A trend we have been following in the restaurant technology space is a gradual move by the top vendors to a Platform-as-a-Service (PaaS) model.
By Allen Eskelin | CEO | Peak Portfolio | Feb 14, 2019
A trend we have been following in the restaurant technology space is a gradual move by the top vendors to a Platform-as-a-Service model.
Over the past few years, the slow transition of the traditional restaurant application vendors to a cloud-based architecture has opened the door for well-funded startups to seize the opportunity and build innovative cloud-based restaurant applications.
This has led operators to embrace a best-of-breed model with a cast of vendors providing the applications they need to run their businesses. The result is that operators are now struggling to manage a complex vendor ecosystem of integrated applications and get them all to play well together.
Cloud-based architectures have increased the rate of application innovation, allowing upcoming vendors to check more boxes by providing more of the applications restaurant operators need to run their businesses. As a result, the big traditional restaurant application vendors are racing to do the same through both acquisition and in-house development.
This increase in the number of applications provided by restaurant technology vendors will likely inspire vendors to shift from a Software-as-a-Service (SaaS) model to a Platform-as-a-Service (PaaS) model.
First, what is Platform-as-a-Service (PaaS)? Wikipedia defines it as "a category of cloud computing services that provides a platform allowing customers to develop, run, and manage applications without the complexity of building and maintaining the infrastructure typically associated with developing and launching an app".
A key component of the definition is that applications is plural. To embrace the PaaS model, vendors shift their focus from providing an application to providing a platform of applications. Another key component is providing customers the option to develop, run, and manage custom applications on the platform. This allows customers the potential to group all their business applications (or at least for a specific business function) on one platform.
Now that we have an understanding of what the PaaS model is, what are some indicators that restaurant technology vendors are moving toward PaaS?
These are just a few indicators of vendors expanding the number of applications they provide in the restaurant space, prompting the potential shift in vendor strategies from applications to platforms. Now let's discuss some of the enablers for this shift to take place.
The first and most obvious enabler is cloud computing. By moving applications to the cloud, vendors are able to expand existing applications and launch new applications more rapidly. It also creates the opportunity for vendors to allow customers to build and host custom applications within their infrastructure, enabling easier application and data integration.
Similar to the above enabler, the increase in speed and reduced cost of innovation has forced application vendors to expand their capabilities or lose business to the growing list of well-funded startups driving new innovation. This has forced the established vendors to grow their capabilities through a combination of acquisition and a shift to a platform model to enable more rapid growth of applications/capabilities.
Now that we have an understanding of the shift from applications to platforms in the restaurant technology space, what are the benefits and drawbacks?
I have two recommendations for operators embracing the shift to PaaS:
As far as my recommendations to the restaurant technology vendors moving to a PaaS model:
While the vendors appear to be moving toward a one-stop-shop PaaS model, operators may not want to put all their eggs in one basket. Next week, we will be sharing an alternative strategy to make the best-of-breed vendor model work as you scale your chain to an enterprise-level.
How Grid Decision is adapting to PaaS
Background: Restaurant technology vendors are currently filling out Grid Decision's 500-1000 question RFIs each quarter for multiple applications. We use this data to produce quarterly leaderboards. But more importantly, we now have vendor data refreshed quarterly. This allows us to produce client-specific Custom Grids by applying an operator's priorities to the data in a one-day engagement and produce the same level of detailed scoring matrix as the typical 4-8 week RFP process.
Changes we're making: In Q2, we are consolidating all of our store solution RFIs into one big RFI. We are making this change not only due to this shift we see coming toward PaaS, but also because most vendors are already participating in most or all of the RFIs. Since the Business, Services, Integration, and Technology sections are the same in each RFI, this will allow them to fill that information out once for all their solutions. Then they can fill out the Experience and Solutions sections for only the applications they provide.
What this means for Operators: Because we will now have one giant RFI, including all the core store applications/capabilities, we can now provide the following:
- Custom Grids comparing vendors for a specific application
- Custom Grids comparing vendors for any combination of applications
- Custom Grids comparing vendors for all applications collectively - best for selecting a Restaurant PaaS vendor
- For multi-brand operators, we can apply unique weighting models for each of your brands to any of the above three Custom Grids. This helps determine if there is alignment between brands on whether the best vendor for each brand is the same as the best vendor for all brands.
If you are an operator trying to navigate the shift described in this article, let us know if you would like a deeper dive on how the Custom Grid can help.