Anything-as-a-Service (XaaS) Market

Anything-as-a-service (XaaS) is a term that describes a broad category of services related to cloud computing and remote access. It recognizes the vast number of products, tools, and technologies that are now delivered to users as a service over the internet. With this model, companies offload IT responsibility to the service provider. The service provider may own the assets, monitor them, and manage them as part of a packaged deal. The service is paid for in a flexible consumption model rather than as an upfront purchase or license.

The global XaaS market size is expected to grow from USD 265.4 billion in 2022 to USD 745.0 billion in 2027, at a CAGR of 22.9%. Growing need among enterprises to adopt cloud-based consumption models that bring scalability, agility, flexibility, and cost efficiency are boosting the growth of the market. Additionally, the market growth can be attributed to the improved expense model and business processes, faster implementation of new applications, and shifting IT resources to higher value projects.

Drivers: Rising adoption of subscription-based platforms to improve expense model, customize services, and enhance agility

Organizations have adopted the as-a-service model to deliver everything that consumers need, even in a real, non-digital world. Therefore, XaaS is a combination of software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS) offering. Outside these categories, XaaS includes a variety of technology service models such as disaster recovery as a service (DRaaS), communications as a service (CaaS), network as a service (NaaS), database as a service (DBaaS), storage as a service (STaaS), desktop as a service (DaaS), monitoring as a service (MaaS), and others. With XaaS, businesses no longer pay upfront for services. Instead, they purchase them on a subscription basis. This mode of buying the services helps organizations to improve their expense model. Previously businesses bought software, hardware, infrastructure, servers, or security, installed these individual products on the site, and linked them together to form a network. However, with XaaS and cloud services, businesses buy what they need and pay for them as they go. This has shifted its capital expenses to operating expenses. Importantly, XaaS offers businesses greater flexibility, scalability, and agility to their existing architecture. These factors are driving the growth of XaaS market globally.

Rising adoption of IoT as a Service and Artificial Intelligence as a Service

With the digital revolution all over the place and the world adapting to Artificial Intelligence (AI) and the Internet of Things (IoT), businesses are seeking new business models and flexible technology platforms. The combination of cloud computing and global internet access with high speed and high bandwidth provides a perfect environment for adopting the XaaS model. XaaS is sure to drive business and dominate the future of cloud computing. These factors are expected to augment the growth of XaaS market during the forecast period.

Challenges: Bandwidth and latency issues, service outages, vendor lock-ins, security mishaps, and hidden costs

Each technology has its drawbacks, so as-a-Service has its own flaws. The risks of massive data loss, security concerns, and end-users are some of the reasons businesses are afraid to rely on cloud providers entirely. XaaS users face problems when internet is down or running at slower speed. Customers don’t get reliable service when XaaS servers are down as all the hardware and software resources lies at the premises of XaaS providers. Also, XaaS users face performance issues when more customers access the same resources simultaneously. In such situations, they face bandwidth and latency issues. Moreover, hidden costs associated with integration, management, security, and handling large volumes of data leads to an added challenge for XaaS users. In addition, an XaaS provider that gets acquired, discontinues a service, or alters its roadmap can have a profound impact on XaaS users. Collectively these factors are observed to hamper the market growth.

Key players in the market

Cisco (US), Oracle (US), HPE (US), IBM (US), Microsoft (US), NEC Corporation (Japan), Dell (US), VMware (US), Avaya (US), and Google (US) are few key players in the XaaS market globally.

Recent Developments

• In September 2021, Lenovo introduced Lenovo TruScale, a new portfolio spanning XaaS offering. Lenovo TruScale offers businesses of all sizes a XaaS platform with the flexibility they need to stay competitive with a scalable, cloud-like consumption model and predictable payment options for hardware and service inclusions.
• In June 2021, HPE expanded its partnership with Veeam as customers embrace XaaS and Kubernetes data protection. This enables HPE GreenLake and Veeam deliver an end to end “as-a-service” experience with a platform for Modern Data Protection that reflects customers’ evolving desire for the cloud experience.
• In March 2021, Cisco launched Cisco Plus, the company’s unique as-a-service strategy, bringing new flexible buying and consumption models to customers. Cisco Plus will offer best-in-class networking, security, compute, storage, applications, and observability solutions as-a-service with unified subscriptions that are easy to consume, simple to use and delivers an unparalleled experience.