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BaaS: It's a crowded (and young) market

Nancy Gohring | Jan. 31, 2013
Back-end as a service offers standard features to drop into your apps, so your developers can spend their time on the most strategic pieces.

When Forrester's Michael Facemire set out to write a report on back-end as a service, published in August 2012, he interviewed 13 companies. "Since then I've found out about nearly 40 companies that call themselves BaaS," he says.

BaaS vendors offer services aimed at making it quick, easy and inexpensive for developers to add common functions such as messaging to their mobile apps, freeing them up to focus on the functions that are important to the business. Companies will need to choose their provider carefully, because consolidation is certain, says Facemire.

Already, some merger and acquisition activity is happening. Appcelerator acquired Cocoafish, Apigee bought Usergrid and Flurry scooped up Trestle.

That's likely just the start. "My theory is that the infrastructure players -- Amazon, Rackspace, SunGard -- the folks providing IaaS, will be the major acquirers for BaaS," says Marc Weil, founder and CTO of Cloudmine, a BaaS provider.

Microsoft has already signaled interest in the space by rolling out mobile BaaS tools in Azure, its cloud platform.

Rackspace is indeed at least thinking about this market. Developing products and services geared toward mobile developers will be a focus in the coming year, says John Engates, Rackspace CTO. "We have a whole team of mobile developers that are trying to translate their challenges and problems into a product set," he says. However, he adds, "we don't rule out acquisitions."

Other kinds of companies the experts say might be interested in BaaS: traditional enterprise software and service providers including Oracle, SAP, IBM and Accenture; telecom operators including Verizon and AT&T; and mobile device makers looking for new revenue streams as hardware margins shrink.

But Facemire suspects it's too early for the major enterprise software vendors to be looking seriously at BaaS. "They know it exists, but I don't know that they're looking deeply at it just yet," he says. The mobile middleware products they sell "are still viable and still meet the reality or the perception around security" that large organizations want, he says.

"Only when one or a collection of BaaS companies proves that the market is real and can be scaled will some of the bigger players start to acquire this technology," he says.

Because today's BaaS vendors are for the most part startups with limited track records, large corporations tend to be wary of using their services for mission-critical applications. Jeff Mathers, director of mobility for Johnson & Johnson, says the consumer goods giant doesn't use BaaS for its long-term applications or those that run Salesforce automation, for instance. "We're not going to build that on a startup. We need something more robust," he says.


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