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Market Guide for Application Platforms

Published: 23 November 2016 ID: G00296227
Analyst(s): Anne Thomas, Aashish Gupta

Summary
The application platform market is morphing in response to digital business requirements. As
Java EE and other three-tier frameworks, such as ASP.NET, fade in relevance, application leaders
must build a strategy to shift to alternative platforms that support cloud-native applications.

Overview
Key Findings
Commercial Java Platform, Enterprise Edition (Java EE) platforms' revenue declined in 2015,
indicating a clear shift in the application platform market. Digital business initiatives require
new features and capabilities in application platforms, and Java EE has failed to keep pace.
The market is becoming more diverse as vendors and open-source communities produce
innovative and specialized platforms to support modern application requirements.
Application platform as a service (aPaaS) revenue is currently less than half of application
platform software revenue, but aPaaS is growing at an annual rate of 18.5%, and aPaaS sales
will supersede platform software sales by 2023.

Recommendations
Application leaders responsible for modernizing application infrastructure should:

Develop a strategy to deal with the obsolescence of Java EE. Retain Java EE servers for
existing legacy applications, but use lighter-weight Java frameworks for digital business
application development projects or evaluate other language platforms.
Adopt aPaaS (public or private) to help increase agility and to obtain the capabilities required
for digital business. Evaluate nontraditional and specialized tooling to use with aPaaS, such as
high-productivity platforms, dynamic languages, event processing and in-memory computing.
Design all new applications to be cloud-native, irrespective of whether or not you plan to deploy
them in the cloud.
If business drivers warrant the investment, rearchitect existing applications to be cloud-native
and move them to aPaaS.

Give preference to vendors that articulate a platform strategy that supports modern
application requirements, such as public, private and hybrid cloud deployment, in-memory
computing, multichannel clients, microservices, event processing, continuous delivery, Internet
of Things (IoT) support and API management.

Strategic Planning Assumptions

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Strategic Planning Assumptions

By 2019, fewer than 35% of all new business applications will be deployed in Java EE application
servers.
By 2020, at least 50% of all new business applications will be created with high-productivity
toolsets.

By 2021, new aPaaS deployments will exceed new on-premises deployments.

By 2023, aPaaS revenue will exceed that of application platform software.

Market Definition
Application platforms provide runtime environments for application logic. They manage the life
cycle of an application or application component, and ensure the availability, reliability, scalability,
security and monitoring of application logic. They typically support distributed application
deployments across multiple nodes. Some also support cloud-style operations (elasticity,
multitenancy and self-service).
Gartner tracks three types of application platforms:

Transaction processing (TP) monitors are software products that host preweb, online-
transaction-processing (OLTP)-style applications.

Application platform software is packaged and delivered as software products that

organizations can deploy on-premises or on provider-managed infrastructure as a service
(IaaS).
Application platform as a service (aPaaS) is a provider-managed platform capability (either
public or private) that is operated as a cloud service.

Application platforms typically come with associated development, monitoring, management

and administration tools. They may include a variety of features, such as load balancers,
autoscaling orchestrators, automated deployment tools, in-memory data grids (IMDGs), event
processing and external adapters.

Application platforms often have an affinity with a particular application programming language
and framework, which can limit the types of applications they can host. For example, Java EE
application servers can only host applications built with the Java language and the Java EE
framework, and high-productivity aPaaS platforms can only host applications built with their
associated high-productivity development tool. Other platforms support polyglot languages and
frameworks; for example, most high-control aPaaSs support a broad array of languages and
frameworks, and can also host other application platforms, such as deploying a Ruby on Rails
platform as a buildpack in Heroku.

Numerous vendors include platform capabilities in packaged applications or other application

infrastructure products, such as portal products, mobile application development platforms,
enterprise service buses (ESBs) and business process management (BPM) suites. This research
examines the stand-alone application platform market.

