How 'Everything as a Service' Can Save CIOs Money
Cloud computing is changing the way IT serves the enterprise. Today, nearly any type of hardware, software, IT process or business process can be offered as a cloud-based service.
It’s called “Everything as a Service” (XaaS), and the benefits to the enterprise include greater agility, higher levels of innovation, faster responsiveness to market changes, and a new, improved ability to contain costs and reduce the need for capital.
XaaS is a combination of utility-based offerings that can be consumed on a flexible per-seat, per-month model,based on usage. Companies with broad technology portfolios such as CSC are able to bundle as-a-service offerings and deliver to CIOs only the products and services they want and need.
Wendy Hartzell, CSC’s CIO for Global Sales and Marketing, sees XaaS as a paradigm shift in IT. “We are in the midst of one of the most exciting timesin technology, fueled by the combination of mobile devices and emerging XaaS capabilities,” she says.“This is requiring an overhaul of our thoughts around IT, the IT department, budgeting models, and in fact, ‘everything.’”
Research firm Gartner also views as-a-service as a significant trend. According to an August 31, 2012 report, “Market Trends: Cloud Business Process as a Service Outsourcing Trends,” by Cathy Tornbohm,a research vice president at Gartner, “Cloud and‘as a service’ are being promoted as great ways for customers to cut costs and access technologies and services quickly.” The report also says, “To clients, the attractive marketing features of most as-a-service cloud offerings are lower costs, pay-as-you-go per transaction, limited or no capital investment and increased speed to solution.”
As cloud computing emerges as a viable enterprise strategy, CIOs have more options than ever to choose from. But how does XaaS reduce costs, and how does everything fit together?
As CSC’s executive director of Global Unified Communications and Collaboration Solutions, Dean Fernandes helps customers craft their IT strategies. “What CIOs are looking for today is a way to manage costs,” he says. “And they want their costs to be usage based. They want to pay for things such as email storage on an ‘as-you-go’ basis, and they also want the model to be flexible enough that it can be delivered either on premises or in the cloud.”
For example, enterprises can experience dramatic swings in network traffic, Fernandes says. “It’s very seasonal, and this is especially true when you have a contact-center business where there are peak call times and non-peak call times,” he says. To accommodate these fluctuations, cloud technology provides infrastructure flexibility, giving CIOs the choice of deploying a private cloud, a public cloud or a hybrid.
XaaS reduces costs in that you pay for only what you use, says Fernandes. “Our clients want to go from a fixed-cost model to a variable-cost model, based on usage,” he says. “If you understand your usage and your usage goes up or down, that’s what you want to pay. You don’t want to pay for the capacity you’re not using.”
Hartzell adds, “The flexibility introduced by XaaS will introduce a more dynamic element to the budgeting process. There will be a shift from the major long-term capital investments needed for traditional on-premises systems to subscription-based, as-a-service offerings.”
Since XaaS is all about everything, a key challenge for CIOs is how to integrate everything. “At CSC, we have been building our portfolio around as-a-service, and we have the ability to integrate various services together and provide our customers a per-month, per-user bill based on their requirements,” Fernandes says.
For instance, in the area of unified communications, CSC offers a virtualized environment on a per-seat, per-user basis. “Not every user in the company uses the same features, so why should customers pay for features they’re not using?” Fernandes asks.
Fernandes says people should be able to collaborate and talk to each other in the way they want to. The various as-a-service models provide employees diverse ways to communicate and help make them more productive. “With mobility and the consumerization of IT, we are able to communicate very effectively across all the mediums on iPads, iPhones or other devices wherever we are and whenever we want to,” he says.
The best news for CIOs is that XaaS lets technology professionals concentrate on what they do best. “XaaS offers great opportunity for the IT department to redirect focus to more forward-thinking and strategic initiatives while confidently leveraging XaaS offerings,” Hartzell says.
The beauty of XaaS also lies in the fact that an evergreen model is built into it. “One of our customers’ biggest complaints is that after three to five years, the technology becomes obsolete.” With XaaS, Fernandes says, “Whenever we have an update, we will update our customers’ environment as part of the cost. That way, they are always up to date with the hardware and software, and we continue to manage that service for them.”
In Gartner’s report “Market Trends: Cloud Business Process as a Service Outsourcing Trends,” August 31, 2012, author Cathy Tornbohm observes that as-a-service offerings are increasingly being configured for specific industries. “Options for buying business services have never been more varied, with heavily customized offerings still being available and a host of very prescriptive, potentially configurable offerings emerging,” the report states.
The financial services industry is especially ripe to benefit from XaaS, Fernandes says: “Some of our biggest financial services customers are looking at using multiple portfolios and offerings from across CSC.” CSC’s vast network of partnerships and alliances serves as a solid foundation for making XaaS happen. Fernandes says, “CSC can offer as-a-service subscription models only if our partners help us get there — they have to provide a special licensing model.”
Through it all, Fernandes says, the key for CIOs is to identify which cloud option and what as-a-service offerings best meet their needs: “CSC can tie the various offerings together and funnel those to the customers so they get a bundled solution of all the products and services that we offer in an as-a-service model.”