Business Process as a Service Estimates are Going to Be Huge, For Obvious Reasons

It typically is difficult to estimate the size of a big a new market when that new market essentially cannibalizes existing businesses in the process.

Something like that probably is going to happen with cloud computing. Cloud-based services will cannibalize other existing functions and revenue streams. 

Consider the notion of “business process as a service.” What’s a business process? Business process management is said by IBM to include such functions as

• Web analytics
• Enterprise marketing management
• Business-to-business integration
• Supply-chain management
• Security governance, risk management and compliance
• Business service management

BPaaS clearly has potential to shift customer buying, the supplier base and revenue streams as cloud alternatives develop and displace legacy alternatives.

Email management, communications management or shopping cart services and catalog processes might be other examples of possible candidates for BPaaS displacement.

Estimating how big the BPaaS market actually is will be a tough exercise, though. What counts as a business process “as a service?” Is it only the value of the contract to use a retail checkout system, a catalog or a fulfillment process? Is it partly the value of the transactions, or the value of the products traded?

For any cloud-supported mobile or Internet advertising system, what should be counted? Is it the value of the advertising, or only the commissions an exchange might earn? The same question can be asked for any cloud-based payment system.

The point is that it is possible cloud services markets might be bigger than currently envisioned, only partly depending on “what” gets counted.

The reason is that more and more business processes using software, processing and storage are shifting to cloud mechanisms, even though we traditionally have viewed software delivery, computing resources, storage and development environments are the primary cloud markets

That might be one reason why BPaaS, already represents the largest segment of what analysts at Gartner now tabulate in the cloud services realm,  accounting for about 77 percent of the total market, Gartner now argues.

BPaaS is the largest segment primarily because of the inclusion of cloud advertising as a sub-segment.

But you might also argue that BPaaS is so big because it basically represents a redefinition of the traditional outsourcing business. And that is a larger business than simple computing, storage and applications delivery.

One expects to see big numbers for cloud revenues. But one reason those estimates can get so large is that traditional outsourcing and advertising, both substantial businesses, logically can be counted as a BPaaS.