Market Direction

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The application platform market is large (worth approximately $7.8 billion in revenue in 2015)
and growing (it will be worth approximately $11 billion by 2020). This market growth stems
primarily from the aPaaS segment. Currently, aPaaS accounts for less than 19% of the market,
but it is growing rapidly (with an 18.5% compound annual growth rate [CAGR]). The platform
software segment is currently 2.5 times (58%) larger than the aPaaS segment but this market
segment is growing slowly (with 3% CAGR). The TP monitor segment currently makes up 23% of
the market, but is declining (-0.4% CAGR). The aPaaS segment is likely to bypass the platform
software segment by 2023. Figure 1 compares the relative size and estimated growth of the
three market segments through 2020. 1
Figure 1. Application Platform Market Segments

TP = transaction processing; CAGR = compound annual growth rate; aPaaS = application

platform as a service
Source: Gartner (November 2016)

Application Platform Software Segment

The application platform software segment includes application servers, lightweight web-scale
servers, embeddable servers, high-productivity platforms, specialized platforms, PaaS
frameworks and cloud-enabled application platforms (CEAPs).
2015 was a pivotal year in the application platform software segment. Overall, the market grew
at a modest 3%, but megavendors are being hit hard as organizations shift from traditional
application servers to cloud, open-source and specialized alternatives.

Currently, the lion's share of application platform software revenue comes from license sales of
Java EE application servers. From a revenue perspective, the application platform software
market is dominated by just two vendors: Oracle and IBM. Their combined revenues account for
more than three-quarters of the market.

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Revenue market share doesn't accurately reflect platform usage though. Microsoft is a major
player in the application platform software market, but because its application server technology
is embedded in the Windows Server operating system and doesn't generate stand-alone revenue,
it's difficult to make a direct market share comparison between Microsoft and other vendors.
However, the Microsoft platform installed base is comparable to — and possibly larger than — the
combined installed base of Oracle and IBM.
Open-source software also plays a significant role in this market. Open-source application server
products generate only a fraction of their closed-source counterparts' revenue, but their installed
base is massive — most likely larger than IBM, Oracle and Microsoft combined. The leading
open-source platform provider, Red Hat, is the third largest player by revenue, with 4.4% of the
platform software market in 2015.
Figure 2 illustrates the significant changes happening in this market. For the first time, Oracle and
IBM posted a decline in application platform software revenue. Oracle's and IBM's platform
software revenues declined in 2015 by 4.5% and 9.5% respectively. Meanwhile, vendors that
provide open-source and private PaaS technologies, including Red Hat, Amazon and Pivotal,
showed sharp growth in 2015 (33.3%, 50.6% and 22.7% respectively). 1
Figure 2. The Application Platform Software Market Is in Transition

Source: Gartner (November 2016)

Application Platform as a Service Segment

The aPaaS market segment is young, vibrant, competitive and rapidly growing. Salesforce
dominates this market, with over 57% market share in 2015 based on revenue. All other leading
vendors, such as Google, Microsoft, SAP and Mendix have single-digit market shares, as
illustrated in Figure 3.
Figure 3. aPaaS Vendor Market Share in 2015

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Source: Gartner (November 2016)

The aPaaS market segment includes two types of offerings:

High-productivity aPaaS (hpaPaaS) supports a no-code or low-code graphical, model-driven
development model that enables professional and nonprofessional developers to rapidly build
and deploy cloud-native applications. The platform completely hides the infrastructure below
the application runtime. Organizations use these platforms for building employee-facing
business and productivity applications although, due to pricing constraints, these platforms are
typically less appropriate for customer-facing applications (see "Reduce Costs of Custom
Applications by Leveraging Public PaaS Pricing Models" ).

High-control aPaaS (hcaPaaS) supports multiple third-generation programming languages.

Developers can use a variety of frameworks to build applications, but it is their responsibility to
ensure that the applications are cloud-native. DevOps personnel have significant control over
how application components are deployed and how resources are allocated to those
components. These platforms are suitable for professional developers building customer-
facing, front-office, back-office, and advanced, cloud-native software solutions.

