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Emerging technologies as-a-service bring a competitive edge

XaaS adopters leverage service-based IT to access cutting-edge features and technologies

With XaaS rapidly becoming ubiquitous, how will adopters build and maintain a competitive edge? One hint lies in emerging technologies.

Over the past decade, organisations across industries have looked to take more control over the enterprise IT they use and how they pay for it—and technology providers have responded by shifting to a service-based model for providing products, capabilities and tools.1 To explore how companies gain value by adopting enterprise IT as-a-service, including motivations, outcomes and challenges, Deloitte undertook a new XaaS study, surveying 600 IT and line-of-business professionals responsible for service-based IT at large US organisations.2

Enterprises have embraced the XaaS model. The transition from traditional, nonservice IT to XaaS continues to transform the enterprise IT landscape and shows no signs of slowing.3 Three-quarters of our survey respondents report that their organisation already runs more than half of its enterprise IT as-a-service and seven in 10 are planning to increase their XaaS investments.4 In these disruptive pandemic times, many organisations feel increased urgency to adapt and become more nimble. The crisis has helped prove the value of XaaS and executives report that it has accelerated their move away from traditional IT.

Beyond using XaaS to increase efficiency, adopters are leveraging service-based IT to access cutting-edge features and technologies and boost innovation—including creating new processes, products and business models. Six in 10 say XaaS gives them a competitive edge, with one-quarter reporting a “significant lead.” But with XaaS quickly becoming pervasive, adopters may have to work harder to differentiate themselves in the future.

One sign of a leveling playing field: More than eight in 10 of our respondents say their companies already use software-as-a-service, infrastructure-as-a-service and/or platform-as-a-service—and nearly everyone plans to adopt them within the next two years. Our analysis revealed, however, that organisations that expand their use of XaaS to include advanced or emerging technologies as-a-service may be able to stay a step ahead (see figure). Those leveraging service-based AI, IoT technology, virtual/augmented reality, or edge computing are more likely to say that XaaS has helped them take a “significant lead.”

AI-as-a-service and IoT-as-a-service represent significant and growing markets,5 while intelligent edgecomputing—combining hardware, connectivity and AI to process data closer to where it’s collected—is a relatively newcomer to XaaS but rapidly gaining importance.6 For example, in hospital settings, edge services can run on servers near medical devices that generate streams of patient data—aggregating data, applying AI analytics and presenting advanced visualisations—to support rapid clinical decision-making.7 In cities, services can run at the edge (for example, in street-level controllers), applying machine learning to analyse traffic and manage traffic signals and flow in real time.8

Implications for TMT executives

To build and maintain competitive advantage through the use of XaaS, consider the following:

  • Define a strategy and road map. Does your company already have an XaaS-first IT strategy and a road map for migrating to service-based IT from traditional IT? Have you clearly defined executive responsibility for XaaS adoption?
  • Scale up. Are there areas of your business in which XaaS is underutilised? Review where and how your organisation deploys XaaS and whether there are business units or departments that could be making more effective use of service-based models.
  • Boost innovation. Think beyond using XaaS for improved efficiency and imagine how it can enhance innovation—for example, by providing access to advanced or emerging technologies as-a-service. Consider how accessing new technologies as services can help spur experimentation and development of new processes, products/services and even business models, helping to sharpen your competitive edge.

Certainly, using advanced capabilities as services is just one ingredient—albeit an important one—in building and maintaining a competitive edge with XaaS. We’re continuing to look at best practices that may help XaaS adopters create and maintain competitive advantage, and we plan to elaborate on them in a future publication.

Technology, Media & Telecommunications

Deloitte’s Technology, Media & Telecommunications (TMT) industry practice brings together one of the world’s largest group of specialists respected for helping shape many of the world’s most recognised TMT brands—and helping those brands thrive in a digital world.

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  1. Jessica Lyons Hardcastle, “HPE partners with Google Cloud, pledges entire portfolio ‘as-a-service’ by 2022 ,” sdxcentral, June 18, 2019; Gina Narcisi, “Cisco CEO Chuck Robbins: COVID-19 forcing as-a-service transition ,” CRN, August 12, 2020; Mark Haranas, “Dell to make ‘all offerings’ as-a-service, says Michael Dell ,” CRN, September 14, 2020.

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  2. XaaS—everything-as-a-service or anything-as-a-service—refers to products, tools, and capabilities that are delivered to users as services. For purposes of this article and our study, we focused strictly on enterprise IT as-a-service. To participate in our survey, a respondent needed to represent an organisation purchasing/consuming least 15% of its enterprise IT as-a-service.

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  3. Deloitte’s 2018 XaaS study projected the continuing transition from traditional IT to XaaS: Gillian Crossan et al., Accelerating agility with everything-as-a-service , Deloitte Insights, September 17, 2018.

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  4. Respondents were asked to consider their organization’s current enterprise IT products/services and estimate what proportion is being purchased and consumed as as-a-service IT versus traditional IT.

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  5. The global AI-as-a-service market was estimated to be worth US$1.52 billion in 2018 and forecast to grow to US$10.88 billion by 2023, at a 48.2% CAGR during that time frame. MarketsandMarkets, “Artificial intelligence (AI) as a service market worth 10.88 billion USD by 2023 ,” April 17, 2018. The global IoT cloud platform market size was estimated to be worth US$6.4 billion in 2020 and forecast to grow to US$11.5 billion by 2025, at a 12.6% CAGR during that time frame. MarketsandMarkets, “IoT cloud platform market worth $11.5 billion by 2025 ,” April 30, 2020.

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  6. Paul Gillin, “Out on the edge: The new cloud battleground isn’t in the cloud at all ,” SiliconANGLE, December 1, 2020; Mark Haranas and Gina Narcisi, “The Intelligent Edge: How Smart Solution Providers Are Creating New Services Blueprints ”; Chris Arkenberg et al., Gaining an intelligent edge: Edge computing and intelligence could propel tech and telecom growth , Deloitte Insights, December 7, 2020.

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  7. GE, “GE Healthcare introduces new edge technology designed to give clinicians rapid access to critical data ,” BusinessWire, October 14, 2020.

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  8. Mass Transit, “Cubic, SWIM.AI expand TidalWave nationwide with deployments in nine cities ,” February 6, 2020.

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Cover image by: Viktor Koen


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