Cloud computing has given rise to many distinct service models. As per the original definition from executive IT industry veteran Howard M. Cohen, the term combined three types of services - software, platform and infrastructure. What started as an IT only service soon became the basis of many different business models. As number of “as-a-service” models escalated, a 2014 IBM article concluded that we can be heading into the ‘XaaS’ or ‘X’ as a service era.
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What is Everything as a Service (XaaS)?
Everything or anything as a service is a product distribution method where instead of selling products we sell its value proposition as a service. For instance, in a traditional model you’ll purchase a light bulb, use it till it is in working condition and replace it when it needed. In a XaaS model you’ll buy lighting services from the manufacturer use till you need the bulb and the maintenance of bulb is the responsibility of the service provider.
There are many benefits to this approach for both the consumer and manufacturer. The consumer gets uninterrupted service without making a huge one time investment while the service providers get long-term contracts. This delivery model is an extension to the already popular software as a service model.
Benefits of Everything as a Service (XaaS):
The XaaS model brings a range of benefits for the consumers. It is because of these obvious advantages that we can safely say that everything as a service will soon become a common distribution and consumption model. Here are some of them:
- The consumer incurs lower cost as the he does not makes any outright purchases. The cost of consumption is divided over a period of time which it makes it easy to take benefit of better goods.
- Since their is no investment from consumer’s end it is easier for him to upgrade or downgrade depending upon budget. This allows for both vertical and horizontal scaling. Moreover he can enjoy latest innovations at a fraction of cost he would have incurred in the traditional model.
- Since maintenance is done by the provider it saves the consumer from issues and brings regular cash flow to the service provider.
- New businesses, products and services can easily enter market since it is easy for consumers to upgrade. Moreover since it is a service model businesses can respond faster to market conditions and take advantage of opportunities for better profits.
Recent Initiatives in XaaS:
There are many examples of successful XaaS applications. From Tesla offering upgrade to next version of the car at a nominal cost to Vocus Marketing Suite offering soffisticated marketing tools to SMBs in subscription model we are softly moving towards this model. GM recently launched a subscription based luxury car service - Book by Cadillac. The consumer pays for the car on a monthly subscription basis with price starting from $1,500 per month. The service is currently available in Los Angeles, New York and Dallas. The aim of the initiative is to sell cars to people who wouldn’t consider purchasing one on their own. It appeals to millenials who would love enjoy a car but are not ready for long term commitment like loans, insurance, maintenance etc.
Another astounding product offered as a service is the Nanit baby monitor. It works as a simple baby monitor plus more. It tracks and analyzes baby’s sleeping patterns and with a monthly subscription of $10 you can Nanit insights - an report on the health of the baby every morning on your app. This report includes sleep patterns, insights, wake time, total time slept etc. The product is a massive success with first 6 batches being sold already. The company is currently accepting pre-orders.Read More: 5 IoT Applications to Look Out for in 2018
The future possibilities of XaaS are immense considering that there are range of businesses that are yet to include “as a service” in their offerings. This would bring more penetration of smart devices (especially Consumer IoT) into the market. These devices could be easily upgraded and would offer insights to manufacturers and intelligent service to consumers. Overall this would give rise to new services, new businesses and new living standards.
We at NewGenApps specialize in building scalable IoT applications. With a passion for technology and a lean development team we can take any challenge in tech. Contact us today for a project or consultation.