Features of the development of the Russian PaaS market

2024

The basis of the target audience of PaaS is made up of developers, IT departments, infrastructure divisions of companies. The largest demand in this segment is formed by the most digitalized industries, such as fintech, retail, IT, e-com, development. The volume of the segment is relatively modest, experts express positive estimates of growth.

Experts say that the differences between IaaS and PaaS are now being erased. The use of hybrid and multi-cloud approaches is expanding in these segments. At the same time, so far PaaS in the Russian Federation is inferior to IaaS in development.

PaaS CA: Diversity of segmentation approaches

Since PaaS services mean already configured platforms for different tasks, customers are able to concentrate on developing their own solutions. So they don't need to waste time deploying, configuring and supporting servers, installing the OS, etc.

{{quote 'author = Oleg Fedorov, Head of Cloud Products and Solutions at Linx Cloud. | Demand in the PaaS segment is mainly formed (65-70%) by large enterprises with their own large staff of IT specialists. The development of technologies based on artificial intelligence and access to the computing power of supercomputers are likely to further strengthen the position of big business in this market. }}

The main CA PaaS in Russia is software developers. Such is the consensus on the responses of experts interviewed by TAdviser.

From the point of view of industry specialization, the greatest demand is formed by companies from the fintech sphere, retail, IT (according to estimates, these three segments occupy up to 70% of the market) due to their deep digitalization. PaaS is also in demand from e-com and development, and other segments are actively increasing consumption.

It is more difficult to draw a watershed in terms of the size of enterprises: PaaS services are in demand among both small and medium and large businesses. PaaS solutions enable organizations with diverse business models to manage IT infrastructure, develop applications, and innovate.

Developers, startups, and small businesses looking to bring digital products to market quickly are using PaaS to speed up application development and deployment without the need for additional hiring of DevOps engineers. One of the main interests for this category is cost optimization. Initially, it was the developers who formed the demand in the segment, but now the infrastructure divisions of the companies have a serious impact.

Large companies see PaaS solutions as an effective way to manage processes, optimize operating costs, provide quick hypothesis testing and, if necessary, scalability of applications.

A dissenting opinion was expressed by Alexey Krishtop, director of cloud services at Astra Group. He also believes that the developers are the target audience, but stressed that everything is limited to this segment, and in other areas of development should not be expected yet.

PaaS is, if you may, a chamber story for programmers, the expert said.

He stressed that PaaS developers are really convenient: you do not need to deploy the infrastructure yourself from scratch, install software, manage...

PaaS segment dynamics

Like all cloud services, PaaS shows year-on-year growth. Russian vendors are actively entering the struggle to attract customers, offering competitive PaaS products.

The estimates of experts in terms of market volume for 2023 vary in the range of 10-23 billion rubles, but more often they talk about 20 + billion. The outlook and growth results are also measured differently.

Most often, experts refer to the next study by iKS-Consulting as the most authoritative source of expertise, claiming that the positive development of the segment and the strengthening of the domestic PaaS market is a trend.

Mikhail Barablin, partner and head of cloud solutions at the Digital Economy League, gave a pessimistic assessment. According to him, the segment's volume is only about 10 billion rubles, and growth in 2024 will be relatively modest - in the region of 8-10%.

The specialist described the segment's growth as "moderate" over the past few years. He doubts that the vector will change in 2024, since the lack of standards, the desire of all providers to create unique PaaS solutions that will "bind" customers to them, the general low quality and functional content of platform services - all this does not allow to accelerate demand for this type of services, makes them secondary to infrastructure.

"Demand for PaaS compared to demand for SaaS and IaaS is even decreasing in the share of the market," he said.

In 2022-2023 PaaS market showed intensive growth in the region of 50-55%. We assume that in the future the growth rate will gradually decline, but annual growth will remain at a fairly high level: 30-35%, - commented Oleg Fedorov, head of cloud products and solutions at Linx Cloud. - Growing competition among providers will contribute to both the expansion of the range of cloud services and the development of customized industry solutions.

At the end of 2023, revenue in the segment increased from 13 to 20 billion rubles, and in 2024 it is predicted to grow to 28 billion. This assessment was given by Alexey Krishtop, director of cloud services at Astra Group. According to him, these indicators do not come in absolutely any comparison with the colossal jump in SaaS and, especially, IaaS. Against the background of the total cloud market, the PaaS solutions segment will gradually "wash out" even taking into account revenue growth compared to previous years. This is due to the fact that PaaS solutions are convenient for developers, for all others the benefit is not obvious. However, there is another side of the coin: the demand for PaaS should just increase due to import substitution, because the more complex software products and the process of creating them, the higher the demand for PaaS services. But here a lot depends on the development culture, the expert noted.

Шаблон:Quote 'author=Natalia Efimtseva, Senior System Architect, ICL Services.

In line with trends

Experts mentioned as key factors affecting the segment

• legislator requirements for data security and protection (from January 1, 2025, according to Presidential Decree No. 166 of March 30, 2022, many customers will be obliged to abandon the use of foreign systems),
• High demand for cloud services (data growth, digital business transformation)
• ubiquitous growth of competition,
• sanctions to which Western vendors must obey.

A little less often talked about the growth of the Internet of Things (IoT), the development of DevOps, ML and CDN technologies, the widespread use of analytics solutions. The regulation of the Internet by Roskomnadzor was separately mentioned along with support within the framework of the national program "Digital Economy."

There is a 152-FZ directive related to the storage of personal data in Russia, as well as a restriction by Roskomnadzor on the use of some services. Alexey Krishtop, Director of Cloud Services, Astra Group.