A related, cloud-hosted platform service type is function PaaS (fPaaS), which includes Amazon
Web Services (AWS) Lambda, Google Cloud Functions, IBM Bluemix OpenWhisk and Microsoft
Azure Functions. Iron.io provides an open-source software variant of fPaaS called IronWorker. A
relative newcomer to the PaaS ecosystem, fPaaS is a serverless execution platform for event-
triggered functions (such as microservices). These platforms enable you to run code without
provisioning or managing any underlying system or application infrastructure, and they
automatically scale to support increasing or decreasing loads. These platforms only run back-
end functions, and are dependent on other platform services to support a full application and,
therefore, Gartner does not categorize them as complete application platforms. These platforms
are appropriate for sophisticated developers and architects building web-scale, event-driven,
microservices-based applications.

Transaction Processing Monitor Segment

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The industry's original and now legacy application platform, TP monitors are available for both
mainframe and distributed server platforms. A TP monitor implements most of the core features
of an application platform, but on the basis of "pre-web" programming models and languages
such as COBOL, PL/1 and C/C++. Many TP monitors now also support Java and other modern
programming languages.
The TP monitor market segment is still large (approximately $1.46 billion in 2015), but shrinking
in terms of both revenue and installed base. User organizations rarely start new projects on TP
monitors, although they keep running established, large and business-critical workloads on these
platforms. However, given the high cost of operation, the diminishing skill pool and the very slow
pace of adoption of new technologies, a growing number of organizations — especially at the low
end of the market — are migrating these workloads to application servers or cloud platforms, or
replacing them with packaged or SaaS applications.

Market Analysis
Java EE Still Dominates — But Not for Long
Java-EE-based application platforms (such as IBM WebSphere Application Server and Oracle
WebLogic Server) are mature products that have traditionally been used for enterprise-class
projects. Over the past decade though, Java EE has gained a reputation for heavyweight bloat
that is slow to add support for emerging application architectures. In 2009, the Java community
responded to these complaints by defining a more lightweight version of Java EE called the Web
Profile, which removes a number of back-end application server capabilities that typically aren't
used in web applications. However, the Web Profile still contains features that typically aren't
required in modern applications and, more significantly, it's missing a host of cloud-native
features that Java developers need.

Java remains the industry's most popular programming language. 2 But, at this point, Java
developers eschew Java EE and use a wide variety of lightweight frameworks instead. Popular
Java frameworks and platforms for building cloud-native applications include Apache Tomcat,
Dropwizard, Spring Cloud and Play Framework.

Java EE is a framework for building three-tier client/server applications, but the three-tier model
is obsolete and no longer meets the needs of modern applications. All new applications should
be designed as cloud-native: They should be built using the mesh app and service architecture
(MASA), and be designed with autoscaling and self-healing capabilities. They should also be
deployed in platforms that support these cloud-native capabilities (see "Retire the Three-Tier
Application Architecture to Move Toward Digital Business" ).

Java EE has not kept pace with modern architectural trends. Oracle is leading an effort to
produce a new version of Java EE (version 8), which is slated to add a host of long-overdue
features; however, Oracle announced at Oracle OpenWorld 2016 that Java EE 8 has been delayed
until the end of 2017. 3 By the time Java EE catches up with basic features required for today's
applications, it will be at least two or three years behind the times again.

Bottom line: Java EE is not an appropriate framework for building cloud-native applications. Even
Oracle and IBM recognize this fact. Both vendors have shifted their strategic application platform
investments to PaaS and specialized platform technologies.

Specialized Platforms Are Gaining Ground

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Specialized platform technologies provide interesting alternatives to general-purpose application

platforms. A variety of specialized platforms (offered as self-managed platform software or
provider-managed aPaaS) are beginning to encroach on mainstream application servers. For
example:

High productivity: A number of vendors provide platforms with metadata-driven development

tooling. Examples include Mendix, OutSystems, and Salesforce.

Alternative languages: Application platforms based on alternative languages and

programming models, such as .NET, Node.js, PHP, Python, Ruby on Rails and Scala, often
compete with mainstream application servers for innovative digital business applications.
Examples include Akka, Meteor, Phusion Passenger, Progress Modulus, Slim and Zend Server.
Most of these platforms are available as open-source, and, in some cases, as supported and
curated aPaaS platforms.

