Coghead, maker of a cloud-based enterprise application development platform, is shutting down, according to its Web site.
In a letter to customers posted on TechCrunch, the startup cited "economic challenges" as the reason for its decision.
Existing customers will be allowed to use the service until April 30 on an unsupported basis and should retrieve their data by that date.
One competitor, Caspio, quickly seized on the news, announcing a "transition program" on Thursday that would provide Coghead customers with two months free use of its platform, training and other services.
Coghead officials could not immediately be reached for additional comment Thursday.
The Redwood City, California, company, which highlights its platform's ease of use and lower cost compared to traditional in-house development, was formed in 2003 and is just one of a wide range of so-called PaaS (platform as a service) vendors. Others include Salesforce.com's Force.com, Google App Engine and Microsoft's Azure Services Platform.
In a recent report, Forrester Research analyst John Rymer said companies should consider using PaaS offerings but also noted the inherent risks.
"Most of the PaaS vendors -- even big ones like Google and Microsoft and experienced ones like salesforce.com -- have short track records with their products," he wrote. "Treat these companies and their products as you would any startup vendor or version-one product from an established supplier. Does the vendor have a healthy and growing roster of customers? Is the product line making money?"
PaaS products also provide users with less flexibility than typical on-premise platforms, since the PaaS vendor tends to dictate the database, storage and application framework used, and may even employ a custom programming language, Rymer said.