Anything as a Service is a natural evolution of the cloud, but where do we go next?

Businesses and consumers are inexorably moving to cloud computing, and many are already cloud-native. The company’s emphasis on leaner, more agile operations started years ago with this trend. Fewer companies are building their own data centers. Hyperscalers and other cloud computing giants are filling the gap. The cloud itself can be public, private or hybrid, but essentially cloud computing is central to innovation in enterprise IT and software development. And it’s here to stay.

Everything as a Service, or XaaS, is part of that trend and is a natural consequence of the evolution of cloud computing. Service platforms built on cloud computing infrastructure help businesses scale and adapt faster than ever before. “Anything as a Service” opens up a new landscape of opportunity as more customers migrate to 5G.

The subscription-consumption model at the heart of XaaS holds tremendous promise for entrepreneurs looking to start innovative businesses without huge capital investments. Many companies are already seeing significant savings.

The COVID-19 pandemic and the tectonic shift of a skilled workforce to a hybrid workplace have helped accelerate the XaaS trend. The emergence of service platforms provides a way for companies to deal with hybrid work issues to support their employees. Perhaps just as importantly, it allows businesses not only to scale up services when they need additional capacity, but also to scale down services to respond to changing capacity needs.

According to Gartner, end-user spending on public cloud services was $332 billion in 2021. $122.6 billion was spent on Software as a Service offerings: platforms like Salesforce and SAP, or Adobe Creative Cloud and Microsoft Office 365. $82 billion spent on Infrastructure as a Service (IaaS), which provides cloud-centric businesses the core services that they need. need to scale in the cloud. Another $59.4 billion was spent on Platforms as a Service (PaaS), which provide a richer set of tools for businesses to deploy custom cloud applications. Gartner also predicts that these three segments will see the most growth in the coming years as more and more companies are forced to use the Internet.

One size may not fit all, but will fit most

XaaS also holds the promise of new revenue streams and growth opportunities for Communication Service Providers (CSPs) as they move to 5G. 5G provides a borderless runway for innovation and iteration for companies adapting to cloud-centric methodologies that focus on DevOps and other operational and management processes and systems that emphasize constant app deployment and iteration.

Everything as a service also has some drawbacks. Some of these are issues that enterprises have struggled with for years, such as reliance on a single supplier or technology dead-end. Depending on the cloud, this means additional security requirements, backup and service outage mitigation strategies. Data sovereignty and data privacy are paramount. And while XaaS holds the promise of a lower cost of capital for businesses, it’s still a consumption model. Hidden fees and licensing fees can add huge costs to businesses, potentially limiting profitability and growth.

XaaS is not a panacea for all corporate capital concerns, nor is it a one-size-fits-all solution. But it may be the most appropriate solution guiding the evolution of cloud computing in the coming years as businesses continue to reinvent themselves around the cloud.

The cloud is not appropriate or necessary for every business or business process. But most companies looking at XaaS now think the model gives them a competitive edge in bringing new products to market, and many view it as a strategic advantage. One thing is certain: it is growing and will continue to grow and evolve along with the rest of the cloud computing business.

This post Is XaaS the future of cloud computing?

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