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The rise of XaaS economy

Started by devikad, May 04, 2021, 05:54 PM

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devikad

The rise of XaaS economy



With the emerging technologies and the amount of data that is being produced daily in this world, companies need a technology that can provide storage facilities, computing power, servers and other services. Cloud Computing comes into play here. It provides services such as analytics, database, computing power and intelligence over the internet.
These cloud-based applications cost less, as companies do not need to spend on maintenance, software or hardware and configuration. Cloud computing has seen a colossal evolution with services originating from Software-as-a-Service (SaaS) to Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS) and now Anything-as-a-Service (XaaS).

The adaptability of the cloud services resulted in the emergence of the XaaS model. It describes a general classification of services thatare offered by the cloud remotely. Due to its elasticity, XaaS provides companies with a range of solutions thatare customized according to their requirements and this can help the business choose the exact solution they want. The companies can install applications in the cloud for data storage, content management, communications, backend, etc.

It also provides a low-cost infrastructure for developing a new product. Enterprises do not need to spend millions of dollars on computing resources, licenses, infrastructure and hiring full-time employees for maintenance. This also allows businesses to drastically change their service models whenever they need.

One of the main goals of XaaS model is to convert one-time buyer into a subscriber of the service. As the user is only using the application he needs and is paying for only that service, his money is being put to good use and thus he would be more likely to continue this process.

Companies have found this model to be convenient and cost saving and so, they are moving their IT infrastructure and operations to the cloud, which marks the gradual increase in the adaptation of the XaaS model. As more and more companies are embracing digital transformation, XaaS is becoming more ubiquitous. It has been seen that companies, which have adopted this model are growing 5x faster than the others. In a recent survey, 71% of the enterprises have reported that XaaS now constitutes half of their company's IT.

It has also been seen that around 90% of the companies are using some service of this model. With the increasing adoption of cloud-based monitoring and demand for scalable storage facility, XaaS market is predicted to grow at a CAGR of 25% by 2027. It has been seen that Storage-as-a-Service, that comes under Anything-as-a-Service market,is the fastest growing service segment.

Industries such as Insurance, IT and Healthcare have been some of the companies which have received the benefits of the XaaS model. With the pandemic, the value of flexibility boosted and the IT enterprise thrived during this time with the use of cloud. COVID-19 fuelled the transition from traditional IT to XaaS and this transition shows no signs of slowing down. The elasticity of this model not only helped the industry survive in this current crisis but also helped them position themselves to flourish post pandemic.

It supported the companies by helping them create new solutions or business models for the new normal. In the pandemic, as everything was closing down and people were advised to work remotely, it was becoming hard for companies to provide the employees with onsite services and applications and so the cloud model became a necessity at that time. It also helped the employees who started working remotely by providing them with cloud-based tools for communicating and collaborating with other teams working remotely.

In the healthcare industry, medical treatment is becoming data driven and patient centric. With Hospital Information Systems and Electronic Medical Records, the healthcare industry is adopting the Healthcare-as-a-Service model. This model creates opportunities for almost all groups of people to receive a good medical treatment. These services include online consultation with doctors, lab sample collections from home, access to your medical records at any time, etc.

These services were necessary and helpful with the onset of the pandemic as it was risky to visit the hospital where you are more likely to be in contact with the virus. When the pandemic began, a healthcare system in Florida chose mobile-enabled cloud-based health system that could handle virtual screening of employee's health, remotely connect doctors with patients and virtually connect the patients with their family members.

Another industry that is also coming out the dark ages and adopting the XaaS model is Insurance. Insurance-as-a-Service is one of the digital transformations in the Insurance industry, which offers the clients with digital insurance that covers end-to-end requirements for claims management, customer support and simple onboarding. It provides the clients with fair, simple and transparent insurance and thus enables speed and flexibility in the process.
This model comes with a lot of advantages. It helps improve the expense model by helping the businesses cut down cost through subscription. Their previous capital expense now becomes operating expense. This model also allows companies to quickly adapt to new apps and services when the market condition changes. As the XaaS model can help streamline operations for the company, the IT resources can be put to use for innovation and higher-level projects.

It has also been observed that since companies have started adopting this model, the productivity has significantly improved and the backup & disaster planning has been more efficient. XaaS also solves the problem of cyber attacks by introducing the Cybersecurity-as-a-Service (CSaaS) model. In this model, cybersecurity partners work with companies and takes care of all the security needs like data encryption, risk assessment and cloud security.
Though every technology comes with a great set of facilities and benefits, there are some downsides for using this technology. As everything is on the cloud for this model, if the services go down due to low connectivity, the users won't be able to use them. Due to its accelerating growth, too many customers are using the same resources and this can cause the system to slow down.

Another drawback of this model is that the employees will have to learn this model,which might be a little complex and it becomes tedious to keep themselves current with the new and always changing technology. It also might become a little hard to troubleshoot when something goes wrong. Although this model comes with a set of downsides, the advantages of using this technology outweighs the disadvantages.

The rising need of companies and businesses to operate a wide array of IT services at a reasonable cost, the urge to shift all the operations to cloud based infrastructure and surging need for IT solutions like data centre and network capabilities like firewall and data security have given the needed boost to XaaS to flourish in this market. Covid pandemic accelerated this process of adoption of XaaS in companies as the model helped them in reducing costs and provided them with survive-and-thrive strategies amid a grim economic atmosphere.

This model is only expected to expand in the future due to the emerging technologies and the escalation of e-commerce market. It has been predicted that supply chain management, automated inspection tasks, Artificial Intelligence and Internet of Things (IoT) are moving cloud-wards and will gain momentum in the near future. Thus, companies that are unaware of this new technology need to start evaluating their XaaS options and begin implementing it in order to stay in the competition.

Source: https://cio.economictimes.indiatimes.com/news/corporate-news/the-rise-of-xaas-economy/82381140