One year old platform as a service (PaaS) provider dotCloud announced the second round of enhancements for the year to its cloud-based service. The company as introduced three new environments:

• dotCloud Sandbox – a free, fully supported, unlimited use environment for development, testing and experimentation
• dotCloud Live – a deployment environment designed for live/production applications
• dotCloud Enterprise – a customized environment  that comes with white glove support and in-depth monitoring by dotCloud’s

Each of the environments supports the 12 technology stacks and databases offered by dotCloud. In addition to the new environments, dotCloud also introduced a use based pricing. The company’s CEO and co-founder Solomon Hykes explained the new pricing model saying,

“When we launched a year ago, nobody used PaaS for mission-critical applications and we designed our pricing accordingly. A year later, everything has changed and the market has grown incredibly. We are talking to real businesses looking to deploy real, mission-critical apps. They expect support, they expect guarantees and they expect control over their stack. They are asking: ‘can I rely on you for the long term?’. That is what ultimately will differentiate trustworthy PaaS providers from the rest. And that is what our new pricing enables.”

The explanation of the pricing was satisfactory to many readers at Hacker News, which began complaining the new pricing was confusing almost immediately. dotCloud should be careful not to alienate customers. The PaaS market is rapidly becoming more competitive.

Oracle is entering the PaaS market with its new public cloud offerings. Microsoft ramped up support for open source, including Linux, in its latest upgrade to Azure. Amazon just made big improvements to its support model. Salesforce continues to add new features. Rumors are flying that several infrastructure-as-a-service providers are preparing to enter the rapidly growing PaaS market. All of this activity signals that the PaaS market is getting very competitive very fast.

Traditionally, PaaS has received much less attention than its “as-a-service” siblings, but that’s quickly changing. Demand for PaaS is growing fast, which means new revenue opportunities. MarketReasearch.com predicts the global PaaS market will grow 26 percent per year through 2014. TechNavio predicts a much higher 69 percent growth rate. Gartner’s analysis further supports predictions of PaaS market expansion. According to Gartner’s latest research, 2012 will mark the beginning of a multi-year growth trend in PaaS and by 2013 most major software vendors will have a PaaS offering. Looking further into the future, new programming models and standards will emerge in, which will result in new leaders will emerging.

The rapid pace of modern business, strained resources and growing competition are making businesses much more open to exploring solutions that simplify technology management. With traditional approaches, it can take days or even weeks to create a new development and deployment environments, and then someone must manage the resources. However, the problems don’t stop there. Many companies struggle with configuration errors, poor tuning and difficulty keeping systems patched. The effort required to address these issues can significantly impact the speed of innovation organizations are able to achieve.

PaaS eliminates many of those issues, which is an attractive value proposition. However, it is not a magic bullet. Companies must consider security and privacy implication. In addition, because no true standards exist for PaaS, integration and migration can become a very big issue. In spite of these concerns, PaaS has gained traction and adoption is picking up momentum.