We hear a lot of about Software as a Service and Infrastructure as a Service, and by now these concepts are fairly understood. What we still don't quite get is the Platform as a Service piece. But that is about to change.
The platform provides tools — APIs— for developers to build stuff on top of these other pieces. Salesforce brought the concept into vogue for SaaS vendors when it launched Force.com in 2007. Instead of simply offering its own services, Salesforce was providing a tool set for developers to build applications on top of Salesforce. Developers could fill in missing pieces, customize Salesforce for their needs or even start entirely new businesses, taking advantage of the pieces already built into the Salesforce platform.
It proved tremendously successful and many companies were actually built on the platform including Apttus, Veeva, and FinancialForce, to name but a few. Many SaaS companies have followed that model since, although most lack the power of the Salesforce brand, which is on its way to $10 billion in sales.
As we head into 2017, what is going to separate the biggest cloud vendors — AWS, Google, Microsoft, IBM, and others — may not be the power of their infrastructure services, but their ability to provide tools to build applications to take advantage of that infrastructure.
APIs as difference maker
That means having APIs — tools for developers to build programs very quickly by providing the building blocks for them. For example, instead of building artificial intelligence from scratch, something that would be highly unlikely for an average programming shop, you give the programmers access to a set of tools that lets them insert AI functionality with a couple of lines of code. Then, suddenly everyone can build an application with some AI in it. It completely changes the dynamic.
But AI is just one small example of this, and over time these platforms have recognized they must provide various sets of these APIs to lure more customers to their services. Just in September, Google bought Apigee to help companies manage their APIs. As Diane Green, executive vice president of Google Cloud Enterprise wrote in the company blog at the time of the acquisition: "The addition of Apigee’s API solutions to Google cloud will accelerate our customers’ move to supporting their businesses with high quality digital interactions."
As with everything else in this business, you can expect the competition to react, as they look for ways to help customers capitalize on every aspect of the transition to the cloud including being able to build applications quickly, prototype and experiment and use the agility that the cloud brings to their best advantage.
Expect to see more of this in 2017 as platform services become an increasingly important component of every cloud company's strategy. Simply offering software and infrastructure could become table stakes, and the real difference maker could be the APIs these companies build.
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