23 July 2020

When I started looking for industry luminaries to enlighten me about XaaS, the refrain from many public relations and marketing officials was almost identical, as if they weren’t quite ready for the call. My questions were answered with questions, usually in the form of “can you give me a bit more information”? In other words, XaaS means different things to different people, even though it isn’t new to  the party. The ‘X’ can mean either anything or everything can be purchased on an “as needed” basis and the main pillars are…well, it depends on what you want.

Renat Zubairov, CEO and co-founder, elastic.io, says that despite the fact the everything/anything-as-a-Service (XaaS) has been around for a number of years now, 2019 was the year when, according to Gartner, everything-as-a-Service (XaaS) went mainstream and got everyone talking.

“With a growing commitment towards digital transformation, the XaaS revolution is more than just a new channel trend,” he says. “It came as a fundamental response to the increasingly complex demands of the integrated enterprise. It is reinventing the IT infrastructure, turning it into an environment where computing, software, networks, servers and more are bought, rather than built, into the computing infrastructure.”

When it comes to the main pillars, Zubairov says the general definition encompasses SaaS, PaaS and IaaS – but it can also be much broader than that. “Ultimately, it all boils down to the self-service aspect,” he continues. “Companies increasingly realise that they cannot – or in fact, don’t want to – bear the full responsibility of a product. There are simply not enough resources for that. What matters is the product experience, which include service, and the outcome. Both companies and XaaS providers need, therefore, pay a special attention to whether the customers’ ultimate needs are well understood and reflected in SLA, whether customer support delivers a superb performance, and regularly review whether the product still delivers the value promised.”

Chris Conry, CIO at Fuze, a cloud communications and collaboration software platform designed for the enterprise, says XaaS offers businesses the opportunity to save money, boost productivity and provide flexibility. “The main pillars when businesses decide to consider, for example, unified communications as a service (UCaaS) include costs, flexibility, simplicity and mobility,” he says.

For many, the main driving force behind the growth of infrastructure as a service is the trend away from a more traditional CAPEX model, typically with hardware and software on premise, to an OPEX model which can bring massive cost savings and is a much more flexible and dynamic method of consuming products.

Alex Grant, director of Pod, a unified communications platform developed by 24 Seven Cloud says he subscribes to that theory.

“When considering deploying a XaaS platform vs traditional on-prem equipment and services, it is worth considering how well the platform can scale in terms of features and size,” he adds. “For example, can it support a growing business and is the upgrade path easy and trouble free?”

One thing we can all agree on then is XaaS is a general, collective term that refers to the delivery of anything as a service. It takes the pressure off businesses doing everything in-house.

Now that we have a better idea as to what XaaS is, why do enterprises need it? It’s the old do-it-yourself v bring in a professional argument.

Prima facie, only a handful of the biggest players across every industry can afford to do everything in-house. However, for the rest it’s about reducing cost, risk and complexity.  With that in mind, the “pay as you go” model also provides the flexibility to pivot and react to emerging market demands.

“The XaaS model provides access to an almost unlimited bank of resource when it is needed – New Year, Black Friday sales, university holidays or other seasonal peaks – without it standing idle at other times,” adds Zubairov. “Its flexibility is equally well recognised for addressing expectations of more and faster services.” 

Dominik Birgelen, CEO and co-Founder of Oneclick AG is of the opinion that the flexibility of XaaS, along with its simple deployment and ability to increase workforce efficiency, means that it could be an extremely important asset for a business. “Everything-as-a-Service helps companies innovate faster, transform digitally, gain access to cutting-edge technologies and succeed in global competition,” he says. “According to Deloitte, companies that use three-quarters of corporate IT as a service save an average of 67% of their operating costs. What’s more, efficiency is increased by making systems and applications available faster.”

Conry argues that when a business uses several different applications for communication and collaboration, they need to consider both initial expenses and maintenance costs. “The more moving pieces (i.e. solutions and providers) a business has in its technology stack, the more cost that is incurred,” he adds. “Each piece has its own licensing terms and non-bundled pricing, demands unique on-going IT support, integration and care, requires end user training and adoption, and carries a heightened back office overhead burden from legal, security and finance.”

It has also been said that UCaaS will help reduce those expenses as cloud-based solutions don’t require on-premises equipment. This translates into a reduced IT data centre footprint and elimination of maintenance concerns associated with the communications gear and dependent systems, according to Conry.

