PayPal's StackMob acquisition should serve as a warning signal

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PayPal became the latest big name to get into backend-as-a-service with its announcement that it has acquired StackMob. While these acquisitions lend legitimacy to the BaaS market, they should also make BaaS customers think hard about which provider they choose.

The deal follows Facebook’s acquisition of Parse, another BaaS provider, earlier this year. The big question hanging over the more recent acquisition is whether StackMob will focus on payments only or if it will continue to offer an array of backend services.

BaaS offerings make mobile app development easier because they provide services for common app features like messaging and sign-in mechanisms. These functions need to work well but don’t need to be differentiated and it takes time for developers to otherwise build them over and over for each app.

When Parse got bought by Facebook, Parse’s CEO said that the company would continue to offer the same services it always had but that it would also take advantage of Facebook’s reach to help its customers with distribution and promotion of apps. It seems as though that strategy has worked. Within two months of the acquisition, Parse grew from running 60,000 apps to 100,000 apps, according to a Techcrunch story.

PayPal didn’t divulge much in its announcement of the StackMob acquisition but it seemed to hint that the future of the StackMob team’s work would revolve around payments.

“By joining PayPal, the StackMob team will maintain its focus on developers and extending innovative mobile technologies that aim to allow consumers to access the rich capabilities of the PayPal global network,” StackMob CEO Ty Amell says in the announcement. “We believe that our work at PayPal will make it easier for developers to create seamless payment solutions that span online, mobile, and in-store experiences.”

Sounds to me like the focus will be on payments and not necessarily the other functions that StackMob currently offers. I’ve asked Amell but haven’t yet heard back.

While the acquisitions of StackMob and Parse by big names shows that BaaS is a legitimate service, these deals should also raise a warning signal to BaaS users. Amell told Techcrunch earlier this year that “the dirty secret with backends-as-a-service is that it takes a lot of time and money, especially when you’re talking about enterprise.”

That indicates that all the other independent BaaS providers might need backers with deep pockets. While all the providers talk about making it easy for businesses to remove their apps, doing so is extra work that nobody needs to undertake, especially if required on the fly because your provider is hurting.

A number of smaller BaaS providers were acquired last year, primarily by other relatively small companies. Appcelerator bought Cocoafish, Apigee acquired Usergrid, and Flurry bought Trestle.

Many people expected that the big cloud players like Amazon Web Services, Google, and Microsoft would buy the BaaS providers but it seems that those providers might end up building basic BaaS offerings themselves rather than making acquisitions.

Kinvey and Cloudmine are two other BaaS providers that remain independent.

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