The rise and rise of the “as-a-service” (XaaS)

I recently blogged about Unified Communications as a Service (UCaaS) and how its cloud-based communications and collaboration tools can help companies be more productive. The “as-a-service” (XaaS) approach is really at the heart of so much business transformation at the moment and it is fair to say that it is becoming a strategy in its own right. It is creating a whole new paradigm for customers and service providers.

XaaS: what’s new?

In the past we typically used to ship or download physical products as we needed them, but the introduction of cloud computing as a heavyweight enabler has given rise to the XaaS model. The XaaS approach brings with it an ongoing relationship between customer and supplier, in which there is constant communication, regular status updates and a genuine two-way, real-time exchange of information.

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This makes XaaS an attractive approach for customers, they really seem to be buying into it – the managed service nature of the relationship means they have to commit less money up front while enjoying less risk and still keeping up-to-date with the very latest technologies and product developments. Plus companies can also scale up or down, depending on their needs at a given moment in time – another important influencer on costs and another of those flexibility enhancers.

how mobile is helping power the XaaS revolution

So in the same way that the cloud itself has been a disruptive development for conventional IT’s ways of getting things done, so the as-a-service model is also changing the game. It is fair to say that the cloud is effectively the next step in the evolution of the internet, and the cloud is the conduit through which everything will in future be delivered as a service.

The XaaS model is changing everything in that it is both taking over applications and also taking over service delivery channels and basically cutting out the traditional middle man. With mobility becoming the new norm and the standard way of doing things, people can access the services and applications they want no matter where they are. Mobility, mobile device proliferation and the shift to faster mobile broadband connectivity are all helping to accelerate the process.

XaaS going mainstream

Software as a Service (SaaS) was arguably the first area in which the cloud delivery XaaS model found its way into the commercial mainstream, and the sector has gained significant momentum since then. Gartner predicts that the worldwide SaaS market will exceed $22 billion in 2015, almost double its value in 2011.

The benefits that SaaS brings to companies are true of all the other XaaS alternatives, such as Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Storage as a Service, Security as a Service, UCaaS and others. The big data revolution is seeing more organizations look into the possibilities offered by storage as a service – companies are creating more internal and external communications data, more video and so on, which means that storing data securely becomes an increasingly significant legal and compliance issue.

So by outsourcing these service provisions to a qualified expert partner, organizations immediately get lower “Total Cost of Ownership” (TCO) than with traditional, on-premises solutions. Deployment of services and applications is faster and easier which means that companies can reduce OPEX and get new offerings and services to market faster. The initial CAPEX is lower, IT support expenditure is reduced through the XaaS model and scalability is built-in to the proposition. Design obsolescence is also a thing of the past under an XaaS model. So it becomes another major disruptor for suppliers.

Overall people are switching on to the XaaS model because it takes the TCO and converts it from being a concern into something which is more controllable, and which has agreed service levels. Traditionally, IT initiatives were known for suffering from project overruns, where companies didn’t know what they would get at the end of a process which took longer than intended and which of course cost more. Those types of incidents were what cost CIOs their jobs. The XaaS approach removes this risk and while there can be a worry about having less control over the whole, companies have come round to seeing the benefits as outweighing this.

but the network remains key

So while the benefits and reduced risks of the XaaS model are clear, the network backbone is what powers the proposition forward. Cloud services all rely on a robust network to give the reliability that services need and that end-users expect, so as companies make the shift to the XaaS paradigm, they must always think about their networks too. If reliable, high speed connectivity is not available then the user experience declines and the proposition weakens.

innovation acceleration

Perhaps the real proof point of the XaaS model is that it genuinely accelerates innovation. No customer likes deploying something and then finding that a new version of the software, hardware or whatever has come along a few months later and they are already behind the curve. Under the XaaS approach, innovation can occur in real-time, customer feedback can be gathered and acted on immediately, organizations – and their own customer offerings – are able to stay at the cutting edge with minimal effort.

This is where XaaS distinguishes itself from the traditional thinkers who still believe that it’s better to build things themselves – the traditionalists will end up spending a lot more money to be locked into something that could pretty soon be out of date. Open integration environments that encourage application development are flourishing. And through this kind of innovation the smart providers of today are set to kill off the old paradigm by opensourcing this ongoing innovation and new ideas.

This new paradigm, now has a number of competing labels emerging. We will see with increasing frequency XaaS from our industry, no matter which label the industry adopts, the ‘Everything as a Service’ or ‘Anything as a Service’ label. One thing is guaranteed, we will continue to see the rise and rise of the “Everything-as-a-Service” /  “Anything-as-a-Service” (XaaS) model.

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