Opportunities and Challenges Facing tPaaS Providers
By Betsy Burton
Aragon Research recently rolled out the first Aragon Research Globe for the Transformation Platform as a Service (tPaaS) market (See on-demand webinar). One of the questions I was asked during the rollout was, “what are the biggest opportunities and challenges tPaaS providers are facing?”.
TPaaS is a new market that Aragon Research has identified (Top Questions and Answers About tPaaS Market). It is an evolution of the traditional iPaaS market, with a specific focus on enabling Business Transformation (Transformation Platform as a Service).
What Makes tPaaS Different from the iPaaS Market
The tPaaS market consists of the set of providers of cloud services that specifically enable customers to reimagine and transform their business by providing business modeling and process modeling capabilities, critical digital business services (business architecture and design services, embedded AI, advanced analytics, automation), and integration to new and emerging technologies (IoT, robotics, connectors, etc.).
tPaaS providers may provide public, private, and hybrid cloud services. In addition, we would expect leading tPaaS providers would support both business strategy and model architecture consulting services, in addition to any solution design and implementation services.
Unlike iPaaS, which is rooted in a traditional IT-centric integration perspective, tPaaS is specifically focused on developing a new, innovative business first and foremost approach (business strategy, models, processes), and on enabling customers to experiment with these new business models while enabling integration with emerging business-driven technology and existing technology infrastructure.
The biggest opportunity for providers of tPaaS versus iPaaS is market expansion. The iPaaS market is primarily a technology-driven market with the primary buyers being IT leaders or technology leaders within business units. It is a bottom-up and inside-out driven market.
Clearly iPaaS is a significant market that has existed for over 10 years. But clients are looking for more today. They are not just looking to integrate what they have or just integrate what they have with new technologies and services. Today, competition, market demands, and economic changes are driving organizations to seek to transform their business strategy, models, and operations.
The opportunity of tPaaS is to deliver technology services and engagement services to the business overall. This means a higher level of buyers, a higher impact on the business, and more significant organizational engagement, which means more revenues.
The single biggest challenge providers are facing with tPaaS is changing their mindset and approach. The tPaaS market requires that providers think and approach the market outside-in and strategically. It means not selling a tactical service or product to the market but rather selling a strategy-driven technology-enabled vision.
This is a challenge for many traditional iPaaS and middleware providers that are used to selling the transactional technical sell. For these providers, their engineering, marketing, and sales are focused on that more technology-driven sale.
The good news is that many of these providers also have applications offerings (e..g. SnapLogic, Salesforce/Mulesoft, Oracle) that can be used to help change their more traditional middleware integration approach. In addition, many providers have done significant work on business models and business architecture (e.g. Microsoft, IBM, Workato) that can help them evolve their more traditional middleware approach. For example, Microsoft, IBM, Oracle, and Salesforce all have business architecture services, which are not currently integrated with their iPaaS offerings.
The providers that face the more significant challenge are those that are entrenched in the more technology-driven market approach (Informatics, Boomi and TIBCO).
Business transformation requires an equal investment in business and technology/services. The Transformation Platform as a Service (tPaaS) is a new market that will require a different approach from the traditional iPaaS market. Some providers of traditional iPaaS services may not make this evolution–either by a lack of ability or a lack of focus.
We do believe this market will evolve quickly due to the market demand, and the fact that many of the providers have some business strategy, model, and architecture offerings they can leverage. The time is now for providers to decide if this market is an opportunity for them, and jump on the business, sales, engineering, and cultural changes needed to support this market.