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XaaS – a new era

A Chinese philosopher who was immortalized in the annals of history as Confucius said that you only had to find something you liked doing in order to spend the rest of your life without a day’s work. Although two and a half thousand years have passed since, his words have stood the test of time. If your work is your passion, you have struck gold – you can fulfil yourself. This is much more than conscientiously fulfilling your duties.

I am one of those lucky ones who indulge their passions in their professional life. A simple example: I follow closely developments in the IT market. I track down and analyse information and then try to predict the likely course of events. For someone who leads a large company, being able to do so effectively is of course highly desirable – in fact, it is absolutely necessary. Accurate predictions give you the edge over the competition. But my motivation is never stronger than when it is coupled with the fascination with the pace of change in our environment – a realm of reality created by hardware, software, the global net, virtual reality and the market – the last of which brings all the other parts together into one logical whole and puts them at the service of the economy. When events begin to resemble a movie in fast motion and the reality changes like in a kaleidoscope, being able to understand how invisible mechanisms work requires a lot of effort, patience and acumen. But that’s precisely the name of the game!

Why do I keep coming back to market evolution? Everything seems to suggest that we are approaching the dawn of a new era. It’s an era that promises to usher changes that are so radical as to revolutionise not only our sector but large swathes of the economy. It is set to be a time marked by a faster and faster growth of cloud computing – „Xaas era” (Everything as a Service).

Acronyms of the _aaS type which have become popular cloud computing terms and which start with any letter or a set of letters of the alphabet are of course nothing new. Services such as SaaS, PaaS or IaaS are now classics of the genre to the extent that creating new acronyms seems to be completely unnecessary. It should not escape our notice though that, even as we speak, the quantity and in particular the variety of services are increasing at a phenomenal rate. At the same time, the total market value increases year by year and, crucially, new trends and new business models emerge.

We’ll not be far off the mark if, in line with current estimates, we assume that, globally, the total value of cloud computing services will exceed a quarter of a trillion dollars. Compared to last year this represents an increase of nearly twenty per cent. If the trend continues, we can safely assume that within two years the market value will approach the half-a-trillion dollar mark. And even though, for obvious reasons, market growth does not look so impressive in Poland, it can be taken as given that the adaptation process will accelerate, prompting companies to invest.

What sort of investments are we talking about? Here we come to the heart of the matter. In the last few years companies have had no reason to complain about there being not enough incentives to modernise their infrastructure. Starting from the ever-more demanding challenges connected with job security or labour mobility up to the M&A activity, companies have been under more pressure to spend money. XaaS should be analysed in precisely the same terms. This time however the incentive will be more keenly felt than ever before. Just why this is so becomes clear when we take a look at the evolution of customer expectations.

As it happens, in order to explain it all we have to do is look at jut one well-known example. Uber after all is nothing more than „transportation-as-a-service”, a service and a business model which gave rise to the expression „Uberized Economy”. And all we have to do indeed is apply a similar model in the area of IT to understand why I’m writing about a new era, „the XaaS era”, even though cloud computing services have been evolving for quite some time now. Just as this notorious company is not simply yet another taxi corporation so XaaS stands for much more than a range of cloud computing services offered to their clients by highly specialised companies. It is, perhaps crucially, the possibility to increase efficiency and to generate income by sharing one’s own IT resources, whether within a company, for example between departments, or outside. However, implementation of such a strategy calls at least for the modernisation of the existing infrastructure. And this means investment, does it not?

Employing just such a model, Amazon made available to its customers applications it had previously used for its own purposes. Using the same model, the company generates profits in many other areas starting from finance, through deliveries, to customer service. It would be hard to miss here the entirely new approach to business and the consistently pursued, long-term strategy which it commands. The infrastructure and the applications necessary for a company to operate have been replaced by a range of services provided both within the company and for price-conscious customers.

Examples of companies which are gearing their operations to accommodate XaaS can be multiplied. Some of them have only now spotted the opportunity, others have been implementing this strategy for years now. One thing is certain though – XaaS has an enormous potential. That’s why more and more companies, and not just the behemoths, are looking for their own business model in cloud computing. There are no guarantees it will be easy, but it is certainly worth it. After all, as one Chinese philosopher used to say, even the longest journey begins with a single step.

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