Platform as a Service (PaaS) solutions are changing the way that software is produced, distributed, consumed, and priced. PaaS, also known as cloud platform, offer an execution environment based on software platforms. To be competitive on the market, PaaS providers have to be aware of drivers of successful platforms and design or adjust their business models accordingly. Surprisingly, prior research has made little attempt to investigate consumers’ preferences on PaaS that influence developers’ choice on PaaS solutions. In this study we examine this understudied issue through a conjoint study. First a comprehensive literature analysis on PaaS has been conducted in order to build the study design on a rigorous foundation. The conducted conjoint survey contained ten attributes together with 26 corresponding attribute levels and has been completed by 103 participants. Based on the results, a prioritized list of customers’ preferences for PaaS has been created.
Platform as a service (PaaS) provides an execution environment where external developers deploy and run their components. PaaS solutions facilitate the development, testing, and management of software components as well as the exchange of knowledge between developers.
Currently, PaaS is at the peak of inflated expectations. The market for PaaS is growing fast and will have a potential market volume of more than €6 billion in 2014 . At the moment, the market is largely fragmented. However, market research companies expect that the distribution of market shares will change dramatically in the next few years [1–3]. Providers of PaaS are under pressure to further develop their products, in order to sustain on the market and meet the different customers’ needs.
In our reseach we focused on the design of PaaS by conducting an empirical investigation on their essential features from the perspective of third-party developers. Thus, the research question can be formulated as follows: What are the preferences of third-party developers on PaaS? To find out what determines the choice of a PaaS, an adaptive choice-based conjoint analysis was conducted, which is described in our whitepaper. After presenting the results of this study, SAP`s engineering response is presented.
Five attributes have been identified , that have to be necessarily implemented into PaaS solutions in order to succeed on the market in the long-run.
- Availability of at Least 99%
- Fully Automated Scalability
- Standardized APIs
- High Security Standards and Access Controls
- Backup and Disaster Recovery
Due to their importance, these features have to be guaranteed in all PaaS solutions. Therefore they are considered as mandatory and haven’t been evaluate within the survey. The final list which serves as the foundation for the conjoint survey contains ten attributes with altogether 26 corresponding levels and is presented in the Table below.
|Development Environment||In order to enable external developers to use cloud platform, they can provide a development environment. Development environment can be either online, meaning a completely browser-based development environment is offered online, or offline by providing a SDK.|
|Test Environment||A test environment facilitate debugging, testing and simulation of developed components. A test environment can be either provided or not.|
|Monitoring||Monitoring of usage and load of the processes running on the platform. It can be predefined and just provide a fixed set of views, or customizable and let the user specify dynamic notifications, thresholds, etc.|
|Mobile Access via App||Cloud platforms can provide a mobile user interface to access the whole development, management and monitoring functionality; it can be limited to monitoring only, or not provided at all.|
|Community Features||The PaaS provider offers either a business-related social network for the users and developers of software on the platform, or a knowledge sharing platform, or no community features at all.|
|Market Penetration||The market share of a PaaS provider can be high or low.|
|Pricing||The pricing model can be revenue sharing, where the PaaS users pay a part of the revenue they make with their software to the PaaS provider, or, more commonly, fixed recurring fees (flat rate) or a pay per use model.|
|Marketplace Functionalities||The PaaS provider maintains a marketplace where customers can buy software components. The marketplace can offer the provisioning of the requests software, and in addition to that also offer linkage to other popular marketplaces.|
|Payment Handling by Marketplace||For the marketplace, the PaaS provider could provide the payment infrastructure, or merely usage information.|
|Migration among PaaS Providers||If users decide to migrate their applications to another platform, the PaaS provider can either offer Migration as a Service, or provide import/export tools, or none of these.|
The relative importance for each attribute category is depicted in Figure 2. By far the biggest importance (23.84 %) was attached to the development environment, followed by the test environment (14.15 %) and migration among PaaS providers (12.63 %). Pricing (8.79 %), mobile device access via app (8.77 %) and community features (8.54 %) were a little less important to the participants. Market penetration (6.77 %), marketplace functionalities (6.32 %), payment handling by marketplace (5.38 %), and monitoring (4.81 %) tailed the field.
The importance for each of the features above is an implicit value derived from the absolute range between the highest and the lowest part-worth utility of an attribute. Part-worth utilities for the attribute levels are normalized HB estimates and are depicted the Figure below. The higher the part-worth utility, the stronger the respondents’ preference was for a certain attribute level. Since normalized part-worth utilities add up to zero for every single attribute, negative part-worth utilities indicate less-desired levels.
Based on the outcomes of the literature review, the focus group discussion, the expert interviews, and the ACBCA survey, today’s favored PaaS solutions should include the following features: availability of at least 95%, fully automated scalability, standardized APIs, high security standards and access control, and backup and disaster recovery. These are clearly the must-have features of PaaS solutions.
A development environment that is provided either online (50.28) or preferably as an SDK (68.73) can also be considered as a must, especially since 40% of the participants indicated that a cloud platform not offering a development environment is unacceptable. With a relative importance of 14%, the same is true for the availability of a test environment, which was also indicated to be a must-have feature by 15 participants. With a relative importance of 13%, smooth migration among PaaS providers is of high significance to consumers. Thereby, consumers prefer PaaS solutions to offer the migration itself as a service (36.96), not just provide tools to support the migration process (28.78). In addition to this, 13 participants explicitly stated that not providing migration support is non-compensatory for them.
Although in the literature it is often claimed that PaaS is characterized especially by a pay-per-use model, this cannot be confirmed from a consumer perspective. Although pay-per-use models are somewhat popular (8.51), most of the respondents preferred to pay for their solution on a monthly flat-fee basis (12.60). Revenue sharing was considered least attractive (-21.12). Also, 19.42% of the respondents mentioned revenue sharing as their preferred pricing model within the build your own section of the questionnaire. These results seem somehow contradictory. One could assume that there are other factors influencing the preferred pricing model, like for instance the type and focus of the PaaS platform itself.
Contrary to the assessments of the experts interviewed, mobile device access obtained a relative importance of more than 9%. Although all the experts agreed that mobile device access to a cloud platform would be less significant, consumers clearly prefer to have full control (27.61) via a mobile device instead of having only monitoring features available on mobile devices (8.80). With relative importance of 9%, consumers do have a distinct interest in community features. However, they clearly focus on knowledge-sharing features (32.97) and are less interested in socially enhanced features (2.60).
The research leading to these results has partially received funding from the 4CaaSt project (http://www.4caast.eu/) from the European Union’s Seventh Framework Programme (FP7/2007-2013) under grant agreement no. 258862.
 IDC, “Market Analysis – Worldwide Public Application Development and Deployment as a Service: 2010 – 2014 Forecast,” Framingham, MA, USA, 2010.
 Forrester, “The Forrester WaveTM: Platform- As-A-Service For App Dev And Delivery Professionals , Q2 2011,” Cambridge, USA, 2011.
 Gartner, “PaaS Road Map: A Continent Emerging,” Stamford, Connecticut, USA, 2011.