Deloitte
  • Services

    What's New

    • Connecting for a resilient world

    • Deloitte 175

      Join us for a celebration of 175 years of making an impact that matters.

    • Climate & sustainability

      Guiding organizations to a more sustainable future.

    • Audit & Assurance

      • IASPlus
      • Assurance Services
      • Complex Accounting Assurance
      • Accounting Operations Assurance
      • Media & Advertising Assurance
      • Disruptive Events Assurance
      • Global Public Policy
    • Consulting

      • Strategy, Analytics and M&A
      • Customer and Marketing
      • Core Business Operations
      • Human Capital
      • Enterprise Technology & Performance
    • Risk Advisory

      • Strategic & Reputation Risk
      • Regulatory Risk
      • Financial Risk
      • Operational Risk
      • Cyber Risk
    • Financial Advisory

      • Mergers & Acquisitions
      • Restructuring Services
      • Deloitte Forensic
    • Legal

      • Legal Management Consulting
      • Legal Advisory Services
      • Legal Managed Services
      • Dbriefs Legal
      • Deloitte Legal Around the World
      • The Resilient General Counsel
    • Tax

      • Business Tax
      • Global Employer Services
      • Operations Transformation for Tax
      • Global Tax Reset
      • Tax Automation and AI
      • The Resilient Tax Leader
    • Deloitte Private

  • Industries

    What's New

    • Connecting for a resilient world

    • Future of Mobility

      Learn how this new reality is coming together and what it will mean for you and your industry.

    • Platforms and Ecosystems

      Enabling the Digital Economy

    • Consumer

      • Automotive
      • Consumer Products
      • Retail, Wholesale & Distribution
      • Transportation, Hospitality & Services
    • Energy, Resources & Industrials

      • Industrial Products & Construction
      • Mining & Metals
      • Oil, Gas & Chemicals
      • Power, Utilities & Renewables
      • The Future of Energy
    • Financial Services

      • Banking & Capital Markets
      • Insurance
      • Investment Management
      • Real Estate
    • Government & Public Services

      • Civil Government
      • Defense, Security & Justice
      • Health & Social Care
      • International Donor Organizations
      • Transport
    • Life Sciences & Health Care

      • Health Care
      • Life Sciences
    • Technology, Media & Telecommunications

      • Technology
      • Telecommunications, Media & Entertainment
  • Insights

    Deloitte Insights

    What's New

    • Deloitte Insights Magazine

      Leading beyond the disruption. Read the Spring 2021 issue now.

    • Deloitte Insights app

      Go straight to smart with daily updates on your mobile device.

    • Weekly economic update

      See what's happening this week and the impact on your business

    • By topic

      • AI & cognitive technologies
      • Analytics
      • Blockchain
      • Digital transformation
      • Diversity & inclusion
      • Economics
      • Human capital
      • Innovation
      • Leadership
      • Private companies
      • Risk management
      • Strategy
    • By sector

      • Automotive
      • Consumer products & retail
      • Financial services
      • Government & public services
      • Health care
      • Industrial products
      • Life sciences
      • Mining & metals
      • Oil, gas & chemicals
      • Power, utilities & renewables
      • Technology
      • Telecom, media & entertainment
      • Transportation & hospitality
    • Spotlight

      • Deloitte Insights Magazine
      • Climate and sustainability
      • Economic weekly update
      • Future of work
      • 2021 Human Capital Trends
      • 2021 Tech Trends
  • Careers

    What's New

    • Millennial Survey 2020

      Millennials and Gen Zs hold the key to creating a “better normal”

    • Alumni profiles

      Inspiring leaders

    • Job search

    • Experienced hires

    • Students

    • Life at Deloitte

    • Inclusion at Deloitte

    • Alumni

  • GLOBAL-EN Location: GLOBAL-English  
  • Contact us
  • GLOBAL-EN Location: GLOBAL-English  
  • Contact us

