Is XaaS the Future Trend of Cloud Computing?

Anything as a Service is a natural evolution of the cloud, but what happens next?

Enterprises and consumers are inexorably shifting to cloud computing, and many are already there. This trend began with the corporate emphasis on leaner, more agile operations years ago. Fewer businesses are constructing their own data centres. Hyperscalers and other cloud computing behemoths are stepping in to fill the void. The cloud can be public, private, or hybrid, but cloud computing is fundamental to corporate IT and software development innovation. And it’s not going anywhere.

Anything as a Service, or XaaS, is part of that trend and a natural outgrowth of cloud computing’s evolution. Cloud-based service platforms enable businesses to scale and adapt more quickly. As more customers migrate to 5G, “Anything as a Service” presents a new landscape of opportunities. 

The XaaS subscription consumption model holds enormous promise for entrepreneurs looking to bootstrap innovative businesses without large capital investments. Many companies have already realised significant cost savings.

The COVID-19 pandemic and the tectonic shift in skilled labour toward a hybrid workplace have aided in accelerating the XaaS trend. The emergence of service platforms offers one way for businesses dealing with hybrid work issues to support their employees. Perhaps more importantly, it enables businesses to scale services up as additional capacity is required and to scale services down in response to changing capacity requirements.

According to Gartner, end-user spending on public cloud services will exceed $332 billion in 2021. Software as Service offerings received $122.6 billion in investment, including platforms such as Salesforce and SAP, as well as Adobe Creative Cloud and Microsoft Office 365. $82 billion on Infrastructure as a Service (IaaS) provides cloud-facing businesses with the core services they require to scale in the cloud. Another $59.4 billion was spent on Platforms as a Service (PaaS), which provides businesses with more robust tools for deploying custom cloud applications. Gartner also predicts that these three segments will grow the most in the coming years as more companies turn to the web out of necessity.

One size does not fit all, but it does provide the majority.

As Communication Service Providers (CSPs) transition to 5G, XaaS holds the promise of new revenue streams and growth opportunities. 5G offers an infinite runway for innovation and iteration for businesses that adopt cloud-centric methodologies that emphasise DevOps and other operational and management processes and systems that emphasise continuous app deployment and iteration.

There are some drawbacks to anything as a Service. Some of these are issues businesses have been dealing with for years, such as reliance on a single vendor or obsolete technology. Using the cloud necessitates additional security, backup, and service outage mitigation strategies. Data sovereignty and data privacy are of the utmost importance. Moreover, while XaaS promises lower capital costs for businesses, it is still a consumption model. Hidden and licence fees can add to astronomical costs for businesses, potentially limiting profitability and growth.

XaaS is not a cure-all for all corporate capital issues nor a one-size-fits-all solution. However, as businesses continue to reinvent themselves around the cloud, it may be a “fits most” solution that guides the evolution of cloud computing over the next several years.

The cloud is not appropriate or necessary for every business or business process. However, most businesses considering XaaS now believe that the model gives them a competitive advantage in bringing new products to market, and many consider it a strategic advantage. One thing is sure: it is growing and will continue to grow and evolve alongside the rest of the cloud computing industry.