“Cloud-based unified communications is built upon a service provider’s global infrastructure of data centres connected to the internet,” he says. “For the CIO, that means no upfront capital investments and economies of scale that can reduce unit carrier costs (e.g. per phone). The provider’s multiple data-centres can provide on-demand scalability and built-in redundancy to ensure business continuity. Services can be fast (low latency), reliable, and in many cases more secure than those patchwork systems they are replacing.”

What’s more, by choosing to go with a UCaaS vendor, Conry says updates and platform revisions will be managed and driven by that provider, freeing up the IT team’s time to focus on other strategic initiatives in support of broader business goals. IT can align faster and better with line of businesses and play a bigger role in the digital transformation of their organisation.

It also makes some sense dealing with one vendor as the CIO signs up to a simple billing process, consolidated across geographies and different services. One provider – a global carrier – for all communications: voice, text, video, etc.

“On-premises UC might not provide the flexibility that businesses require,” adds Conry. “With UCaaS, businesses can be more selective about the features and functions they choose to deploy and pay for, creating a customised platform that only has the tools they need. If a business isn’t going to leverage collaboration functions, as an example, they don’t have to pay for it. Now more than ever, workers require the flexibility to work from anywhere. Because there is no hardware, UCaaS gives workers the mobility they want. Software can be installed on any device, from smartphones to computers, and the cloud lets employees access files from anywhere.”

In our current or what will soon be our “new normal”, all organisations will need to consider their current telecoms operations and IT infrastructure to increase productivity, reduce superfluous costs and safeguard for the future

In our current or what will soon be our “new normal”, all organisations will need to consider their current telecoms operations and IT infrastructure to increase productivity, reduce superfluous costs and safeguard for the future. “The current climate has forced millions of businesses across the world to adapt to a new way of working. For many, this has meant abandoning offices and working remotely leaving existing telecoms services and hardware redundant and costly,” says Grant.

XaaS is clearly a big world and so enterprises, IT managers and their teams need to be ready for the challenges that await them. Zubairov says in the digitally-transformed enterprise, the biggest challenge for IT managers lies in is the complexity of integrating a growing number of SaaS subscriptions into the IT infrastructure.

“Preventing data silos from emerging in each operational business unit and achieving an integrated and interoperable IT infrastructure becomes exponentially challenging with the addition of each individual software application as it requires not just one but a series of bespoke API connections and the number of connections grows more than proportionally with multiple systems,” he continues. “This means that maintenance of the infrastructure becomes an enormous challenge, without even considering growth and upgrade.”

Zubairov also has some tips when it comes to choosing a supplier. He says research shows that companies are increasingly selecting technologies for their integration capability as much as their breadth of functionality. “It is clear that the solution should be able to address most, if not all, business requirements, but how well does it integrate with the existing IT infrastructure?” he adds. “Choosing a solution that offers built-in integration capabilities will not only save the company the integration headache, time, and resources but also power up key business processes like marketing, sales, customer service, to name a few.”

Birgelen says enterprises should look for a provider that offers complete end-to-end support and management of the solution. “IT managers have a busy job and their time is best spent using their expertise to further develop the organisation’s own IT strategy, rather than on the implementation and maintenance of resources,” he adds.

As far as Grant is concerned, the key is to choose a vendor with a suite of products which are designed from the ground up to work together. “All too often service providers pick and choose components from different suppliers with varying success,” he says. “This sometimes results in a disjointed end user experience, with wildly different user interfaces to learn and support.”

It can be difficult for business leaders to identify the ideal service. While price may stand out as a differentiator, it is not the only one factor that IT leaders should consider, adds Conry. He says it is important for businesses to look for XaaS vendors that can and will modify their offerings to meet individual client requirements. “This flexibility should account for specific features, integration with existing IT infrastructure and more,” Conry adds. “Alternatives should be fully vetted from a security perspective. Security and data privacy requirements are extremely important when it comes to any cloud service. Unauthorised access or mishandling of information could have a significant negative impact on an organisation. Providers should be evaluated on their compliance with security best practices, industry standards, and regulatory requirements. The speed and degree to which vendors are able to answer these questions and provide independent attestation of their compliance is a good indicator of their overall operational effectiveness, and ultimately provide a measure of trust.”

What’s more, Conry says reputation around service delivery is also very important. “After all, a XaaS solution is only valuable if it lives up to its promise, and the best way to guarantee that this will be the case is by partnering with a vendor that has a reputation for meeting expectations and delivering high-quality service and support,” he adds. “In addition to looking at reviews and other widely available feedback regarding a XaaS vendor’s performance, business leaders should also ask potential service providers to offer references that can provide insight into their own experiences of implementing and leveraging these solutions.”