Welcome back

Still not a member? Join My Deloitte

Accelerating agility with everything-as-a-service

by Gillian Crossan, Susanne Hupfer, Jeff Loucks, Gopal Srinivasan
  • Save for later
  • Download
  • Share
    • Share on Facebook
    • Share on Twitter
    • Share on Linkedin
    • Share by email
Deloitte Insights
  • By topic
    By topic
    By topic
    • AI & cognitive technologies
    • Analytics
    • Blockchain
    • Digital transformation
    • Diversity & inclusion
    • Economics
    • Human capital
    • Innovation
    • Leadership
    • Private companies
    • Risk management
    • Strategy
  • By sector
    By sector
    By sector
    • Automotive
    • Consumer products & retail
    • Financial services
    • Government & public services
    • Health care
    • Industrial products
    • Life sciences
    • Mining & metals
    • Oil, gas & chemicals
    • Power, utilities & renewables
    • Technology
    • Telecom, media & entertainment
    • Transportation & hospitality
  • Spotlight
    Spotlight
    Spotlight
    • Deloitte Insights Magazine
    • Climate and sustainability
    • Economic weekly update
    • Future of work
    • 2021 Human Capital Trends
    • 2021 Tech Trends
    • GLOBAL-EN Location: GLOBAL-English  
    • Contact us
    17 September 2018

    Accelerating agility with everything-as-a-service IT providers are shifting from traditional models to XaaS flexible consumption models

    17 September 2018
    • Gillian Crossan United States
    • Susanne Hupfer United States
    • Jeff Loucks United States
    • Gopal Srinivasan United States
    • Gopal Srinivasan United States
    • Save for later
    • Download
    • Share
      • Share on Facebook
      • Share on Twitter
      • Share on Linkedin
      • Share by email
    • Business agility rivals efficiency as a key benefit of XaaS
    • XaaS is democratizing innovation
    • Data security, integration, and cost issues hinder XaaS efforts
    • The time is now

    ​How to make a company more agile? Increasingly, enterprises are moving from traditional purchasing of technology to everything-as-a-service. Our new survey shows how companies are benefiting from XaaS—and where they’re struggling.

    Today’s fast-paced, disruption-driven marketplace often drives an increased need for agility. To thrive, companies should be able to see around corners, make quick course corrections, and harness technology to reimagine business models and reinvent how to deliver value to customers.

    Consequently, many enterprise IT providers are shifting to a flexible consumption or everything-as-a-service (XaaS) model. With this approach, products and services are paid for based on usage—as opposed to the traditional IT model that involves an up-front purchase or licensing.

    Learn More

    Download the full report or create a custom PDF

    Read How technology OEMs can guide channel partners into XaaS

    View more content for the Telecom, Media & Entertainment sector

    Subscribe to receive related content

    Explore the cloud innovation charticle

    To learn more about how companies are adopting and gaining value from flexible-consumption/XaaS models, Deloitte surveyed 1,170 IT and line-of-business professionals from large US companies that consume at least 15 percent of their enterprise IT on an XaaS basis. For a comprehensive look at the Deloitte 2018 Flexible Consumption Models Study, download our full article, Accelerating agility.

    Three key insights from our study:

    • Companies see XaaS as driving not only efficiency but, increasingly, business agility.
    • Flexible consumption is making technology—and innovation—more broadly available.
    • Issues of data security, integration, and cost are hindering XaaS efforts.

    Business agility rivals efficiency as a key benefit of XaaS

    XaaS can help companies get nimbler: Our survey indicates that business agility and innovation are well on their way to surpassing operational efficiency as primary drivers of XaaS adoption.

    For example, 40 percent of respondents say “access to newest technology” is a key goal when choosing XaaS (table 1). In addition, for companies where more than three-quarters of the enterprise IT is XaaS, and in companies that have been using flexible consumption for more than three years, “accelerated innovation” has overtaken “reduced costs” as a goal for their XaaS initiatives. What’s more, seven in 10 companies report that XaaS is “very important” or “critically important” to their organization’s business success.

