PayPal becomes the Pied Piper, leads StackMob to a dead end

Last week, StackMob announced it is shutting down. In December 2013, it got acquired by PayPal, the leader in online payments. This announcement came at a time when the mobile developer community was expecting PayPal to augment StackMob by integrating its mobile payment libraries.As someone who closely follows the MBaaS space, I have great regards for StackMob -- not just as an early mover in this space but someone who pretty much sets a standard for rest of the players in the market. Whether it was hosting the HTML 5 applications on its platform or the Github integration, StackMob constantly raised the bar. In 2013, StackMob introduced an innovative pricing model in which the standard API calls are offered for free and only the value-added services were charged. This was a certainly a game-changer.

When Facebook acquired Parse, StackMob went all out inviting Parse customers to its platform. Ty Amell, CEO assured that StackMob remains a scalable, reliable and secure backend solution for developing mobile applications. Breaking the promise in less than a year, Ty announced that the service is shutting down.

It is still not clear to me why PayPal chose to kill StackMob. With more than 40,000 apps and having processed more than 300 million APIs, there is a vibrant community built around it. This community could be leveraged to drive the adoption of PayPal mobile SDKs and APIs.

In the official blog post announcing the shutdown, Ty said, “Before we part ways, I want to share that the close of StackMob is bittersweet for our team, since we poured so much into creating our product and serving our customers. But we are energized and thrilled with the opportunity ahead for us at PayPal, which we truly feel will make a direct impact on people all over the world. By closing the doors to StackMob, we will be able to focus 100% of our energy on extending innovation in mobile technologies that will let users access the rich capabilities of the PayPal global network. We truly believe our work at PayPal will make it easier for developers to create seamless payment solutions that span online, mobile and in-store experiences. A daunting, but exciting challenge.”

Why would someone kill a successful platform with tens of thousands of customers for the sake of building a niche, narrow subset of the original platform? I am sure that this comes as a shock to the original development team of StackMob who will now be forced to work on PayPal APIs and mobile payment SDK.

This announcement raises many questions -- what happens to the data that is locked inside StackMob’s platform? What will happen to those mobile apps that have hardwired StackMob’s APIs? Ty mentioned that the service would be completely shutdown by May 11. That hardly leaves any time for the customers to switch to another backend. A quick look at the customer list reveals big brands like Citi, McKinsey and Verizon. What will happen to the apps published by these companies? Though StackMob has offered a data export tool, it will not be of much help to the developers who tightly integrated the APIs with their mobile applications.

I am now skeptical about Parse, which has become a part of Facebook. There hasn’t been much innovation since the acquisition. Like PayPal, Facebook is sitting on a great opportunity to leverage the huge customer base and the developer community around Parse. I sincerely hope that Parse doesn’t meet the same fate as one of its biggest and able competitor.

It is indeed disappointing to see PayPal act like the Pied Piper of Hamelin leading the StackMob developers to a dead end!