Many technology companies are shifting to a service-based model for providing products and capabilities, with some major players planning to transition the bulk of their portfolios over the next few years. At the same time, leaders across industries are moving from traditional IT to everything-as-a-service (XaaS) for improved agility, new capabilities and better management of capacity and costs.

XaaS is a collective term that refers to the range of services, software, tools and infrastructure that vendors deliver to users as a service over a network – usually the Internet – on a subscription or pay-per-use basis, enabling users to access and utilise the services without the need for physical ownership or local installation.

To unpack “as-a-service “offerings, TechCentral hosted a round-table conversation sponsored by Tarsus Distribution and HPE with some of the country’s leading executives across a range of industries at the Saxon Hotel & Spa in Sandton. Attendees delved into the main benefits, business concerns and challenges associated with “as-a-service” offerings, shedding light on where true benefits can be gained, as well as pitfalls and hidden costs.

A deep business relationship

They all agreed that when you engage an “as-a-service” vendor, you are entering a business relationship that’s deeper than just contracting for commodity processing or storage in the cloud, software or infrastructure.

This is because “as-a-service” vendors provide more than software, hardware and other services. They also deliver expertise in specific areas that should augment businesses. Clients and service providers need to create a business partnership that is mutually beneficial to both parties, ensuring that a company’s needs will be met on an ongoing basis.

A true paradigm shift

XaaS introduces a paradigm shift that redefines how businesses and individuals interact with technology. Its benefits are transformative and far-reaching, although they can vary depending on the specific context and implementation of XaaS in different industries and sectors. XaaS offers cost efficiency through pay-as-you-go models, eliminating hefty upfront investments.

This agility is further elevated by the scalability of services, allowing rapid adjustments to meet evolving needs. XaaS further democratises advanced technologies, granting access to tools and resources previously out of reach. As service providers handle maintenance, updates and security, users are liberated from cumbersome upkeep and benefit from streamlined operations, enabling them to redirect their focus towards innovation and improving end-user experience.

The challenges of XaaS

While XaaS revolutionises the tech landscape, attendees agreed it also presents its fair share of challenges. The dependency on service providers can result in limited control and potential vendor lock-in, raising concerns about data security and privacy. Connectivity hiccups or downtime can disrupt operations, underscoring the reliance on stable internet access.

Pricing models sometimes hide unforeseen costs, and customisation limitations can hinder tailoring services to unique needs. Extracting and migrating data can be tricky and the question of data ownership can be complex. Service disruptions are possible, with the viability of providers over the long-term raising uncertainties.

Navigating cultural shifts and change management poses challenges, requiring organisations to adapt their workforce’s skills and mindsets. While the benefits of XaaS are promising, delegates agreed that addressing these challenges is vital to harness its potential effectively.

Successful service relationships

Delegates believed that the success of an “everything-as-a-service” relationship relies heavily on a collaborative partnership between service providers and clients. Both parties share responsibilities to ensure the smooth functioning, effectiveness and long-term viability of the services. Most clients believe that it is necessary just to obtain and configure service components from their service providers and they will automatically get the value from these service components.

However, co-creation of value is the continual process of coordination between the client and their service providers, not just a one-time activity to agree on the service contract. It is necessary to manage the service relationship during service provisioning and consumption on an ongoing basis to ensure continual co-creation of value.

Finding a trusted advisor

Attendees also shared a few ways to tell the difference between service providers that will be simple vendors versus those who will be partners. If you don’t get the sense that a provider is checking these boxes, their recommendation is to walk away and find one that does.

Takes the time to truly understand your needs: When talking to a potential service provider, clients should make sure they feel comfortable that the service provider truly understands their specific use cases and needs. They should be asking questions and providing guidance, not just repeatedly offering their solution.
Takes the time to get to know your company: A decent service provider may take the time to understand a client’s project needs, but the stand-out service providers take the time to understand a client’s company and vision to ensure they’re guiding clients in the right direction and providing the most appropriate solution that will grow with the organisation.
Being honest and transparent: Not every service provider can fulfil every need. Those who can’t or won’t admit that they’re not the right fit for a particular project aren’t interested in helping clients succeed. Clients want to work with services providers who are trusted advisors, and transparency and honesty are key to a strong partnership.
Keeping in touch: Working with service providers is supposed to make clients’ lives easier. The provider should be as invested in the client’s success and the process to get there as they are. During the sales process, clients should ask about post-implementation support. If the support or ticketing process seems impersonal then it probably will be. The best service providers supply clients with a list of contacts that will be working on the client’s account before they even sign the contract. A great service provider doesn’t just manage a solution for the client, but also manages and nurtures the relationship.

The success of an XaaS relationship hinges on a balanced partnership where both vendors and clients understand their roles, collaborate effectively and contribute to achieving mutual goals. This collaborative approach fosters trust, long-term value and innovation in the XaaS ecosystem.

TechCentral, in partnership with Tarsus and HPE, would like to thank all of those who participated in the round-table discussion.