Oleg Fedorov, head of cloud products and solutions at Linx Cloud, announced several trends at once, including the following.

1. The differences between IaaS and PaaS are erased.
2. The use of hybrid and multi-cloud approaches is expanding.
3. The largest operators are redistributing cloud resources to the regions amid growing local demand.
4. Development moves from centralized IT departments to business units, driving the rise in popularity of minimally coded development platforms such as Power Platform, Power Automate, and others.

According to market experts, in the next four years, the PaaS sphere will develop in the direction of fully managed services. Of particular note is the development of applications based on microservice architecture using Kubernetes/containers and serverless computing, as well as the emphasis on Inner Source culture. This implies that companies adopt approaches and practices specific to open source software communities. Oleg Fedorov.

Director of Cloud Services of Astra Group Alexei Krishtop pointed out that the demand for PaaS solutions depends on the size of the target audience of developers. In addition, companies are fighting for strong specialists, and resources for PaaS can be allocated specifically for them, but only in the absence of opportunities to organize their infrastructure.

Experts also mentioned that the general fashion for AI (although it stands out as a separate big trend) and information security may not play for the formation of mass demand. Mature service providers will win, focusing on the development of the functionality and technical characteristics of their products, actively investing in innovations.

The "modest driver" of the market for SMB was called the reduction in personnel costs. Modest, since these savings alone are hardly enough for significant growth in the company's profits.

Retrospective and Perspectives: Stagnation and Growth

The relatively small development of the PaaS segment (compared to IaaS) in Russia can partly be explained by the fact that companies preferred to have more control over the infrastructure and expected to achieve a better ratio between price and performance.

Шаблон:Quote 'author=Oleg Fedorov, Head of Cloud Products and Solutions at Linx Cloud.

A similar opinion was expressed by Polina Abaimova, business development manager of the Softline Multioblaco competence center. According to her, the maturity of companies and their readiness to move to the cloud greatly affect demand, this is a natural process of developing cloud technologies in the country, when segment growth goes from simple IaaS solutions to more complex platform services.

{{quote 'The PaaS services segment will grow in proportion to the growth of the IT maturity of the Russian cloud market, one without the other is impossible. With the complication of services, a willingness to consume such services should be formed. But the trend towards the transition of all cloud services to the commodity section, of course, will affect the development and growth of consumption of PaaS services, "she said. }}

The understanding is already coming to the market that without the expansion of application development and administration commands that could customize and optimize the operation of container orchestration, databases or object storage of type S3, companies receive unutilized equipment resources, business operating costs are growing and production rates are slowing down.

Шаблон:Quote 'author=Alexander Grishin, Selectel Platform Services Manager.

To date, PaaS has every chance of "shooting." This requires a certain technological maturity and a range of services provided. According to some estimates, we can even talk about the expansion of PaaS.

Шаблон:Quote 'author=Natalia Efimtseva, Senior System Architect, ICL Services.

Experts believe that the market in the near future expects the expansion of product lines from service providers. New players will appear, competition will grow. Providers in this case will form more attractive price models. Integration with Russian OS can become in demand, since they are increasingly required to be used on cluster nodes, and not all managed services conveniently and natively support Astra Linux, Red OS, etc.

{{quote 'author = Andrey Nikitin, Product Director, T1 Cloud. | The development trend of the PaaS segment will continue, already now we can observe the scaling of the PaaS portfolio among the main players in the cloud market: tools and development environments, tools for deploying OS, machine learning libraries, databases, etc. }}

According to the expert, the potential of the segment is high due to the fact that companies that have already tried IaaS computing resources are increasing the consumption of platform services.

Шаблон:Quote 'author=Alexander Grishin, Selectel Platform Services Manager.

{{quote 'author = Dmitry Prede, Director of Public Relations of the cloud platform RCloud by 3data. | The rapid development of digital business transformation will further increase demand for PaaS. We also expect more organizations to start using hybrid and multi-cloud models, requiring PaaS to be flexible and unified in management to easily transition between clouds. }}

PaaS model vendors are expected to continue to improve automation, integration and adaptation of new technologies, including AI and machine learning, and begin to focus more on developing serverless technologies.

Шаблон:Quote 'Oleg Fedorov, Head of Cloud Products and Solutions at Linx Cloud.

Which PaaS services are in demand?

Complex platform services are in good demand: databases as a service (DBaaS), container orchestration systems (Managed Kubernetes), analytical platforms, high-load systems for storing big data, data backup services. The concept of infrastructure as code (IaC) also continues to develop. Cloud databases, business analysis tools and AI-based services stand out from cloud data solutions.

Шаблон:Quote 'author=Polina Abaimova, Business Development Manager, Softline MultiCloud Competence Center.

According to the expert, at the moment DBaaS is in the portfolio of all leading cloud and service providers, and the task of sellers is to correctly position the service on the market.

DbaaS is gaining popularity among organizations due to the fact that it facilitates the process of managing and scaling databases without the need to monitor the state of physical equipment and administration.

One of the key areas of development of DbaaS is the increase in the number of cloud database management systems (DMS) offered and their adaptation to the specific needs of customers.

80% of digital services' data placement, performance, and scalability needs are covered by Kubernetes (K8s) database and cluster delivery service models. These two services are characterized by the greatest user savings compared to the content of their own DBA and DevOps competencies. Promising experts call PostgreSQL, MySQL, ClickHouse, Kafka.

Шаблон:Quote 'author=Konstantin Ansimov, Selectel Product Director.

In addition to container orchestration systems, cloud databases, analytical platforms, the most popular may be tools for versioning, developing and deploying applications, high-performance data storage with S3 access, as well as other solutions for working with Big Data.

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