Access Vs. Ownership: A Fundamental Consideration Of XaaS

The expansion of SaaS, PaaS and IaaS solutions continues to show strong growth. According to Gartner analysts, public cloud services are predicted to grow 21.7% in 2022. Although many drivers push businesses to search out and implement "as-a-service" solutions, the demand boils down to access versus ownership.

Subscription-based solutions can give you access to robust infrastructure, applications and analytics and are available anywhere you have a network connection. They can reduce the labor costs related to system maintenance, and capital expenses become easier-to-budget operating expenses. And if a service can provide security, availability and the features needed to support your application, there's logic in moving to a XaaS, or "anything-as-a-service," solution.

But, although XaaS solutions can offer many benefits, there's an emotional advantage in having something at your disposal, within arm’s reach, on your premises or private network. No matter how secure or bespoke the service is, there can be a nagging doubt that it may come up critically short. However, we're experiencing solutions that substitute access for ownership more and more in our everyday lives. That daily experience directly impacts our belief systems and how we feel about incorporating XaaS solutions in our homes and businesses.

XaaS Is About Access

Why own a video game when you can subscribe to a service and have access to hundreds of titles? Why own a car in a congested city when you could rent one as needed? I’m sure you’re considering the reasons you may prefer to own your vehicle. However, if a service can address your objections and give you the access you desire, you might consider the alternative.

Ask yourself, how many movies do you still purchase on disk after gaining access to a streaming service? The quality, selection and cost to stream the content and selection you desire typically outweigh the objections. It would cost a fortune to own every movie available to you on a streaming service. If you continue to get access to the shows you want, you'll likely continue to subscribe.

Subscription Models Can Democratize Access

Subscribing to a service provides access without the responsibility or cost of ownership. Consumers subscribing to a streaming service have access to a treasure trove of video content.

For a company, it can mean running business applications in the cloud to offload the maintenance and capital expenses related to infrastructure. Large enterprises can also benefit by reducing labor costs, and small businesses can gain access to powerful solutions at a price they can afford. This democratization helps remove barriers to innovation by reducing costs and improving the speed of deployment.

Metal rolls in line factory

Ownership Financial And Opportunity Costs

In a 2020 Deloitte Insights survey of 600 IT and line-of-business professionals, 450 (75%) of the respondents reported that as-a-service solutions exceeded 50% of their enterprise IT. This figure isn’t surprising when you consider the total cost of ownership.

For example, financial costs can include maintenance (support, software, hardware, software patching and firmware), hardware obsolescence (replacement and migration costs), data center power and cooling, disaster recovery solutions (testing and maintenance), monitoring and implementation. Opportunity costs could include a reduction in time and attention on customer experience efforts, the cannibalization of strategic IT budgets and lengthier cycles for upgrades, which can reduce competitiveness.

Ownership typically means having responsibility for the lifecycle of the equipment and the time that goes into every business plan, requirements document, budget, RFP and project needed to keep your platform running. Unloading these responsibilities can refocus your IT and line-of-business leadership on more strategic initiatives, such as improving business processes and the customer experience.

It's clear why SaaS, IaaS and PaaS solutions have enjoyed a boom over the last 20 years. Much of the low-lying fruit, as in opportunities to save using cloud services, has been picked. That’s not to say that these solutions won't continue to grow, but businesses and service providers are beginning to turn their eyes elsewhere. They're looking at "anything as a service."

Anything As A Service (XaaS)

From desktops and collaboration systems to key management and industrial maintenance, if a tool, service or technology can be monitored and managed in the cloud, it can become a XaaS solution. Businesses are considering operations outside the IT platform to gain the same benefits elsewhere.

The subscription model can afford businesses ubiquity across the enterprise and less strain on team resources. It can also be easier to budget. Consider collaboration systems for supporting the remote worker. Businesses worldwide are scrambling to enable hybrid offices and a return to the workplace. But according to the results of research conducted by Spiceworks Ziff Davis, 30% of the workforce is expected to remain fully remote after the pandemic.

Employees returning to the office are now experts at running a video conference. However, conference rooms are commonly outfitted with displays, connectivity and equipment that are difficult to use. Worse yet, company "huddle" rooms may have no collaboration system at all. Equipping conference rooms for remote collaboration can be a significant capital expense. Plus, the staff needs to be trained to use and maintain the equipment. For these reasons, conference room systems are ideal for the as-a-service model.

What Makes An Ideal XaaS?

There are several questions you should ask when considering a XaaS solution, including:

  1. Is internally delivering and supporting the service being considered for replacement a distraction to the core business?
  2. Is the service essential and can it provide great value?
  3. If equipment is needed, can it be managed, monitored and supported remotely?
  4. Is the cost to create or purchase the solution prohibitive?
  5. Can training staff to use the service be performed remotely?

Access Vs. Ownership

It's said that a boat owner’s best day is the day they buy their boat and their second-best day is the day they sell it. Perhaps they would have a better day yet if they rented the boat. Ownership can come with a lot of baggage. Unless a service is core to your business and hypersensitive to your and your customers’ security, an as-a-service option could be viable.

This article was originally published on March 7, 2022 on Reprinted with permission of the publisher.

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Bill Geary
Bill became Wesco's Executive Vice President and General Manager – Communications and Security Solutions in July 2020, following Anixter’s merger with Wesco. Prior to this, he served as executive vice president of the Network & Security Solutions segment for Anixter since July 2017.