What Does “Rise Of Everything-as-a-Service” (XaaS) Mean For The CXOs In 2019?
Businesses have long toyed with subscription-based models to access and deliver their services and products. Internet-enabled technologies have helped businesses to manage operations, and bring scalable solutions and tangible products to end users, both B2B and B2C, in increasingly flexible patterns.
When these disparate services are delivered via cloud on subscription-based models, they are often described as Everything-as-a-Service (XaaS) or Anything as a Service. XaaS has necessitated a paradigm shift among C-level executives.
In this article, let us take a look at what XaaS is, and what CXOs need to know about it in 2019 and beyond. We expect decision-makers to adopt a two-pronged approach, in which they use XaaS to run their businesses, and also deliver their own products and services via XaaS to their markets.
Understanding the growth of Everything-as-a-Service (XaaS)
While the as-a-service model started with SaaS, it quickly branched out beyond Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service as well. XaaS is a simpler way to describe technologies that are delivered over the internet to businesses. XaaS’s nomenclature does not lie simply in its convenience of verbal use.
- According to a Deloitte survey, 71% of 1,170 IT professionals admit that XaaS supports more than 50% of enterprise IT requirements.
- During 2017 and 2018, Gartner predicted SaaS to grow at 21.6 percent and PaaS to grow at 24.6%.
- The most astonishing growth was to be seen in the Infrastructure-as-a-Service sector, growing at 36.6% per annum.
Many solutions that were previously delivered onsite can now be delivered over the cloud. It is these technologies that are collectively called as XaaS. It must be noted that it is increasingly common to deliver tangible services and products on an as-a-service model as well.
Evolution of XaaS and its future
In the last couple of years, Google, Amazon, Citrix, and others have made Database Platform as a Service (dbPaaS), Function as a Service (FaaS), and Containers as a Service (CaaS) very popular. These specialized solutions have helped enterprises to access technologies that were virtually inaccessible. We are moving towards a situation where anything can be delivered as a service. In the past few years, we have seen these solutions offered by enterprising companies:
- Analytics as a Service
- Backup as a Service
- Content as a Service
- Energy Storage as a Service
- Games as a Service
- Knowledge as a Service
- Humans as a Service (temporary and permanent staffing solutions)
- Monitoring as a Service
- A Robot as a Service
- Testing as a Service
- Virtualization as a Service
Here are some important services that we expect to gain traction in 2019:
- Storage as a Service (STaaS): The demand for storing files, data, and libraries will increase exponentially, necessitating specialized storage services. These shall be delivered via Storage as a Service and will include S3 compatible storage solutions.
- Security as a service (SECaaS): The growing need to comply with GDPR, HIPAA, and other regulatory bodies will ensure the growth of SECaaS. CloudFlare, Cloudbric, and Incapsula are some examples of this model.
- Disaster Recovery as a service (DRaaS): With DDoS and other threats becoming apparent in 2018, more enterprises will focus on disaster recovery solutions. Millions have been spent on recovering from different kinds of disasters that there is now an entirely new branch of XaaS called DRaaS. This is an area that will grow quickly.
- AI as a service (AIaaS): With the importance of chatbots and other AI-related functions increasing, there will be a growing need for AI-based solutions delivered over cloud. Some examples include Azure ML, Amazon ML, and Lambda Labs.
- Payments as a Service (PaaS): Banks and financial institutions are particularly excited about Payments as a Service, as a European bank estimated that costs can be reduced by 60% by eliminating the need to invest in payments hardware and software, their maintenance and teams.
- Proof of Concept as a Service (POCaaS): Most businesses stop at an initial vision, and rarely move past that, resulting in delayed achievements and growth. Proof of concept solutions helps enterprises to envision their goals and make their visions more tangible. Proofs of concept are delivered as a service too and will see growth.
What are the benefits of XaaS?
As-a-service models provide users with scalability and the promise of maintenance. Here are some clear benefits of choosing XaaS:
- As there is no purchase involved, but only a subscription to a service, costs incurred are only a fraction of purchasing an entire service or product.
- Downgrading and upgrading are easy, as XaaS enables both horizontal and vertical scaling.
- Maintenance, upgrading, and service delivery are done by the vendor or provider. If you are the service provider, you can expect regular cash flow.
- As-a-service models catalyze the development of new products and services, which is good for both consumers and businesses. Attending to marketing situations can be quick and razor-sharp.
- It is easy to combine different as-a-service solutions to create a custom solution that works for each organization.
Let us take a look at two use cases to see how XaaS helped them.
Use Case 1
A cocktail of cloud services help marketing agency to focus on creative projects
Problem: A marketing agency faced difficulties sustaining its projects due to paucities in enterprise IT.
Solution: It chose to purchase CRM and HRMS subscriptions on the SaaS model, while Storage as a service (STaaS) helped it to safeguard important files related to projects. Security as a service (SECaaS) helped it to assure its clients that all data would remain confidential. To manage its marketing projects and deliver better services to its clients, the company picked solutions from Video as a Service (VaaS), AI as a Service (AIaaS), and Proof of Concept as a Service (PoCaaS).
Results: The agency was able to manage its projects in an agile manner, and focus on its own creativity rather than on technology.
Use Case 2
Restaurant enters a difficult market, wins customers’ hearts
Problem: A newly launched restaurant found it difficult to manage its operations and grow its customer base in a difficult market. Adopting a XaaS approach helped it to tackle its operational efficiency while nurturing its existing and new diners.
Solution: The restaurant began with a limited subscription to an HRaaS (human resources as a service). To receive payments and make inventory purchases more streamlined, the restaurant sought help to integrate Payments as a Service (PaaS) with its ERP’s API. To help build better relationships with its customers, the restaurant invested in a CRM delivered via SaaS. AI as a service (AIaaS) helped the restaurant to take orders via chatbots on social media, giving a competitive edge.
Results: Within no time, it was able to function on par with advanced startups and project a professional image, helping it to become one of the most popular restaurants in the neighborhood.
How decision makers should approach XaaS in 2019
- CXOs will need to move beyond subscription models to make XaaS work. Personalization and customization will drive growth in almost every sector, and XaaS is no exception.
- To make XaaS subscriptions more than services that can be plugged in and played via as-a-service models, CXOs will need to invest in predictive analysis that will help customize both business and consumer solutions.
- CXOs will need to adopt a two-pronged approach, in which they use XaaS to grow and manage their own businesses, and in parallel, arrive at services and products that help them reach out to their B2B or B2C markets.
Moving beyond the cloud
XaaS is moving beyond cloud, and has already encompassed brick-and-mortar services as well. Tangible services such as plumbing, transportation, security, consultation, training, and just about anything one can imagine can now be delivered with the assistance of Internet. For example, Uber and Lyft offer Transportation as a Service (TaaS) to business users, via their applications.
Going forward, we expect to see a culmination of cloud and non-cloud tangible services delivered via as-a-service subscription models. Decision makers will need to ride the XaaS wave to streamline their own internal operations, while also using it to nurture client and customer relationships.
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