Everything as a Service (XaaS)
What is “XaaS – Everything as a Service”?
In mathematics, the letter “X” is the most important unknown, as infinitely different meanings can be ascribed to it. And following exactly this logic, the “X” is used in XaaS, as everything can be offered “as a service”. The definition of the term refers to the new stage of digital transformation, which offers an unlimited universe of possibilities and solutions in the world of cloud computing with Everything as a Service models.
The cloud, simply put, is the entire internet environment where all the information on the network resides. Instead of physical hardware to hold the data and programmes, the network becomes a virtual space to provide these services. The concept has revolutionised the way companies consume technology because it has drastically reduced the day-to-day effort and cost of maintaining and managing information, software and services. This outsourced solution from a company’s IT department is an increasingly popular solution as it offers a number of benefits.
Cloud Computing and the XaaS Evolution
Cloud computing has long become mainstream, with most companies using Infrastructure as a Service (IaaS), Software as a Service (SaaS) or Platform as a Service (PaaS) as part of their IT portfolio. But cloud services have also been expanded to include Desktop as a Service (DaaS), Storage as a-Service (STaaS), Container as a Service (CaaS) and more.
In IoT (Internet of Things) and Industrial IoT, these as-a-service solutions are also becoming increasingly popular. With Equipment as a Service or Product as a Service, machines, equipment and products of any kind are offered as a service for a certain period of time, including maintenance, repair etc. and thus offers companies the option of no longer buying machines but renting or subscribing to their use (Capex to Opex model).
In addition, there is Everything as a Service (XaaS), also sometimes called Anything-as-a-Service, in which every IT functionality can be mapped into a service. Strictly speaking, XaaS includes any internet service from software to platform to infrastructure that is provided online and paid for in a flexible usage model rather than as an initial purchase or one-off licence.
XaaS and the Subscription Business
Everything as a Service refers to products and services that can be purchased in a “pay as you go” model based on a subscription deal. Companies that want to keep up with customer demands while increasing profitability welcome the transformation to the XaaS business model, which is designed to help customers achieve specific business outcomes. If a company’s business model is also supported by a customer retention model that drives adoption, expansion and renewal of customer contracts, XaaS can become a real growth driver for the subscription business, whether in the guise of IaaS, SaaS, PaaS or other forms of the “as a service” model.
Everything as a service: What are the advantages of XaaS models?
The XaaS model guarantees several advantages, both for entrepreneurs and for customers who need these solutions:
- Geographical freedom: In a globalised world, geographical borders are no longer decisive. But even with the freedom that an XaaS offers, the company has to take local conditions into account. Unsurprisingly, the XaaS world also has solutions for this.
- Growing market: Undoubtedly, this is the great opportunity for small and medium-sized enterprises that previously could not compete with the giants of the market. So, by finding the niche of Everything as a Service, it is possible to find solutions that are compatible with the market and solve specific problems of the customers.
- Lower costs for users: Offering cloud computing products, applications and services is much more attractive from a customer budget perspective. Previously, the entire installation and IT support involved significant costs. Today, the cost of deployment and support is much lower once the contract is signed. And this advantage is passed on to the users without reducing the company’s profit.
- Scalability: Adapting subscription rates to customer needs is another point to highlight in the benefits of XaaS. It is easier to offer customers exactly what they need and to increase the scalability of the product as an everything as a service offering (data to cash).
- Customer loyalty: With the possibility to better find out through information and usage data what the customer might need at a certain point in time, upgrades or additional products can be recommended. Potential churn (churn) can also be recognised in time and counteracted, e.g. through downgrades or special offers.
- Plannable revenue: This point is directly related to the world of MRR economics (Monthly Recurring Revenue). Since the contracts with the customers have fixed terms and recurring invoices (monthly or over longer periods) are possible, the expected turnover is much easier to plan and reliable. However, it is important to have a partner who offers this subscription management and recurring billing and payments in the most complete and automated way possible.
Conclusion: Everything as a Service as a flexible and inexpensive future model for companies
The term XaaS can be understood as virtually any activity that was performed locally over a physical infrastructure and can now be purchased as an offering through a cloud service provider. Increasingly, organisations are using robust and secure cloud computing technology to reduce costs by moving internal activities to virtual servers. Today, increasing bandwidth means that XaaS can be well integrated into the operations of all types of businesses, greatly improving both the IT department and end-user experience and thereby reducing costs.