    Business agility is beginning to rival operational efficiency as a goal of XaaS

    Of course, operational efficiency remains a clear motivation for XaaS adoption. The top overall motivator is flexibility—the ability to quickly scale IT capacity, operations, and associated costs up or down on demand, as needs change. Increased workforce efficiency is a close second objective, and it’s easy to understand why: Seventy-one percent of companies report that XaaS allows them to reduce time spent on IT maintenance and upgrades—now squarely on the shoulders of the service provider. An equal number say that XaaS enables them to transition their IT staff to more important tasks, such as helping the business to innovate.

    Sixty-one percent of companies report that they’re mostly/fully achieving accelerated innovation with XaaS. Three-quarters indicate that flexible consumption helps them rapidly design, develop, and deploy new products/services; an equal number note that XaaS helps them reinvent business processes. Seven in 10 say that XaaS has led to new business models.

    With the benefits it confers, XaaS no longer appears to be optional: Companies that don’t incorporate it may risk falling far behind the competition. Thirty-nine percent of companies report that XaaS adoption helps them catch up to or keep pace with their competitors, and another 32 percent believe it helps them edge slightly ahead. Twenty-eight percent believe their use of flexible consumption is giving them a sizable lead.

    XaaS is democratizing innovation

    Innovation acceleration with XaaS is emerging as an essential part of many companies’ strategic playbooks, particularly for the C-suite. A key factor contributing to that acceleration is democratization of innovation—making new technologies and tools more broadly and easily accessible, getting them into the hands of more diverse users across organizations, and fostering experimentation.

    In our survey, seven in 10 companies report that XaaS reduces their cost of entry for adopting products/services; an equal number say that flexible consumption allows them to access a product or solution that otherwise would be too expensive. XaaS also enables companies to deploy new technologies without hiring specialized internal IT talent. Indeed, eight in 10 companies report that XaaS gives them quicker access to the latest technologies and innovative capabilities.

    With the emergence of XaaS, the relationship between IT and the rest of the business is evolving. In many cases, the IT department no longer has a monopoly on providing technology to the organization: Seventy-one percent of surveyed companies report that their IT department now provides a framework and guidelines that allow business users to buy and use XaaS on their own. Seventy-four percent agree that the IT department functions as an “IT orchestrator” by evaluating, procuring, and managing new XaaS options for the organization.

    Grassroots experimentation is the primary catalyst for XaaS adoption

    Flexible consumption often fosters greater experimentation in organizations, by a broader set of users than ever before. Seventy-five percent of respondents say XaaS makes it easier and faster for them to prototype and experiment with novel solutions, and quickly evaluate outcomes. In fact, the top impetus for organizations to adopt XaaS solutions is grassroots experimentation—and not by only the IT department (table 2).

    Data security, integration, and cost issues hinder XaaS efforts

    While XaaS is extremely popular and can deliver benefits in spades to organizations, challenges remain. Topping the list are data security and privacy concerns, integration/interoperability/IT management challenges, and cost issues; these outweigh challenges relating to regulatory compliance, skills, product features, customizability, and vendor-related problems.

    XaaS cost concerns present a conundrum. On one hand, seven in 10 respondents say their organization’s XaaS adoption has generated a better ROI than traditional IT, and the same number report that XaaS adoption has generally resulted in a lower total cost of ownership. Yet over one-third of companies still rate cost concerns as a top-three challenge. Among those who do, 45 percent report that their XaaS costs are difficult to predict and budget for; 42 percent say XaaS costs are greater than anticipated; and 34 percent indicate their renewal prices increased unexpectedly. Forty-four percent say duplicative costs are an issue—they’re continuing to pay for traditional IT while also paying for XaaS.

    Among respondents who cited “integration, interoperability, or IT management challenges” as a top-three issue, 43 percent say they have difficulty transitioning away from highly integrated traditional IT solutions, and 39 percent mention difficulty integrating XaaS solutions with their traditional IT. Knitting together and managing various XaaS solutions also represents an obstacle: Forty percent say they’re facing integration or interoperability problems with their various XaaS solutions; about the same number specifically point to data-sharing difficulties.

