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Anything-as-a-Service (XaaS) and What It Means For Today’s Business

May 18th, 2018

The Anything-as-a-Service (XaaS) model that has risen from the shift towards cloud computing has transformed not just technology, but business as a whole. In this article we cover what it is, the impact on modern business, and what to beware of.

What is XaaS?

XaaS – or Anything-as-a-Service -- is the catch-all term to address the vast number of tools, products and technologies that are now delivered directly to users over an online network.  It marks the shift from individual local ownership of the product/tool/service to the centralized distribution of it on a subscription or rental basis by a third-party provider.

CD LibraryPerhaps the best analogy – for those old enough to remember this! – is that it used to be that when you wanted to listen to the latest album by your favorite artist, you went out and bought the CD. 

It didn’t matter if you really only liked and listened to 2 songs either – you still had to buy the whole thing in order to get what you wanted.

You then owned that piece of hardware (the CD).  If it got lost, or scratched or broken and didn’t work anymore, you were responsible for replacing it. 

You were also responsible for storing it, which often meant investing in CD racks or binders.  And when you wanted to listen to it, you had to have that one local copy in your physical possession, as well as a CD player.

Enter the as-a-Service model, which has certainly impacted how and where we get our music.

Now, there are a variety of XaaS options that allow you to instantly purchase and download just individual songs, or you can pay a monthly fee to a subscription service like Spotify, where you can listen to whatever you’d like 24/7, from any location.

The result? Instead of going out and purchasing the hardware – the physical CD – we sign up with a third-party provider to deliver the same product (the music) to us over the internet. 

Not only do you pay less and have on-demand access to much, much more than you could afford if you had to buy each one individually, but you are no longer responsible for locally storing, organizing and maintaining a huge library of CD’s and a CD player.

Just replace common business tools and hardware – like Microsoft Office licenses or your email server – with that CD analogy and you can see how the exact same shift has occurred within the business world.

Now instead of buying an individual Microsoft Office license for every person in your office (which usually leads to a major problem with version control), you can go with Office 365 - the cloud-based version - and add/remove users as needed.  With this solution, every user has the same version, the vendor (Microsoft) automatically pushes out the updates so it reduces the maintenance needed, and there is no need to buy the software outright.

Examples of XaaS in the technology space are endless, but within the cloud computing model there are generally 3 categories:

  • Software as a Service (SaaS) – examples: Microsoft O365, Google Apps, Dropbox, GoToMeeting
  • Platform as a Service (PaaS) - Google App Engine
  • Infrastructure as a Service (IaaS) – examples: AWS, Microsoft Azure

The XaaS model helps to simplify IT deployments and has become an attractive alternative to legacy systems for businesses striving to keep up with the rapidly changing IT landscape.

Benefits of XaaS for Business

A core benefit of the XaaS model is that it allows a business to invest in business strategy in lieu of infrastructure and maintenance.  Some specific advantages of this model include:

Shed Your Infrastructure

server-3297974_640With XaaS, businesses have the option of transitioning to the cloud for just about everything that once required an investment in on-premise hardware. 

There are now virtual servers, cloud-based communications systems (VoIP) and SaaS tools covering virtually everything from accounting software, to inventory management, to traditional office productivity tools that can replace the traditional hardware and software licensing options.

The less on-premise equipment there is, the less there is to store (and power and cool), maintain and eventually replace.  This means less physical overhead, and allows the business to shift from capital expenses to operational expenses.

Cut Costs

cost-2983238_640By choosing XaaS options over the traditional methods of building your infrastructure, network and applications, you eliminate the upfront investment in pricey hardware or software licenses.

With most of these providers, you only pay for what you need, and can typically add or drop licenses, or change your plan level immediately.  Subscriptions are usually available on a monthly basis, though they will generally have marginally higher costs per user than what you get with an annual plan.

As noted above, there is also the cost-savings associated with the overhead, as well as the maintenance that is required for on-premise hardware.

You are effectively shifting from buying the hardware and tools outright, to renting them from a third-party provider who takes on the responsibility of maintaining and securing them.  As a result you shift from a large upfront expenditure to a pay-as-you-go model.

Compete

make things happenXaaS has huge benefits for small and medium businesses in that this model gives them access to tools and technology innovations that were once cost-prohibitive and therefore the domain of enterprise businesses only.

Going back to our music analogy: It’s the difference between building your music library one expensive CD at a time, and paying a flat fee to subscribe to a service that gives you access to a library that is the same size as everyone else’s – even your music-loving, billionaire best friend.

This model effectively levels the playing field, opening up the opportunity for businesses of any size to take advantage of the latest and greatest innovative tools. 

The net effect of this new XaaS world is that even a smaller business can leverage those modern applications and platforms, helping to build efficient processes, gather analytics and develop a customized experience for its customer base.

Stay Agile, Flexible

agile and flexibleXaaS allows a company to change on-demand, adapting quickly to both new technologies, and the changing needs of their customers.  If you find that a service isn’t working for you anymore, or that a new service is required to stay competitive, you can generally pretty easily implement those changes.

Legacy systems don’t provide this flexibility and just aren’t nimble enough to scale up or down as quickly as XaaS options.

XaaS also supports a mobile workforce.  Because everything is in the cloud and accessible 24/7, your team members can also work anytime, from anywhere using these tools and services. 

This is a major benefit for disaster recovery too, as it provides that critical Plan B should your physical office location be inaccessible for any reason.

What to Be Aware Of

While there is a lot to like about the XaaS model, it’s not perfect and there are some things to be aware of if you are choosing to transition over to these cloud-based services.

Security and compliancy are the chief concerns around these services, but the reliability of the provider you choose is another one. 

It’s also easy (and tempting) to jump on every new thing that comes along, ultimately creating a tangle of technology or business services that don’t work well together and potentially create more inefficiencies and problems than they were meant to solve.

And while implementing XaaS solutions does shift many aspects of your IT infrastructure, it doesn't mean that IT management is no longer required.  These solutions still need to be properly configured, monitored and managed.

Our recommendation to any business looking to adopt more XaaS services is to work with a reputable, experienced IT provider to create a comprehensive strategy.  Start with understanding what the real business need is, then vet possible XaaS vendors and solutions thoroughly. 

Your IT partner can help you to ask the right questions around security, redundancy, compliancy, maintenance and support, so that you can confidently choose the XaaS services that are right for you and your budget.

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