Business Model Generation: Value network

Platform as a Service

Enable ubiquitous and on-demand access to a shared pool of resources

Illustration of Platform as a Service
Run a Platform as a Service play


Also called: PaaS, Infrastructure as a Service

Key Partners Key Activities Value Propositions Customer Relationships Customer Segments
Key Resources Channels
Cost Structures Revenue Streams
The business model canvas was designed by Business Model Fondry AG and distributed under a Creative Commons license.

How: Provide shared and configurable processing resources on demand that can be rapidly provisioned and released with minimal management effort.

Why: Providing a shared platform helps reduce the complexity of building and maintaining infrastructure for its customers.

This business strategy is part of the Business Model Patterns printed card deck.

Proven business models that have driven success for global leaders across industries. Rethink how your business can create, deliver, and capture value.

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Platform as a Service (PaaS) is a cloud computing model in which a third-party provider furnishes hardware and software tools to users over the internet. These tools are primarily intended for application development, and the provider hosts the hardware and software on its own infrastructure, thereby eliminating the need for developers to install and maintain in-house hardware and software for new application development or execution.

PaaS does not replace a company’s entire IT infrastructure for software development, but instead, it is provided through a cloud service provider’s hosted infrastructure. Users commonly access these offerings through a web browser, and PaaS can be delivered through public, private, and hybrid clouds to provide services such as application hosting and Java development.

PaaS services often include functionalities for development team collaboration, application design and development, application testing and deployment, web service integration, information security, and database integration. Users typically pay for PaaS on a per-use basis, although some providers charge a flat monthly fee for access to the platform and its applications.

PaaS vs. SaaS

The distinction between PaaS and Software as s Service (SaaS) can be nebulous, as both models provide access to services often hosted in a cloud. However, it is essential to differentiate between platforms and software.

A SaaS offering grants access to a finished application or workload, such as a human resources or finance application, in exchange for a recurring fee. The SaaS application is hosted on the provider’s remote infrastructure, eliminating the need for a business to purchase, deploy, and maintain the application in-house, thus reducing the organization’s IT footprint.

On the other hand, a PaaS offering typically grants access to an array of related applications or tools intended to assist businesses in performing complex, interrelated tasks; the most common example being software development and testing. PaaS components are also hosted on the provider’s infrastructure, and users can access the platform’s components for a recurring fee. PaaS can eliminate an entire toolset from the local data center, further reducing the organization’s IT burden.

Where did the Platform as a Service business model pattern originate from?

PaaS, or Platform as a Service, has come a long way since its inception. The first public platform as a service was created in 2005 by Fotango, a London-based company, and was known as “Zimki”. Zimki was a JavaScript web app development computing platform that eliminated repetitive tasks when creating web apps and services. It performed all operations and aspects of infrastructure automatically, such as configuration, security, backups, scaling, and provisioning.

It was a pay-as-you-go code execution platform, which allowed developers to create and deploy web services or apps without incurring start-up costs on a utility-based computing platform. It provided a multi-tenant platform that used a single language, Javascript, so developers could create complete apps and expose all functions within Zimki as web services. Unfortunately, Zimki stopped running in 2007, as it was determined that it wasn’t core. However, it had demonstrated the technical viability of a PaaS and highlighted the dangers of being dependent on a single provider.

The provider of Zimki then started to talk about Framework as a Service, later renamed as Platform as a Service, and in 2008, Google launched App Engine, which was originally limited to 10,000 developers. This was considered a revolution in cloud computing, credited with turning it into a big industry overnight. The original goal of PaaS was to simplify the process of code-writing for developers, with the PaaS provider handling the infrastructure and operations. Initially, all PaaS were in the public cloud, but as businesses sought more control, hybrid and private PaaS options (managed by internal IT departments) were established.

Applying the Platform as a Service business model

One of the principal benefits of PaaS is the ability to pay on a recurring or per-use basis, which eliminates the capital expenses traditionally associated with on-premises hardware and software. This shift in responsibility from the internal IT team to the PaaS provider can streamline the development process and increase efficiency.

Advantages of the PaaS model

Many PaaS products are geared towards software development and provide compute and storage infrastructures, as well as text editing, version management, compiling, and testing services that assist developers in creating new software quickly and efficiently. PaaS products also enable development teams to collaborate and work together, regardless of their physical location. Additionally, PaaS architectures keep their underlying infrastructure hidden from developers and other users, making the model similar to serverless computing and function-as-a-service architectures.

Challenges of the PaaS model

  • Service availability or resilience can be a concern, as a provider’s service outage or other infrastructure disruption can adversely affect customers and result in costly lapses of productivity.
  • Vendor lock-in is another common concern as users cannot easily migrate many of the services and data from one PaaS platform to another competing platform.
  • Internal changes to a PaaS product can also be disruptive, for example, if a PaaS provider stops supporting a certain programming language or opts to deliver a different set of development tools.

It is essential for users to evaluate the business risks of service downtime and vendor lock-in when selecting a PaaS provider and to follow the PaaS provider’s service roadmap to understand how the provider’s plan will affect their environment and capabilities.



The cloud platform lets developers run and scale software and offer complementary components to third-party ecosystems.


The platform manages image, video, and media uploads and personalizes and optimizes the service for every user regardless of device.

Trigger Questions

  • What infrastructure problem of your customers can you solve to enhance their agility?
  • How will you make it effortless for users of your platform to instantly create value of their own?

This business strategy is part of the Business Model Patterns printed card deck.

Proven business models that have driven success for global leaders across industries. Rethink how your business can create, deliver, and capture value.

Get your deck!

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