Engine Yard Claims Top PaaS Position With $28M in Revenue

Engine Yard claims that with its $28 million in revenue for 2011 it is the leading open platform as a service (PaaS), and the company challenges any other player to step forward and prove them wrong.

Engine Yard officials said the company doubled its year-over-year revenue in 2011 and increased its customer base by 50 percent so that it serves more than 2,000 customers. The PaaS market continues to evolve, with new players entering the fray. Engine Yard has been around for a while as has Google App Engine and Salesforce.com with its Force.com offering. However, a new crop of PaaS players is emerging, including AppFog, CloudBees, VMware’s Cloud Foundry, eXo Cloud IDE, Jelastic, Red Hat’s OpenShift, ActiveState’s Stackato and Microsoft’s Windows Azure, to name a sampling.

Yet Engine Yard maintains it is the leader in the open PaaS space based on its revenue and customer base. “We believe this makes us the largest open PaaS on the market,” said Mark Gaydos, senior vice president of worldwide marketing at Engine Yard. “We’re one of the oldest—we’ve been around six years—and we don’t know of another company out there deploying an open-source stack and an independent stack that can match us. But it’s a little difficult to prove because many of the companies coming out with PaaS offerings are private and don’t state their numbers.”

Engine Yard began as a hosting spot for Ruby on Rails apps, but has since branched out to support PHP through its acquisition of Orchestra last year. Mike Piech, vice president of product management and marketing at Engine Yard, said the company would be looking at supporting other languages as well. In November, Engine Yard launched Engine Yard Labs and enabled early access support for Node.js applications on the Engine Yard Cloud. Piech said other languages are under consideration.

“We don’t have an announcement on the next one coming out, but we are actively pursuing different opportunities,” Piech said

Meanwhile, Engine Yard Orchestra PHP Cloud will debut its second major release this month, Gaydos said. New enhancements include greater configurability through APIs as well as higher performance derived from more highly optimized stack images. Auto-scaling in the elastic configuration is now better tuned to track variations in load, and numerous additional performance and reliability enhancements make this an important release for customers looking a solid PHP PaaS, the company said.

In addition, Engine Yard announced that RailsInstaller has achieved more than 170,000 downloads. RailsInstaller, an Engine Yard-sponsored open-source project, is a one-command installation tool that makes it easy to instantiate a complete development environment for Ruby on a laptop or desktop. Now supporting Windows and adding OS X this month, RailsInstaller puts the latest versions of Ruby, Rails, Bundler, Git, SQLite and other components on a developer’s system, all integrated and configured correctly so a developer doesn’t have to waste time with individual component installations and debugging dependencies, company officials said.

“We believe that 2012 will mark the beginning of a multi-year growth trend in PaaS. As stated in our ‘PaaS Road Map: A Continent Emerging’ report, most enterprises will have at least part of their run-the-business software functionally executing in the cloud, using PaaS services, directly or indirectly, by 2015,” Yefim Natis, vice president and distinguished analyst at Gartner, said in a statement. “Presence in the PaaS market will be an essential element of leadership for application infrastructure vendors.”

“We recommend Engine Yard Cloud to all of our clients, including Toyota Kenya, because we get huge time and cost savings,” said Shaun Richards, managing partner of Platform45, also in a statement. “We would need another five people to manage infrastructure internally. Instead, we rely on Engine Yard, and we focus our developers on writing code, which keeps them and our customers happy.”

In 2011, Engine Yard delivered a series of initiatives that drove customer success and PaaS adoption for companies with fast-growing, high performance Web applications.

In the process, Engine Yard grew its head count to 135, beefing up its engineering and support organization by 50 percent. And the company saw a 58 percent growth in existing-customer revenue from rising use of the Engine Yard platform.

Engine Yard also continues to expand its commitment to open-source projects and to bring new expertise in-house.  The company employs the core committers to the JRuby project to deliver n implementation of Ruby on the Java Virtual Machine (JVM). And many of Engine Yard’s other engineers are serious committers to other major open-source projects across the Rails, PHP and other communities.

