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Salesforce reshapes SaaS, PaaS in Internet of Things and AI

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By Jeffrey M. Kaplan

October 13, 2017 12:18 pm PT

It can be a full time job trying to track Salesforce's latest Cloud offers and messages. However, it's still worth it because the company's statements are often the first fruits of the future direction of the software industry.

This has become especially true with respect to the company's ongoing efforts to penetrate and gain a leading position in the markets for artificial intelligence and the Internet of Things. Salesforce's latest initiatives, in anticipation of its annual Dreamforce conference, could also be a key indicator of the rapidly changing competitive landscape.

Battle for PaaS supremacy

Salesforce has been at the forefront of software promotion as a service and, more broadly, the value of the cloud. As he has gained success with his growing range of SaaS / cloud offerings, he has also borrowed a traditional playbook strategy from the software industry: adding a development layer to his SaaS applications, allowing his customers and partners to build their own software solutions. meet their specific business needs.

Many industry watchers were waiting for this platform to become the next big battleground of the cloud market as it would show clearly where customers and partners were making their biggest bets from the point of view of provider alignment.

The global PaaS market will multiply more than four times, from US $ 1.28 billion in 2013 to $ 6.94 billion in 2018, representing a compound annual growth rate of 32.5%, according to MarketsandMarkets.

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Even greater optimism about the size and growth of the global PaaS market comes from Gartner, which valued the PaaS market at about $ 7.2 billion in revenue in 2016 and expects $ 10.6 billion in 2018 and $ 14.8 billion billion in 2020.

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While this suggests impressive growth, the PaaS market would only be a fraction of the size of the global SaaS market, according to Gartner, which estimates that the SaaS market is currently $ 46.3 billion and will grow to $ 75.7 billion in 2020.

Despite the disparity in size, the battle for PaaS supremacy continued to increase. Indeed, Salesforce has stopped talking about a single platform underpinning all of its SaaS capabilities. Instead, he built and acquired a myriad of platforms for various purposes.

The company's platforms have not only multiplied in number, but also
have had name changes over time.

This evolution of the platform has had a significant impact on Salesforce's efforts to penetrate and conquer a significant portion of the markets for artificial intelligence and the Internet of Things. The company's AI efforts began with the introduction of the WAVE analysis platform three years ago, and expanded a year ago with the launch. of the Einstein AI platform.

The Salesforce IoT platform game is focused on its Thunder offering. The new edition of Salesforce IoT that will be launched this fall is an application based on its SaaS platform (formerly called "AppCloud"). It allows business users, rather than software engineers, to experiment with IoT to turn device data directly into business value.

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Bet on the APIs

The proliferation of platforms, both inside and outside of Salesforce, has created a lot of confusion among software developers and IT / business decision makers who determine which PaaS is best adapted to each use case.

The dividing line between PaaS and Infrastructure as a Service offerings from Amazon Web Services, Microsoft Azure, and other cloud service providers has complicated the process of selecting and implementing PaaS . This confusion has not helped salesforce's PaaS sales efforts.

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So it's not surprising that Salesforce has adopted a strategy to change the competitive landscape by putting more emphasis on the power of its application programming interfaces to improve the positioning of its IoT and AI capabilities.

Rather than continuing to promote the ability of organizations to create their own apps through PaaS offerings, Salesforce has promised to increase speed to value through its APIs. The new value proposition is that APIs can capture data from various devices, products and "things", and convert that data into meaningful orders via its Cloud Service and other SaaS solutions.

The new Salesforce IoT Explorer package highlights the company's API capabilities. The less expensive starter kit includes APIs that translate IoT endpoint data into meaningful triggers in Salesforce Service Cloud and other offerings.

So, instead of spending a lot of money to build IoT solutions built on one of Salesforce's PaaS layers without knowing the ultimate cost or financial performance, companies can now make a bet more. weak on a more focused and less costly initiative. Complicated APIs to test the value of the IoT idea.

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As the functional value of APIs is well-documented and widely understood, Salesforce's bet is that selling the immediate value of its APIs in the IoT and AI usage cases will be easier than the more complex and long-term implementation of benefits via PaaS.

The company also hopes that the relatively low cost of APIs will make selling easier than the strategic investment in PaaS.

If these assumptions are correct, Salesforce could successfully bypass the PaaS impasse which prevented it from here getting a foothold in the IoT and IA market .

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Jeff Kaplan has been a columnist at the ECT News Network since 2009. He focuses on cloud computing, SaaS, IT management, managed services and the Internet. Objects. He is the director general of
THINKstrategies.
Email Jeff.

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