Microservices infrastructure: Teams that are building microservices need microcontainers to

embed in their independently deployable components. Open-source-embeddable platforms
include Apache Tomcat, Caucho Resin, Eclipse Jetty and JBoss Undertow. Other vendors
provide microservices runtime infrastructure and container management systems. Examples
include Cloudsoft, Eventuate and Trifork.
High-performance platforms: These highly resilient platforms support high-volume, data-
intensive applications. Examples include GigaSpaces eXtreme Application Platform (XAP),
GridGain In-Memory Data Fabric and Lightbend Fast Data Platform.

Vendors Are Shifting Their Strategic Investments to aPaaS

Most application platform vendors recognize that the traditional application server market is
dying, and so they have shifted their strategic investments to aPaaS technologies, including
aPaaS cloud services, PaaS frameworks and CEAPs. This is where the most significant
innovation is happening. Indeed, PaaS technologies offer modern features and capabilities not
found in traditional platforms, including self-service provisioning, cloud-native frameworks,
autoscaling, efficient resource management, service health monitoring and auto-recovery. aPaaS
solutions typically include support for mobile, event processing, IoT and data-intensive
processing. Many players also support machine learning and artificial intelligence capabilities.
All the megavendors have public and private aPaaS technology offerings, including IBM Bluemix,
Microsoft Azure, Oracle Cloud and SAP Hana Cloud Platform.

Public aPaaS offerings provide the most turnkey platform solutions, but many organizations still
feel uneasy about putting their business-critical applications and data on shared infrastructure.
Organizations looking to construct a private aPaaS have three options:
1. PaaS frameworks are open-source software distributions that provide high-control
foundational infrastructure to enable cloud qualities such as multitenancy, elastic
scalability, self-service provisioning and high density. Examples include Apache Stratos,
Cloud Foundry and Red Hat OpenShift Origin.
2. CEAPs provide a commercial, private PaaS software solution with curated platform
middleware, and they typically supply development tools or opinionated frameworks that
guide developers via predefined conventions in order to build cloud-friendly applications
that optimize resource usage and support modern architectural models. CEAPs are

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available in both high-control (such as Apprenda, Pivotal Cloud Foundry and Red Hat
OpenShift Container Platform) and high-productivity (such as Mendix, OutSystems and
Progress Rollbase) flavors.

3. Dedicated aPaaS provides a public aPaaS experience on dedicated, cloud-hosted services.

Vendors include IBM, Red Hat and Salesforce (Heroku).

Representative Vendors
The vendors listed in this Market Guide do not imply an exhaustive list. This section is intended to
provide more understanding of the market and its offerings.

See Table 1.
Table 1.   Representative Vendors
Type of Market Offerings

Mainframe-Based Transaction Processing

IBM CICS Transaction Server
(TP) Monitors
IBM z/Transaction Processing Facility
(TPF)

Distributed TP Monitors
IBM TXSeries for Multiplatforms
NEC TPBASE

Oracle Tuxedo

Closed-Source Java EE Full-Platform-

Fujitsu Software Interstage Application
Compatible Application Servers
Server
IBM WebSphere Application Server

Oracle WebLogic Server

Open-Source Java EE Full-Platform-

Apache Geronimo
Compatible Application Servers
GlassFish Server Open Source Edition
(sponsored by Oracle)

Red Hat JBoss Enterprise Application

Platform

Closed-Source Java EE Web-Profile-

Caucho Resin Pro
Compatible Application Servers
IBM WebSphere Application Server Liberty
Core

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Type of Market Offerings

Open-Source Java EE Web-Profile-Compatible

Apache TomEE
Application Servers
Caucho Resin

GlassFish Server Web Profile (sponsored

by Oracle)

Open-Source Embeddable Lightweight Java

Apache Tomcat
Application Servers
Eclipse Jetty

JBoss Undertow (sponsored by Red Hat)

High-Productivity Application Servers

Magic xpa Application Platform

NTT Data Intra-mart WebPlatform

Progress OpenEdge

Other Language Application Servers

Meteor.js (JavaScript)

Microsoft .NET platform

Phusion Passenger (JavaScript, Python,
Ruby on Rails)

Zend Server (PHP)

Specialized Platforms
Apache Spark (data analytics platform)
GigaSpaces eXtreme Application Platform
(in-memory platform)

Lightbend Reactive Platform

(microservices platform)