“Engine Yard provides the reliability, flexibility and deep expertise in Ruby on Rails and PHP that we need for our clients’ projects such as BurdaStyle.com, VBS.tv and Krrb.com,” said George Eid, founding partner of Area 17. “When krrb.com, a popular commerce site, had daily traffic spikes as high as 7x, the platform performed perfectly. By relying on Engine Yard, we benefit from their extensive experience, and we can focus on building high-performance mobile and Web apps that serve millions of customers.”

“Our tremendous growth reflects the increasing market awareness of the value PaaS provides companies," John Dillon, CEO of Engine Yard, said in a statement. “In 2012, we believe even more companies will seek to run their applications in the cloud, so they can focus on innovation rather than managing their underlying platform."

Both Gaydos and Piech said that although several other PaaS providers have entered the market, they believe their primary competition in the PaaS space is companies trying to create their own PaaS platforms.

“It’s mostly companies doing it themselves,” Gaydos said.

“The important takeaway from the $28 million in revenue and the more than 2,000 customers is that there are real apps running on Engine Yard. And this is their decision making and their investment.”

Indeed, Engine Yard delivers a commercially hardened and secure solution that thousands of companies depend on for their production applications. The company serves customers across a range of industries, including high-tech, consumer electronics, telecommunications and media.

Asked if he believes 2012 to be the year that PaaS reaches maturity, Gaydos said, “What we see is that there is new adoption from enterprises. Initially the investment was from Web 2.0 companies and then developer shops. Then, in the second half of 2011, enterprises started to adopt the cloud and began to try to be more Web 2.0-esque because it helps them be more productive.”

In its 2012 predictions on PaaS, Gartner estimates that by 2015, the enterprise use of PaaS will grow from 3 percent today to 43 percent. And by 2015, comprehensive single-source PaaS software suites will emerge from the leading providers and their partner ecosystems.

Meanwhile, in a press release from late last month about its own momentum, CloudBees, a Java PaaS provider, announced that it grew platform services subscriptions by a factor of 10 in 2011, versus comparable 2010 numbers. This growth reflects the rapid acceptance and adoption of the CloudBees’ PaaS for complete, end-to-end Java application development and deployment, the company said.

In January of 2011, CloudBees became the first Java PaaS to become generally available, covering the complete Java application development-to-deployment lifecycle, the company claims. CloudBees also further deepened its support for Java in 2011, announcing its support for developing and deploying applications using the Java EE 6 Web Profile.

In addition, CloudBees officials claim the company became the first Java PaaS to bring an integrated ecosystem of cloud-based services to its platform—the CloudBees Partner Ecosystem—which currently provides access to 10 software as a service (SaaS) and ISV partners. Moreover, CloudBees closed out 2011 by launching Jenkins Enterprise by CloudBees to provide enterprise-class support and enhanced capabilities for the popular Jenkins Continuous Integration (CI) platform in an on-premise environment.

“We are processing 25,000 requests per minute for Web page loads. Thanks to CloudBees, I have managed to avoid hiring a full-time systems admin to support what would be equivalent to 25 in-house servers,” Charles Teague, CEO of Lose It, the popular weight-loss application, said in a statement. “CloudBees is showing momentum in the market and is saving many hours, dollars and effort for Lose It! We are realizing value in terms of lower infrastructure maintenance costs, productivity and access to the computing resources we need, when we need them.”

“The market is realizing the value CloudBees’ PaaS provides in terms of leveraging the cloud as a development accelerator and enabling developers to be more productive—eliminating the friction and ongoing hassles of maintaining infrastructure, and supporting the entire application lifecycle,” Sacha Labourey, CEO and founder of CloudBees, said in a statement. “The ability to develop and deploy a production application—and an entire business—without the in-house infrastructure investment or ongoing maintenance hassles is what we brought to the market in 2011. It was truly a monumental year for CloudBees. We raised our series B round of funding, added horsepower to our executive team, signed on many new customers, and even lowered the cost of our PaaS development services, due to the efficiencies we have developed into our platform. The list goes on. In short, we have established CloudBees in the PaaS market, and I look forward to continuing our growth and success in 2012.”