As a partner, you know offering cloud solutions to your customers is a must. But do you truly understand the difference between the three primary as-a-service models? More importantly, do you know which one presents the biggest opportunity for partners?
Here’s a look at how software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS) stack up against one another—and how delivering one, in particular, can help you satisfy your customers and maximize your profitability for years to come.
SaaS: Opportunity eludes
SaaS is like renting software and paying a subscription fee rather than owning it outright.
Instead of buying a licensed copy of an email or enterprise resource planning application, businesses access their software by logging in to a private portal supplied by solution providers.
Companies primarily use SaaS to save on upfront and long-term costs. It prevents them from paying exorbitant prices for per-seat licenses. And since solution providers are responsible for managing the software, businesses can keep their ongoing IT costs to a minimum.
While SaaS remains the largest category of cloud computing, its projected growth lags behind both PaaS and IaaS.
And as more SaaS and PaaS sales go through indirect channels, the market is becoming even more saturated, leaving little opportunity for partners to grab a piece of the pie.
PaaS: Opportunity exists
PaaS is a subscription-based model that enables organizations to access hardware and software tools in a virtualized environment. It’s most commonly used by companies that develop and manage apps.
Solution providers host these tools in their own infrastructure, which allows businesses to keep their own server space free for other IT tasks.
One key benefit of PaaS is flexibility. When companies need hardware and software, it’s available. And when they don’t, they can rest assured that:
- They aren’t actively paying for the tools—since they pay only for what they consume
- The tools aren’t taking up valuable bandwidth in their on-premises infrastructure
Today’s PaaS market is growing exponentially. By 2022, Gartner forecasts PaaS revenue to hit $31.8 billion, up from $15.6 billion in 2018.
It’s an impressive number. But it pales in comparison to the projected revenue of SaaS ($143.7 billion). And at 21.8%, it falls short of IaaS (27.5%) in terms of growth.
IaaS: Opportunity abounds
IaaS allows companies to outsource their entire IT infrastructure. Partners host and manage customers’ servers, storage and networking. Those new to IaaS can enroll in programs to leverage additional vendor support to provide technical expertise.
On top of relieving organizations from the burden of hosting and managing their own on-premises infrastructure, IaaS gives businesses increased reliability and security.
Since solution providers enforce strict security measures, businesses don’t have to worry about data breaches. Providers are also well-equipped to ensure uninterrupted reliability, allowing companies to keep their infrastructure up and running even if a server goes down.
By far, IaaS presents the biggest opportunity for partners. For one, IaaS spending is expected to be the fastest growing category of cloud spending between 2019 and 2023, with a five-year compound annual growth rate of 32%.
Additionally, IaaS revenue is projected to reach $76.6 billion by 2022, up from $30.5 billion in 2018.
Still, it’s likely that only a small fraction of global IaaS revenue currently involves an indirect partner.
What does that mean for you? It means the IaaS market is wide open for partners to charge through. And if your company can seize this opportunity and provide its customers with the IaaS solutions they want, you’ll have a great chance to excel with your IaaS practice for a very long time.
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