He says, “one final, critical factor to take into account” is the cloud system’s analytics capabilities. High-end analytics are essential for determining how the technology is actually being used by employees throughout the company. “A XaaS system that lacks analytics will likely lead to inefficiencies and missed opportunities, which undermines the value of the company’s investment,” he adds.

Luckily, any sector can benefit from the XaaS revolution whether the business is in the retail, manufacturing, telecommunications, technology, or any other industry. “The great power of XaaS is that it is industry and sector agnostic,” Zubairov adds. “The XaaS offer has been continuously growing and addressing a wide range of business needs and any company can use it to harness the full potential of digital transformation strategy.”

Of course, when it comes to the hiring of anything, it comes with a recurring fee. Zubairov says as the term XaaS covers a broad range of various products and services, the criteria on which recurring fees are based varies greatly. “What is common to recurring fees of, safe to say, the absolute majority of XaaS is the inclusion of future updates and upgrades. Other common ‘items’ include – but are not limited to – maintenance and support, hosting, analytics, content updates, to name but a few,” he says.

Nevertheless, James Maynard, solutions director at UKCloud, says that historically, the private sector has pioneered XaaS, as businesses have had more budget and freedom to trial it within their organisations – “and all industries benefit” from the remote collaboration that XaaS enables. “However, public sector bodies benefit hugely from XaaS, given the nature of their work and time-poor employees,” he adds. “Public sector organisations have grown organically meaning they typically have very broad estates with dispersed tooling and complexities, the value of managed services mean those IT hygiene factors can be outsourced from patching through to network monitoring enabling those organisations to improve their time to value in the digital space. Take the NHS: health tech has been largely driven by cloud technology in the past few years, such as remote GP consultations. Reducing some of the pressure of navigating the software or infrastructure itself is such an important part of managed services.”

As far as Conry is concerned, for any application as a service, the buyer will not be expected to pay for storage, systems equipment, network infrastructure, redundancy and disaster recovery measures, or the administrative burden required to patch and update the solution. “The subscription cost of XaaS will include all of these responsibilities that traditionally fall on enterprise IT for on-premises technology,” he continues. “Buyers of XaaS generally need only worry about subscription cost, any implementation services associated with the initial solution deployment and any desired integration with the existing technology stack, and training for end users and administrators.”

Arguing against XaaS would be like explaining to a millennial why you still use DVDs or pay for a landline. You won’t win the argument, regardless of how cogent an argument you possess.

For one, XaaS provides consistent pricing models which make it easier to plan ahead. The “pay as you go” model also provides the flexibility to pivot and follow emerging market demands on a whim.

Still, trusting in a third party to take responsibility to effectively “run” your business is huge leap of faith. Yet steps of this magnitude are needed to accelerate the digital transformation of most organisations.

As we (hopefully) enter a post Covid world, things are going to look very different to how they were at the start of 2020. Will it change the enterprise approach to XaaS?

“Absolutely because we are facing three simultaneous types of uncertainty,” says Eran Brown CTO EMEA & APJ, Infinidat. “Public health uncertainty, which impacts the demand curves in unpredictable ways (though none of them is positive), financial uncertainty as more and more companies are cutting staff, using furloughs to keep cash available to stay afloat and operational uncertainty - the combination of supply shocks, demand shocks and credit shocks all make planning anything far from easy.  This is right from manufacturing and stock planning through to sales and revenue predictions.” Brown says the result is that organisations will need to keep their cash reserves for as long as possible; avoid making long term commitments and be able to change plans quickly.

“Companies that build their IT using more flexible consumption models will be able to do this on- premises and will avoid paying the XaaS ‘tax’, making them leaner and more likely to weather the storm,” he adds. “Companies that rely on the public cloud to achieve this, will increase their cloud spending and will see their IT budgets and cash reserves drain faster.”

 Birgelen says the adoption rate for XaaS will actually gain momentum and significantly shift forward. “After the crisis, it’s likely that many companies will tackle IT modernisation projects with a focus on finding solutions that help reduce costs, and this will lead to a huge digitalisation boom,” he adds. “CIOs will soon look to implement strategies that ensure business continuity while improving efficiency. They will use new technologies and solutions to automate processes while supporting IAM, security controls and a variety of devices including PCs, tablets and smartphones.” The choice is yours. n