reason, PaaS is where the battle between vendors and products is set to intensify the most. It comes as no surprise that the PaaS competitive landscape is still in flux, with traditional application infrastructure vendors facing competition from new large players moving into the market, and myriad specialized PaaS pure players cutting into their slice of profits," Biscotti observed.

The PaaS market breaks down into the cloud application platform services segment, which is expected to make up 34 percent of total PaaS spending this year; the cloud application life cycle management services, making up 12 percent; the cloud business process management platform services, making up 11.6 percent; and the cloud integration services, making up 11.4 percent.

PaaS plays a "central role in establishing the standards, architectures and best practices in enterprise software markets," noted Yefim Natis, distinguished analyst at Gartner. "The vendors expect their leadership in the PaaS market to translate to large and effective ecosystems of partners, developers and solutions. PaaS technologies are embedded in many other types of cloud services--all major opportunity channels. The direct revenue in the PaaS market grossly underestimates the importance of this part of the cloud architecture," Natis added.

The PaaS market presents more opportunities for smaller vendors than the more mature cloud services market. These smaller vendors should focus on customizing PaaS technologies for the enterprise.

For more:
- check out Gartner's data
- see Oracle's release

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