Feature
At a time when generative AI (and the players surrounding it) continues to dominate the headlines, it can be easy to forget organizations are still struggling with digital transformation. Compounding the struggle are cutbacks in budgets, as costs can quickly add up for even the smallest of transformation projects. The emergence of XaaS (anything-as-a-service) in recent years may be one potential method of pushing forward digital transformation plans in lean times.
Digital Transformation Ain't a Done Deal
Digital transformation is the process of using digital technologies to change and improve business operations and overall business models.
You'd be forgiven for thinking companies were well on their way in digital transformation efforts given the pandemic-enforced boost, but on the contrary, Statista projects global investment in digital transformation will rise to to $2.51 trillion in 2024 from a confirmed $1.6 trillion spend in 2022. Digital transformation is clearly an ongoing process.
Given the breath of digital transformation, this comes as no surprise. Digital transformation reaches every corner of the workplace and includes:
- Technology Integration: Adopting and integrating new technologies such as cloud computing, artificial intelligence, machine learning, the internet of things (IoT) and data analytics among others.
- Data-driven decision making: Using data and analytics to make informed business decisions, gain insights and improve overall performance.
- Agile and collaborative: Embracing a culture that encourages innovation, collaborationand agility to adapt quickly to changing market conditions.
- Process optimization: Streamlining and automating business processes to enhance efficiency and reduce manual work.
All of this is within the narrowest definition of what constitutes a digital workplace. According to Deloitte, the digital workplace can best be considered as “the natural evolution of the workplace. Comprised of your employees’ technology working environment. The digital workplace encompasses all the technologies people use to get work done in today’s workplace .…”
Related Article: Beware These Common Digital Transformation Pitfalls
XaaS as an Enabler
The number of technologies that XaaS covers seems inexhaustible. Even generative AI is now being offered as a service.
XaaS includes a wide range of IT resources through the cloud which fall roughly into three categories: 1) infrastructure-as-a-service (IaaS) 2) platform-as-a-service (PaaS) 3) software as a service (SaaS). Other items on offer include database-as-a-service, storage-as-service and even marketing-as-a-service.
The push to as-a-service models is growing. In a January 2023 KPMG survey, 600 enterprises reported approximately 30% of their enterprise apps are now based on a SaaS model alone. These same firms expect over 40% of their enterprise apps to be based on SaaS by the end of 2024. Globally, this is a shift of trillions of IT dollars towards SaaS models.
XaaS Ushers in a 'New Era of Flexibility'
XaaS has created unprecedented possibilities in the workplace that were not possible even five years ago, Abdulla Basha, VP growth at Prezent said. Companies now have the power to create, expand and revolutionize the entire workspace, granting employees the freedom to work from any location.
“This transformative shift has redefined the boundaries of traditional workspaces, ushering in a new era of flexibility and accessibility,” Basha said.
SaaS products help companies streamline day-to-day operations by saving time and resources and allowing employees to focus more on core business activities, he continued. Similarly, PaaS software facilitates the creation of apps and software, giving companies the flexibility to own the platform completely.
XaaS models facilitated the emergence of a new work culture following the pandemic, he said. Desktop-as-a-service (DaaS) solutions enable users to manage and access work from their respective workspaces, replacing the need for businesses to build custom, localized desktops. Opting for an XaaS product license, instead of internal development, allows companies to benefit from a robust infrastructure while reducing costs, he added.
“Embracing the XaaS model enables businesses to streamline operations, cut costs, and harness scalable solutions, optimizing their workspace for enhanced efficiency,” Basha added. "Nevertheless, it does come with vulnerabilities like hacks, outages and hidden costs." He suggests firms do their due diligence to ensure right fit and support before committing to a service.
Related Article: Is Your Cloud Service Provider Trustworthy?
XaaS Delivers Agility and Scale
XaaS models are unlocking new levels of agility, scale and capability for digital workplaces, Marc Meyer, the chief commercial officer of Eli5, added. Rather than investing heavily upfront in technology, companies can now access sophisticated tools on-demand through the cloud, allowing them to quickly deploy new services and capabilities to their workforce.
Meyer points to a few ways it helps build digital workplaces, notably:
- Communications-as-a-Service delivers unified communications and collaboration tools that allow dispersed teams to connect and work together easily, eliminating legacy PBX systems.
- Identity-as-a-Service provides robust identity and access management from the cloud, which balances demands for security and convenient access to resources.
- AI-as-a-Service democratizes powerful AI capabilities, giving employees access to analytics, predictions conversational bots through pre-built APIs.
“The XaaS model allows small companies to access enterprise-grade tools that were out of reach before. For large companies, it provides more flexibility to scale tools up or down as needs evolve,” he said. ‘With the user experience so critical for productivity today, XaaS enables organizations to quickly deliver innovations that create more engaging and intelligent digital workplaces."
Get Ready for Some Hard Conversations
HFS Research's Joel Martin said XaaS comes down to this: it is all about realizing business outcomes with a service. When the service delivers ROI to the business, the willingness to use XaaS increases, thus providing new revenues. The success of the vendor’s product is tied to the value received versus the value anticipated.
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XaaS addresses several things for established and growing organizations: the ability to scale quickly, adapt to changing employee and customer needs, and pay for what you consume. Service vendors in turn are rewarded with monthly recurring revenues, allowing them access to capital to invest in their products and capabilities to increase the proposed value of their offering.
However XaaS can become very expensive if companies don't consider the provider's complete application, data and integration portfolio, he warned. Adopting XaaS in a piecemeal fashion is easier, using it to address immediate pain points. Problems arise however when organizations becomes locked into new contracts and just kick the can down the road.
“Get ready for hard discussions with business about 'why they need it?,' not 'what they need,'" Martin said. "The What and How must come after, not before everyone has agreed on the why and made the sacrifices on the fact that they might not get everything at once."