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Managing technology providers to meet business initiatives: A CIO guide

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Harnessing potential, avoiding problems with smaller PaaS providers

Smaller PaaS providers or the usual suspects? Gartner's Yefim Natis discusses the pros of partnering with PaaS startups and how to avoid the cons.

When it comes to navigating new cloud territory, many CIOs tend to stick with what they know. But that might not always make for the most beneficial outcomes. There's a sense of safety -- and practicality -- in entrusting a move to Platform-as-a-Service (PaaS) to the same vendor they've partnered with for Software-as-a-Service (SaaS). A recent TechTarget survey bears this out. Among respondents to the 2013 Tech Target Cloud Pulse Survey...

who indicated that they're using some type of PaaS, the top four providers they chose were Google AppEngine, Microsoft Windows Azure, Salesforce.com's Force.com and Amazon Beanstalk.

Choosing a well-known provider is understandable, said Yefim Natis, vice president and distinguished analyst with Stamford, Conn-based Gartner, Inc. But while these big names have the benefit of history and established reputations on their side, CIOs who overlook smaller PaaS providers could be missing out on better service and greater, faster innovations.

In this SearchCIO.com tip, Natis discusses the relative benefits and reasons companies choose smaller PaaS providers, as well as how to guard assets when working with a startup that may be here today, gone tomorrow (or in a few years).

Take 1: The benefits of smaller PaaS providers

The choice between going with the mainstream, major providers and the smaller innovators is a dilemma with many technologies, even mature ones, Natis pointed out. As a young, developing technology, PaaS solutions are understandably in large part the domain of startups. Only very recently have the major tech vendors -- think IBM, Oracle, SAP -- made their moves into the PaaS space, Natis said. He contends that companies whose sole focus is on PaaS technology might well be better equipped to deliver desired results.

Yefim NatisYefim Natis

"Often what the smaller company is offering is not just a repeat of what the big guys are offering, but a different take on a particular problem," Natis said. "When that offering matches the requirement of a project, for the buyer there's no other place to go."

Smaller PaaS vendors also tend to be more vertically aware, whereas the larger vendors usually take a horizontal tact and essentially support all industries the same way, Natis said. The smaller providers often find their strength at first in one or two industries and then hope to grow horizontally from there. But it's in that initial vertical focus that customers can really find value.

Often what the smaller company is offering is not just a repeat of what the big guys are offering, but a different take on a particular problem.
Yefim Natis

"While they're in those one or two industries, they understand those industries better than the generalists, and that may be an advantage to your organization," he said.

Customer service is another potential benefit of going with a smaller PaaS provider, Natis said, both in terms of the support received and the ability to influence product direction. Because your business really is important to them, smaller vendors often will take more time to listen to complaints and take suggestions on the workings of the solution. Accordingly, product support tends to be more focused and helpful to the customer.

"You will get support that is more expert, because it's usually coming from the developers themselves, whereas, with the big vendors, support is people who do support, not actual software development, Natis said.

Take 2: What to do when a PaaS startup stumbles

While some startup companies do become established businesses, there is always the chance that the money will run out or that their success will lead to an acquisition by a bigger player. CIOs should always keep in mind that a company they partner with could, in one way or another, disappear. They can and should take measures to proactively protect their organizations if there are concerns about the provider's long-term viability, Natis said.

Starting with the contract, first demand the inclusion of penalties for disruptions to business continuity. (If the provider is acquired by another company, that company will assume all of the responsibilities in the contract.)

"Even if they're not acquired, if they go out of business, usually they'll have some assets remaining, so you'll be able to get some compensation," Natis said. "It's not a pretty picture, but it does provide additional protection."

Another contract must-have is a requirement that the customer be informed in a reasonable period of time of an acquisition or closure, in order to prepare for the change. And, in the case of acquisition or closure, it's absolutely crucial, Natis said, to be sure it is clearly stated how and when you, the customer, will be able extract your data. "If we're talking about a cloud service provider, you have to make sure you can extract the data quickly before they turn off the service," Natis said.

Natis also recommends that the code of the software you're using be put in escrow. Depending on the skill level of your organization, this might not be useful, but it's better to have this in a contract than not, he said.

Outside of the contract, the best way to protect your investment in a solution from a smaller PaaS provider is to choose applications that will be used immediately and have an estimated return on investment of two years.

"Once the two years pass and you have complete return on investment, if the vendor disappears or starts deteriorating, the application has already paid for itself, you can go create a new one someplace else and there was less of an impact," Natis said.

For those who have nearly settled on a small vendor, Natis advised taking the extra step of demanding references from current product users and taking the time to talk with them.

"You want to have a good understanding of how committed and loyal these existing customers are, because that assures the continuity of the provider," Natis said. "If you see a sizable community of customers, you know you are not alone if there's a problem -- and that makes any problem easier to handle."

Let us know what you think about the story; email Karen Goulart, Features Writer.

Next Steps

It's time for CIOs to embrace PaaS solutions

CIO's cloud strategy speeds up innovation

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This was first published in May 2013

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Essential Guide

Managing technology providers to meet business initiatives: A CIO guide
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