Vendors Risk Loss of Potential Customers Due to Hype around BPaaS

As public cloud services continue to proliferate, Business Process as a Service – a.k.a. BPaaS – is creating quite a stir, and not in the positive way one might think. While a new study found that the BPaaS concept is the logical evolution of cloud services, the marketing messages surrounding the concept is confusing to potential buyers.

According to Ovum (News - Alert), the potential impact of cloud on propositions of platform business process outsourcing (BPO) and BPaaS has caused distinctions among the various propositions to become increasingly blurred and thus further confused buying organizations.

In a new report, Ovum said the BPaaS concept “appears to be the logical evolution of cloud services, where standardized processes have been wrapped around software-as-a-service (SaaS (News - Alert)) offering, rather than of BPO.”

However, BPaaS is more a future vision that is not yet resonating with buyers. In fact, most marketing messages are reminiscent of the early hype around cloud services, according to Thomas Reuner, Ovum principal analyst and author of the report.

“Ovum assessment of cloud services and services adopting cloud components need to be conducted within the wider framework of industrialization,” Reuner said. “The evolution of BPO and the impact of cloud components on BPO delivery need to be discussed around cloud computing needs that are balanced with the complexities that buying organizations currently face.”

Ovum advises that the risk of misrepresenting BPaaS can be minimized by not using platform BPO and BPaaS interchangeably. However, Reuner said providers need to ensure that this propagation of business processes does not create a new layer of complexity for potential buyers.

“Despite being highly standardized offerings, cloud services (and so BPaaS) will lead to more complexity for buying organizations as cloud standards have still to emerge. This will require new sets of governance skills to make this a reality,” Reuner explained. “The push toward platforms is increasingly accompanied by bundling of infrastructure components as part of the BPO contract. Consequently the boundaries between IT outsourcing and BPO are becoming blurred.”

In September 2012, Gartner (News - Alert) said the public cloud services market is forecast to grow 19.6 percent this year to total $109 billion worldwide. Business process services represent the largest segment, accounting for about 77 percent of the total market, while infrastructure as a service (IaaS) is the fastest-growing segment of the public cloud services market and is expected to grow 45.4 percent in 2012.