Technological Trend: Everyone is Betting on XaaS

It seems too good to be true, but many technology companies are betting on XaaS (short for everything/anything as a service). According to a survey of global technology trends for this year conducted by the digital company Equinix, 71% of 2,900 leading IT professionals in the United States, Asia and the Pacific, Europe, the Middle East, and Africa are transitioning to XaaS, justifying this by simplifying IT infrastructure, adaptability, and improved user experience.

XaaS is a broad range of services related to cloud computing that can enhance agility, company growth, innovation, and security while reducing employee and technology-related costs. It could be said that outsourcing, in the full sense of the word, is a solution that enables data exchange and analysis.

For or Against

Equinix’s research shows that companies are accelerating digital investments as they open new markets and want to grow quickly, and XaaS is the most suitable way to do so. 65% expect to simplify IT infrastructure this way, 56% expect flexibility, and 54% believe it will provide a better user experience. Fortune Business Insights notes that the pandemic has spurred greater adoption of XaaS in e-commerce, healthcare, retail, manufacturing, and life sciences, with the global market for this solution valued at $436.82 billion last year, projected to reach $2,378.07 billion by 2029 with an annual growth rate of 23.4%.

However, the international consulting firm ITC Consulting believes that the transition to XaaS from services will be more expensive than it seems. It therefore urges companies to consider whether they can provide such services more cheaply themselves or let others do it while following trends. The website Cio.com, which tracks the IT industry, emphasizes that the cost issue when providing software services via the cloud depends on how much users utilize cloud services.

They illustrate this: local installations are more scalable than the cloud just as drinking at home is cheaper than at a café. Yet again, cloud services are more flexible, and unnecessary costs can be reduced, which requires additional effort for local services. This means that companies need to weigh carefully what they want to avoid surprises when cloud services come to bill, so Cio.com agrees that it may be mostly about the hype and the desire to follow trends rather than focusing on the company’s goals.      

Democratic XaaS

Despite this, Hewlett Packard Enterprise has introduced a new partnership program to support XaaS so that, as the company stated, it can find new markets and sources of revenue by choosing to use local software, the cloud, or a hybrid. XaaS services are also provided by other major technology companies such as Amazon Web Services, Cisco Systems, Google LLC, NEC, IBM, and Microsoft.

Forbes calls XaaS ‘democratization’ because it allows business applications to be launched in the cloud to relieve maintenance costs and capital infrastructure costs, overcoming barriers to innovation and accelerating implementation. Large companies further reduce labor costs, while small ones access powerful solutions at affordable prices.

Forbes understands why software as a service (software as a service – SaaS), platform as a service (platform as a service –PaaS) and infrastructure as a service (infrastructure as a service –IaaS) have flourished over the past twenty years. The savings from using cloud services are evident, the use of SaaS, PaaS, and IaaS will continue, but it is clear that the time for XaaS is also coming. If a tool, service, or technology can be monitored and managed in the cloud, it can become an XaaS solution.

In deciding to use it, Forbes recommends considering whether the service is necessary, what it can improve, and whether the costs of developing or purchasing the solution are high. If equipment is needed, it is important to know whether it can be managed, monitored, and supported remotely, and whether it can be trained for remote service use. XaaS is a good solution if the service is not critical to the business and the security of the company and its clients. Ownership of such a service includes, for example, maintenance of equipment and platforms and the necessary budget, and freeing oneself from these responsibilities allows for more focus on strategic initiatives such as improving business processes and user experience.

Everyone Happy

XaaS is a general, common term that refers to the delivery of anything as a service, says Drago Bratko, director of the Čakovec company Softwise, recognizing the vast number of products, tools, and technologies that suppliers deliver to users as a service over the network, usually the internet, instead of providing them locally or on-site, in the company. There are countless examples of XaaS, he explains, but the most common encompass three general models of cloud computing: SaaS, PaaS, and IaaS.

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—– The pandemic has positively impacted XaaS in various industries, such as healthcare, e-commerce, retail, banking, and finance. The spread of the coronavirus forced a large portion of employees to work from home. Companies began to realize the advantages of managing costs according to their demands for improving business agility and increasing operational efficiency. The information technology industry recognized this trend and offered quality solutions to its end users within the framework of XaaS.

Users thus receive a service that is always available, with no compromises in any sense, while the IT industry provides tools for easier delivery of its products and services. A software development company, for example, does not have to worry about infrastructure; the IaaS provider takes care of that. Organizations often choose XaaS because the as-a-service model can reduce costs and simplify IT application. With each additional cloud service, the organization can discard parts of its internal IT infrastructure, reducing the number of servers, hard drives, network equipment, and software installations, Bratko states.

Who Benefits

Less local IT, he adds, means lower physical costs such as space for equipment, power, and cooling, which then means a reduction in IT staff or allows IT staff to focus on more important value-added projects for the business. Furthermore, in Bratko’s opinion, using an external service instead of local technology shifts many capital costs to operational business costs. Despite their advantages, Bratko says, XaaS solutions sometimes struggle with issues of resilience and internet reliability.

– XaaS operates on the internet, so due to its failures, it is prone to downtime. Various anomalies can hinder its full potential, from internet outages to bandwidth fluctuations. Some companies also want greater visibility into the environment and infrastructure of their service providers to better assess the state of the service and take a more active role. Additionally, a service provider that, when it ceases operations, is acquired, cancels a certain service, or changes the feature plan, can deeply affect XaaS users. It primarily simplifies infrastructure.

From that perspective, life is significantly simplified for system administrators as they can deploy and activate the necessary infrastructure much faster. XaaS infrastructure is maintained by professionals, and these experts enable new technologies and updates, ensuring high service quality. This helps infrastructure users achieve a better user experience, contributing to customer satisfaction and loyalty. Life is also simplified for developers, who can use other SaaS solutions to perform their daily tasks and integrate them into their applications. Finally, life is simplified for end users as they can access services and applications on the internet whenever they need them, Bratko asserts.

Always and Everywhere

Every technology has its drawbacks, and so does XaaS, Bratko is clear. Risks of data loss and security issues are some of the reasons why companies are hesitant to fully rely on cloud service providers. However, he says, technology companies are doing their best to help them transition their work environment to the cloud and address security issues. The XaaS model, he emphasizes, is mature enough and has been operational long enough to be recommended for operational use in a broad sense.

– If XaaS is applied correctly, among other benefits, it can significantly improve the user experience. The mere fact that the service is always available and accessible from anywhere enhances user satisfaction. At the same time, this model simplifies it for companies to redirect their IT resources to more valuable innovations and projects, digitally transforming them and making them more agile, democratizing innovation, and enabling users to access modern technology, Bratko is confident.