XaaS stands for Everything as a Service or Anything as a Service. The concepts of SaaS, PaaS, or IaaS are already familiar. However, there are many more acronyms referring to this type of solutions. Examples include STaaS, CCaaS, MaaS, DRaaS, DBaaS, DaaS, NaaS, UCaaS, BPaaS, and BaaS. It is worth taking a look at XaaS to better understand how the “as-a-Service” model meets the needs of modern businesses and why it continues to gain popularity.
What exactly is XaaS?
Anything- or Everything as a Service (XaaS) is a general category of cloud computing and remote access services. It is therefore an umbrella term referring to the growing number of services and tools delivered through the cloud and the ability to combine them into a single offering.
There are countless examples of the services mentioned. The most common are:
- Workplace as a Service (WaaS): With WaaS, purchasing, delivery, customer service, security, maintenance, and upgrades become easier for resellers. Hardware can arrive at the end customer fully configured and ready to use. Software, on the other hand, will be conveniently delivered via the cloud.
- Infrastructure as a Service (IaaS): This offers users the typical components of a data center infrastructure such as hardware, computing performance, storage or network resources via the cloud.
- Platform as a Service (PaaS): a complete cloud-based development and deployment environment, giving you access to the resources you need to deploy a wide variety of solutions.
- Software as a Service (SaaS): This involves licensing software on a subscription basis and delivering it over the Internet.
In addition to being an umbrella term, Everything as a Service can also refer to a variety of offerings based on the “as-a-Service” model and combining them with services and hardware into a single offering for the customer.
Why is the “as-a-Service” model so popular?
Before the rise of the as-a-service model, we had only one choice: acquiring multiple, stand-alone solutions, bought from different vendors. This option often proved to be extremely expensive and inefficient. Why? Because although different systems work great separately, they don't necessarily work well in combination.
There are many factors influencing the popularity of the as-a-Service model and we are not able to analyze them all in one article, but let's focus on two of them.
We should pay attention to the recent development of technology and how we use different services. Millennials have grown up in the era of rapid Internet development and have become accustomed to using services from companies such as Uber, Airbnb, and Netflix. What do they have in common? Uber does not own taxis, Airbnb does not own flats, and Netflix does not own a single cinema. Digital disruption has been with millennials for a long time, and they are the ones starting to take over decision-making positions in companies. At the same time, they stop seeing the value in owning technology.
Buying every piece of hard- and software means that companies have to invest a relatively high amount of money up front into equipment, which they could utilize much better in areas like R&D, marketing or others, especially if they are startups. With the “as-a-Service” model there is no major investment upfront, and it is much easier to up- or downsize the IT environment, depending on the respective needs of the business.
“As-a-Service” models are not a new concept at all. Companies have always been looking for ways to reduce hosting fees and eliminate server management. But the rise of cloud computing and IoT enabled us to fully embrace the “as-a-Service” concept.
Benefits of XaaS
The main benefits of the XaaS solution for end customers are:
- Efficiency: The XaaS model displaces the traditional on-premise model. This is also due to better product development prospects (e.g. for technology startups). “As-a-Service” solutions are convenient and reliable, making the development process more efficient.
- Cost savings: The financial benefits for companies using the as-a-service model are another important factor. Distributed costs and subscription-based cash flows are in many cases much more cost-effective. Cloud services also allow organisations to get rid of much of their internal physical IT infrastructure. Fewer servers, hard drives and other hardware, in turn, means lower costs related to maintenance, space, cooling, and power, for example.
- Scalability: For startups, flexibility and scalability must go hand in hand with adaptation to external factors. XaaS solutions allow businesses to quickly change the package and add new components to it. What does this mean? The opportunity to experiment in a safe environment.
- Access to the best services: With XaaS, even the smallest companies and startups can gain access to top-quality services that might be too expensive in the classic model.
- Increased return on investment: High performance combined with cost savings allows companies to get the best out of their IT setup.
- No risk of outdated systems: Updating software and services is the responsibility of providers. This makes lifecycle management of a given setup simpler and cheaper, while the company gets access to the latest versions and updates.
- Security: Service providers take responsibility for encryption or data storage. At the same time, the Cybersecurity-as-a-Service model equips companies with the latest solutions to detect any threats. These are increasingly based on Artificial Intelligence.
XaaS as a revenue driver for MSPs
At the end, it is also worth mentioning the opportunities for MSPs arising from the growing XaaS market, which is opening up new revenue streams.
Demand for cloud solutions and services continues to grow. The pandemic has accelerated this process and increased demand as it has led to a distributed workforce and remote working. Many companies have found that XaaS services could be the solution. Every modern MSP should be responding to these market demands by providing their customers with what they need most, while increasing their own profits.
For MSPs, this means growth opportunities, opening up additional sources of recurring revenue,increasing company valuation, and building closer and ongoing relationships with customers and suppliers. XaaS also means higher profit through high-margin services and lower service delivery costs,thanks to standardisation.
According to Gartner, global spending on cloud services reaches over $304.9 billion in 2021 and $362 billion in 2022.
These figures show that with XaaS and a strong customer base, MSPs will be able to build their position as trusted IT advisors.
