Platform as a service (PaaS) may be a bit slow on the uptake for most enterprises, but moving towards it may be...
inevitable. The benefits are too tangible and the barriers are dropping, according to some industry insiders.
PaaS has reaped big benefits for Avebe, a manufacturer specializing in potato starch products based in Veendam, Netherlands. The company had an established SAP ERP system that connected several factories across Europe, as well as sales offices in the U.S. and Asia, however, it was not getting the most out of it, according to Jilt Bakkes, Avebe's director of information and communications technology. To address this, Avebe implemented a PaaS -based app development platform from Boston-based Mendix Inc., which could improve Avebe's SAP experience and derive more value from it.
"SAP is our primary ERP system, and we hired Mendix to develop applications that we weren't able to do with SAP," Bakkes said. "We had hired some programmers to try to do this within SAP, but that took lots of time and was very costly. With Mendix, the time and cost of developing apps was lowered dramatically."
Contracts created on app development platform
Working with implementation partner Rond Consulting, the first application Avebe developed on the Mendix platform made it easier for sales people to construct contracts. The application got information from Avebe's SAP ERP and used it in the sales contracting process in a previously difficult way, according to Bakkes.
Jilt Bakkesdirector of information and communications technology, Avebe
"The sales contracting app extracts customer master data, pricing from previous contracts and material master data from SAP. The account managers then construct a new contract, including all kinds of conditions selected from a menu card," he said. "Then, depending on certain business rules, a workflow is started for further approval. At the end, the contract is created in SAP, where it forms the basis for sales transactions with that customer. The customer contract is then confirmed to the customer as being final."
Simplifying the way Avebe uses SAP ERP data and automating the contract-generating process has enabled the company to control costs. "Things went wrong in the past because contracts were not renewed on time or had wrong conditions attached, which we could not fulfill," Bakkes said. "This led to frustration for customers and credit notes for corrections, so this sales contract application had a positive business impact."
The app is run on the Mendix platform entirely in the cloud, and uses a combination of a Web front end and a mobile piece -- if the customer wants it, Bakkes said.
For Avebe, the best part about using the Mendix PaaS model is the reduced development time and costs. Bakkes said that it took about 20 days to get the sales contracting app up and running smoothly, with most of the development time and effort spent on setting up the interfaces for the first time. Getting people to understand and use the app for the first time took even longer. "The main problem was that it took some time to get everyone's noses pointed in the same direction," he said. "The introduction was somewhat slow, but that was purely related to change management."
The Mendix pricing structure for its app development platform is somewhat complex, Bakkes said, but is still a bargain compared to traditional development models. "There's an annual cost based on the number of apps and users, and this is not always straightforward," he said. "It's not a cheap environment, but it would have been quite a bit more to do it with traditional SAP developers -- probably triple the cost, with less functionality."
Flexibility is another advantage of PaaS for Avebe, Bakkes said. "Quick development is very suitable to the Agile way because you can get the requirements, then iterate a version of the app, see how it does and make changes immediately, if needed," he said. "Since development in Mendix takes little time compared to traditional coding, it gives us more agility to react to changes in the outside world."
PaaS can hone application development
All businesses today -- even ones like Avebe, which are not at the cutting edge of technology -- are going to need a dose of modern agility to thrive today, according to Johan den Haan, CTO at Mendix.
"I cannot come up with any business innovation without some piece of IT in it, so this innovation needs to become faster and faster," he said. "All kinds of new startups are disrupting existing industries, and all the enterprise customers that we talk with see that happening and that it's happening in any industry. So, they see that they need to act quicker, and the companies that know how to do that and are able to execute on that are winning."
Mendix's PaaS helped Avebe unlock the vast amount of data in its SAP ERP system, den Haan said, and in order to truly innovate, Avebe had to examine its applications from the ground up.
"We say throw everything out the door and start developing it again. Keep your systems of record for what they do best -- supporting your commoditized processes -- but put an agile layer on top of that, that allows you to differentiate and innovate," he said. "And that's exactly what we did there -- put a layer on top of SAP and make sure that you can develop an application and process specific to what SAP needs."
Gartner analyst: PaaS vendor market has stabilized
Anne Thomas, vice president and distinguished analyst at Gartner Inc., believes that the time is right for PaaS to take off in a big way. "I think PaaS is a great idea. Why bother to manage and maintain your application platform if somebody else is willing to do that for you?" she said. "I'm really challenged, at this stage, to come up a reason why I really want to keep everything on-premises myself and manage all that software infrastructure when I don't have to."
Thomas noted that some companies are reluctant to put their information in the cloud, as is generally required in a PaaS environment, but can resolve this concern by having someone else set up and run a private PaaS. "This means you still have this opportunity to have your developers get self-service capabilities to set up new environments for development and testing, and very rapid mechanisms that allow you to deploy your applications to new systems or to automatically scale up or down to support the needs of the system during operations," she said. "So all in all, I think PaaS is a no-brainer. People should be doing it."
Market volatility was another reason that companies shied away from PaaS in the past, but Thomas said that this situation has been changing, as well. The PaaS marketplace had many small vendors who fizzled out and left their customers scrambling to recreate the application systems.
"There's been a lot of consolidation, as we've had large companies come up and buy some of the hot, little, cool PaaS environments. And you've got all the major players now working in that space," she said. "Mendix is one of the smaller players, but they're also one of the most successful. They're a pure play, so the only revenue they get is related to their PaaS. They're doing well; they've got a lot of clients and every client that I've talked to really likes the environment, so I think that they're not at risk of having clients run away and go someplace else.”
The Mendix app development platform environment makes particular sense for companies that have SAP, Thomas said. "One nice feature in the Mendix environment is that it has an SAP connector, so I can build a new application and use the connector to integrate with the SAP environment," she said. "And with Mendix, I can build new Web applications, I can build mobile applications [and] I can build new integrations into the environment. I have a lot of capability -- and it's nice and fast -- and somebody else is managing and maintaining it."
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