PaaS Frameworks
Apache Stratos

Cloud Foundry

Red Hat OpenShift Origin

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Type of Market Offerings

High-Control Cloud-Enabled Application

Apprenda
Platform (CEAP) Software
Pivotal Cloud Foundry

Red Hat OpenShift Container Platform

WSO2 Application Server

High Productivity CEAP Software

Gnúbila G

Mendix platform

OutSystems Platform
Progress Rollbase

High-Control, Provider-Managed Private PaaS

IBM Bluemix Dedicated

Oracle Application Container Cloud

Red Hat OpenShift Dedicated

Salesforce Heroku Private Spaces

High-Control aPaaS
Google App Engine

Microsoft Azure App Service

Salesforce Heroku
SAP Hana Cloud Platform

High-Productivity aPaaS
Mendix

OutSystems
Salesforce Force.com

ServiceNow

Function PaaS (fPaaS)

Amazon Web Services Lambda

Google Cloud Functions

IBM Bluemix OpenWhisk

Microsoft Azure Functions

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Type of Market Offerings

Open-Source fPaaS Software

IBM OpenWhisk Project
Iron.io IronWorker

Source: Gartner (November 2016)

Market Recommendations
As they evolve their application platform strategies, application leaders face conflicting
challenges. First and foremost, they must support the established system-of-record application
portfolio at the lowest possible cost and, thus, look for stable, low-risk products that are focused
primarily on reducing total cost of ownership. At the same time, application leaders must also
provide platforms that enable rapid innovation for their digital business initiatives. Modern
applications require new technologies and architectures, such as cloud, mobile, in-memory
computing, web-scale, microservices, hybrid IT and APIs. Therefore, trying to standardize on a
single application platform becomes increasingly difficult. Traditional platforms don't support
cloud-native applications, and legacy applications won't run on cloud-native platforms.
Consequently, application leaders must devise an application platform strategy that combines
multiple products and is optimized by use case, taking into account the following
recommendations:

Develop a strategy to deal with the obsolescence of Java EE and other three-tier application
frameworks. Retain Java EE servers for legacy and system of record applications, but look
beyond Java EE for digital business application development projects.

Treat your Java EE applications as you would any other legacy application, and evaluate them
using a fitness and value review process to determine your best course of action (see "How to
Assess Your Current Application Portfolio Using Fitness and Value Review Processes" ).

Resist the temptation to simply lift and shift Java EE applications from closed-source to open-
source application servers for modest license savings. If you are contemplating porting an
application, consider rearchitecting it to be cloud-native and moving it to aPaaS — presuming
that business drivers warrant the investment.

Adopt aPaaS (public or private) to help increase agility and to obtain the capabilities required
for digital business.

Design all new applications to be cloud-native, regardless of whether or not you plan to deploy
them in the cloud: Shift from three-tier to MASA and adopt miniservices or microservices to
improve agility and scalability.

Evaluate nontraditional and specialized tooling to use with aPaaS: High-productivity platforms
(both software and hpaPaaS) provide metadata-driven tools for rapid development of cloud-
native applications, and they can enable citizen developers to build their own applications.
Dynamic languages, such as JavaScript and Ruby, can also supply productivity advantages.
High-performance platforms leverage in-memory computing to support data-intensive
applications.

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Give preference to vendors that articulate a platform strategy that supports modern
application requirements, such as public, private and hybrid cloud deployment; in-memory
computing; multichannel clients; microservices; event processing; continuous delivery and API
management.

Acronym Key and Glossary Terms

aPaaS application platform as a service

CEAP cloud-enabled application platform

fPaaS function platform as a service

Java EE Java Platform, Enterprise Edition

MASA mesh app and service architecture

PaaS platform as a service

Evidence
1
"Forecast: Enterprise Software Markets, Worldwide, 2013-2020, 3Q16 Update"
2 "Java EE 8 Delayed Until End of 2017, Oracle Announces at JavaOne"
(https://www.infoq.com/news/2016/09/java-ee-delayed-2017)
3
The Tiobe Programming Community index measures the popularity of programming languages
— see "TIOBE Index for November 2016." (http://www.tiobe.com/tiobe-index/)

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