Types and Benefits of XaaS

Starting with SaaS, which delivers software via the Internet, XaaS (Anything as a Service), where everything is offered as a service, has become a significant trend. One of the characteristics of XaaS is that, unlike traditional on-premise software, one of the key characteristics of XaaS is that end users can access services from anywhere using devices like PCs and smartphones. In this article, we will first explore the specific types of XaaS, and then outline the benefits of XaaS from both the provider and user perspectives, with a focus on B2B services.

Types of XaaS

XaaS is spreading rapidly, to the point where you can find literature that lists and categorizes examples from A to Z. Here, we will highlight some of the most representative examples.

Servitization of the surrounding environment in providing software.

In How to launch SaaS and its characteristics, Software as a Service, Platform as a Service, and Infrastracture as a Service" as types of software as a service. Two other typical examples are introduced below.

ID as a Service.

• Service that performs identity management.
  • Examples: Auth0, Okta

Network as a Service

• Service that supports network construction, server/client configuration and installation, and maintains network performance.
  • Example: NTT Docomo

Servicing of distinctive means

Distinctive functions like analysis and communication have also been converted into services.

Analytics as a Service.

• Data storage, analysis, and statistics services provided through the cloud.
  • Example: Tableau

Communication as a Service

• Services related to communication such as videoconferencing, chat, etc.
  • Examples: Slack, Zoom

Industry-specific servitization

Some services are offered through distinctive devices in individual industries.

Mobility as a Service.

• Services that allow users to book and pay for mobility services.
  • Examples: Whim, Uber, Lyft

Retail as a Service

• Service that combines technology with accumulated customer and sales data.
  • Example: Amazon Go

As you may have noticed, while there is a general definition of XaaS, there is no established classification system for it. In fact, XaaS may be better understood as a term coined for marketing, similar to terms like 'XXX-Tech.

Benefits of XaaS

So, why do companies promote XaaS, even using it as a marketing term? We will elucidate the reasons by identifying the benefits from each provider/user's perspective.

Advantages of offering XaaS as a provider

Software and other offerings that are now part of XaaS were traditionally sold under a one-time purchase model. There are two main reasons why providers are now promoting XaaS.

First, it increases the predictability of sales. This model allows for more predictable sales, as revenue is secured through ongoing usage rather than relying on one-time sales each month. Such a PL structure can easily be valued relatively high by the capital market, and it can also be evaluated as a business model that is relatively less susceptible to economic downturns.

Second, it is possible to build a continuous relationship with users through services. Since we expect our services to be used continuously, we naturally need to receive feedback from users on their requests, problems, etc., and make improvements. Through such activities, we can prevent the service from fading away and maintain user satisfaction. It is also easier to guarantee the opportunity to take care of users before they switch to another company's system, rather than having them suddenly contact us to stop using the service.

Advantages of using XaaS as a user

When evaluating XaaS from the perspective of the users of the service, the advantages can be summarized into four categories.

The first is the ability to reduce the initial investment and pay for the service on a subscription basis. using XaaS reduces the amount of IT infrastructure that would otherwise be incurred, eliminating the need to prepare in-house servers, hard disks, networks, software, etc. for use in the data center. For startups and new businesses with strong cost constraints, XaaS can be a strong ally. Another major advantage of using XaaS is that it can be recorded as an expense rather than an investment.

Second, overhead costs such as maintenance can be reduced. In addition to the initial investment, maintenance is required for IT infrastructure. This allows the company to focus on operations that directly benefit its end users.

The third point is high scalability. For instance, if your business needs to expand rapidly, you can often upgrade your XaaS plan and scale quickly without major organizational changes, XaaS is often divided into different plans based on the features and frequency of use, allowing you to adjust the features and frequency of services according to your business needs.

Finally, XaaS encourages innovation by allowing the service provider to operate as an integrated part of your team, facilitating rapid product and business development. The company that provides XaaS can operate as part of its own team and quickly develop its products and business.

Conclusion

XaaS, especially SaaS, is starting to become widely adopted. This has benefits for both providers and users. Providers can increase sales predictability through ongoing relationships with users, and users can minimize overhead costs by paying only for what they use while minimizing initial investment. The rapidly advancing trend toward XaaS is irreversible, and in the extreme, we may be entering an era in which everything other than what is supposed to be used as one's own with a commitment to continue to use it as one's own will be converted to a service. Amid this ongoing trend, we hope this article will inspire you to rethink how you deliver your own products and services.

References

• A Proven Methodology to Maximize Return on Risk
• 4 Tips for Launching Minimum Viable Products Inside Big Companies
• Delivering large-scale IT projects on time, on budget, and on value
• Using an Enterprise Minimum Viable Product Approach
• リーン・スタートアップ×経営【第3回】大企業における新規事業を成功へ導く処方箋
• A Review Of The Minimum Viable Product Approach