There is a major shake-up happening in the IT industry, and it’s helping companies to move away from traditional hardware sales, and into a space where they make money on an ongoing basis. They do this by supplying not only IT hardware, but peripheral services as well, that are paid for on a monthly basis.
This new trend of combining products with services is being called “Everything As A Service”, abbreviated as XaaS.
Sounds like the cloud
If the above sounds quite a bit like the cloud, you’d almost be right: while XaaS does indeed introduce fixed monthly costs for some aspects of an organisation’s day-to-day operations, it doesn’t necessarily mean absolutely everything a business uses will someday be paid for with a monthly fee.
In the IT space, XaaS refers to the services that can be offered together with things like physical hardware (notebooks, tablets, etc.), which enhances the value proposition of procuring those devices through companies that offer the “as a service” advantage.
Those services usually involve some sort of management solution that monitors a business’s devices and provides reports to IT.
These can be used to keep IT informed about things like CPU usage levels, the condition of components (which can prompt proactive maintenance that could extend the life of that device), where and when they are used, and other tidbits that can be used to more efficiently manage the company’s IT infrastructure.
And since “as a service” services are operational expenses rather than capital expenditures, they will also please the numbers people by making some monthly IT costs predictable.
How Rolls-Royce is leveraging the “as a service” advantage
To illustrate how this works in principle using a non-IT example, let’s take a look at Rolls-Royce, a company famous for its engines. Last year, Rolls-Royce rolled out an XaaS service called TotalCare which rents jet engines to airlines; its tagline is “Power by the hour”.
The company has deep insight into every aspect of those engines, thanks to the fact that they’re built with all manner of cutting-edge Internet of Things sensors embedded everywhere. Rolls-Royce’s TotalCare service uses the data those sensors gather to help airlines improve their operational efficiency.
Knowing the state of every component in their engines and passing that on to airlines as a value-added service not only encourages proactive maintenance and keeps engines healthy, but gives airlines more reason to do business with Rolls-Royce.
And the airlines like this arrangement because efficiency improvements as small as 1% can add up to a big sum of cash saved in the long term.
In a similar manner, IT resellers can empower their end-customers by leveraging the intelligence built into the devices they supply, even flagging up potential issues before they escalate.
For example, value-added services can flag up devices that could benefit from proactive maintenance and alert customers when their devices are approaching end-of-life. And things like real-time analytics can provide the business with insights into how their IT equipment is being used and whether it’s fit for purpose.
That last bit is handy as it gives IT managers solid data on which to base procurement decisions. If, for example, the Finance department has been kitted out with Core i7 laptops but their average CPU usage indicates they could still do their jobs with less beefy processors, the business could organise Core i5 laptops for them instead and save a bit of cash.
While the “as a service” revolution is just getting started, it’s useful to know that it’s already available in some form from some vendors.
HP, for instance, has an “as a service” value-add product called TechPulse Analytics that does what is described above – it proactively identifies potential issues with IT devices and helps to mitigate the issues that those could cause.
It’s OS-agnostic and covers everything from Android smartphones to Mac laptops to Windows PCs and tablets, and puts a lot of power in the hands of the IT department. When layered on top of HP’s already-excellent devices as a value-add, businesses get the kind of device visibility that can save on costs in the long term.
If you’re interested in TechPulse it’s available right now, and you can speak to the HP team at Tarsus Distribution for more information.
In the future, it’s going to be hard for businesses to resist the many benefits of the coming “as a service” revolution, or for resellers to ignore the benefits of offering it to their end-users:
- Monthly costs become predictable and thus more manageable
- Capex becomes opex
- Insights derived from built-in intelligence can lead to operational efficiencies
- Lowers running costs
- Less in-house maintenance and support frees up IT teams for important internal projects
Expect this XaaS phenomenon to keep gaining momentum as businesses increasingly realise the benefits of paying monthly fees rather than up-front costs for the services and insights that keep them going.