It encompasses the many products, tools and technologies that vendors deliver to users as a service over a network — typically, the internet — as an alternative to providing them locally or on-site to an enterprise. We have all experienced some level of internet downtime and, even with XaaS, this is a potential issue that may arise. If your XaaS provider’s servers go down then that will also affect you.
We understand that modern businesses comprise a number of highly complex, interrelated systems, which is why we don’t view any transformational element in isolation. We can help you think through the implications of the business decisions you’ll need to make as you transition to an as-a-Service model. Adopting as-a-Service business models has become a business imperative for many organizations. Newer companies that launched with these models at the outset are at a considerable advantage.
From the course: Everything as a Service (XaaS) is the Future of Business
XaaS solutions are designed in a way that allows them to be easily adapted to most companies’ existing infrastructure. This, of course, allows innovators to begin work within a week or even less, helps minimize time-to-market, and revolutionizes customer experience. XaaS-centric business models have the potential to reach a broader customer base, encourage the delivery of client-focused products and services, enable efficient exploration of new markets, and ease profit-making activities.
Businesses must carefully evaluate the long-term implications of their XaaS choices to avoid vendor lock-in and maintain flexibility. Numerous real-life examples illustrate the diverse applications of XaaS across various industries. One prominent example is Microsoft Office 365, a cloud-based suite of productivity tools.
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The vast majority of adopters report that XaaS has helped them create new business processes, products and services, and business models—and has even changed how they sell to their customers. Deloitte has guided myriad companies through the transformation to XaaS models. We have deep
knowledge of consumption-based business models and their challenges, and we can help you think through the implications of the business decisions you will need to make as you transition to a
- XaaS may hold the key to this transformation, and it would be safe to say that XaaS solutions are the harbinger of a paradigm shift in many industries.
- This should be factored in a while moving to IaaS as delinking it from the cloud will be challenging once you rely immensely on IaaS.
- In fact, 82% of our respondents agree that XaaS has accelerated experimentation by allowing their company to rapidly try out and evaluate new solutions.
- As the frequency of cybersecurity attacks increases, solutions such as malware as a service leverage public cloud platforms to help enterprises protect themselves against cyberattacks.
- Organizations may need to engage more meaningfully with their vendors to address issues they have struggled to conquer alone.
Basics Of Cloud Computing
And while the vast majority believe their customer experience is better with XaaS than with traditional IT, adopters express little allegiance to their current XaaS vendors. Adopters are seeking more consultative relationships with their providers that can help them conquer their ongoing issues. Long employed by utility and telecom companies, flexible consumption business models have now expanded to businesses in other industries, creating value for both customers and the companies that adopt them. Benefits to customers include flexibility, convenience, and affordability, while vendors can enjoy financial predictability, lower unit costs from aggregation, and enhanced customer relationships. Industries that traditionally sell hardware, equipment, devices, and/or consumables through CapEx models are shifting to deliver outcomes via “as-a-Service” models to gain a significant competitive advantage.
Given the large XaaS leaps that Chasers and Followers expect to make over the next five years (figure 4), they would do well to emulate Frontrunner behaviors. If they don’t, they risk falling further behind in converting as-a-service adoption into competitive advantage. It may come as no surprise, then, that Frontrunners already run more of their enterprise IT as-a-service than others.
The agility offered by XaaS can help companies by virtualizing platforms, people, and processes, thus increasing profitability. The revolutionary ‘pay-as-you-go’ model offered by XaaS is much more suited for the ever-changing market needs, especially those arising due to the ongoing pandemic. Finally, the rapid increase in the global adoption of cloud computing and high-speed internet, combined with consumers who are more informed than ever before, makes XaaS solutions ideal for the future of business operations. With XaaS, businesses can cut costs by purchasing services from providers on a subscription basis. Before XaaS and cloud services, businesses had to buy individual products—software, hardware, servers, security, infrastructure—install them on site, and then link everything together to create networks. Now, with XaaS, businesses simply buy what they need, and pay as they go.
While the pandemic has accelerated XaaS adoption, it’s likely that service-based technologies are here to stay. Companies were shifting to as-a-service IT even before the pandemic boosted the value of flexibility, and the second Deloitte Everything-as-a-Service (XaaS) Study shows adopters increasingly prizing the XaaS model. Types of XaaS Deloitte Insights and our research centers deliver proprietary research designed to help organizations turn their aspirations into action. Once solutions are running and integrated, adopters shift their focus to managing and maintaining them, effectively keeping XaaS costs in check, and measuring business returns.
A XaaS platform eliminates the need to worry about building out extensive on-premise storage, web services, hardware, or custom software. More businesses are turning to XaaS to power and grow their enterprises. The global XaaS market is currently growing at a compound annual growth rate of around 26%, and experts predict this trend to continue until at least 2025. Luckily, as many companies found out, XaaS models provided all these advantages and more. Simply put, enterprises began to realize the value proposition of XaaS during this period of disruption, instability, and uncertainty. As digital transformation speeds up and we move to increased levels of automation, there may also be some issues with integration – especially if your business is working across more than one cloud service.