    New regulations are causing 71 percent of our survey respondents to re-examine the data handling associated with their XaaS solutions, though 69 percent believe they have adequate processes and policies to deal with data security for XaaS. Data security and privacy concerns are reflected in where companies choose to keep their data when using Xaas: About four in 10 say they keep less-sensitive data (XaaS usage data and nonpersonal organizational data) mostly or fully in the cloud, while only one-third keep customer, financial, or personal data mostly or fully in the cloud. Most companies (55 percent) say it’s entirely or somewhat more the responsibility of their own organization to ensure data security in XaaS initiatives (figure 1); 35 percent regard data security as a joint responsibility of their organization and the service provider.

    More than half of respondents view security primarily as a company (vs. provider) responsibility

    The time is now

    Our survey results make one thing clear: When it comes to accessing new technological capabilities as part of companies’ digital transformation, many executives want them to be based on flexible consumption. They recognize that XaaS-driven models may be a key to boosting business agility, innovation, and operational efficiency. If you’re a technology company and still trying to sell under old business models, you’ll likely need to make changes to remain competitive.

    For a comprehensive look at the Deloitte Flexible Consumption Models Study, download our full article, Accelerating agility.

    Authors

    Gillian Crossan is a managing director in Deloitte’s Technology practice, where she is the global lead client service partner for one of the firm’s largest technology clients. She is based in Seattle, WA.

    Susanne Hupfer is a research manager in Deloitte’s Center for Technology, Media, and Telecommunications, specializing in the technology sector. She is based in Boston, MA.

    Jeff Loucks is the executive director of Deloitte’s Center for Technology, Media, and Telecommunications. He is based in Columbus, OH.

    Gopal Srinivasan is a leader in Deloitte’s Technology, Media, and Telecommunications industry and Monitor Deloitte Strategy practices for Deloitte Consulting LLP. He is based in San Francisco, CA.

    Acknowledgments

    The authors would like to thank Sayantani Mazumder and Shashank Srivastava for their invaluable contributions to data analysis and insight creation, and Deepan Kumar Pathy for conducting vital secondary research. We would also like to thank the many Deloitte professionals whom we interviewed to gather their expertise on flexible consumption, including Abhi Arora, Jagjeet Gill, Faruk Muratovic, John Namovic, and Deepak Sharma. Last but not least, we thank Chris Arkenberg and Jeanette Watson for contributing thoughtful suggestions for our work, and Karthik Ramachandran for his guidance.

     

    Cover image: Andrew Bannecker

    Topics in this article

    Cloud , Information Technology , Innovation , Technology Industry , Telecommunications , Technology, Media & Telecommunications

    Deloitte's Center for Technology, Media & Telecommunications

    View

    Download Subscribe

    Related

    img Trending

    Interactive 3 days ago

    Susanne Hupfer

    Susanne Hupfer

    Research Manager | Deloitte

    Susanne Hupfer is a research manager in Deloitte’s Center for Technology, Media & Telecommunications, Deloitte Services LP, specializing in the technology sector. She conducts research to understand the impact of technology trends on enterprises and to deliver actionable insights to business and IT leaders. Prior to joining Deloitte, Hupfer worked for more than 20 years in the technology industry, in roles that included software research and development, strategy consulting, and thought leadership. She has a Bachelor of Science in mathematics and computer science from Trinity College and a Ph.D. in computer science from Yale University.

    • shupfer@deloitte.com
    Gillian Crossan

    Gillian Crossan

    Managing Director | Deloitte’s Technology Practice

    Gillian Crossan is a managing director in Deloitte’s technology practice, where she is the global lead client service partner for one of the firm’s largest technology clients. She is a regular contributor to Deloitte’s thinking on how to best serve digital platform companies that are transforming the global technology industry through innovation.

    • gicrossan@deloitte.com
    • +1 206 716 6254
    Gopal Srinivasan

    Gopal Srinivasan

    Principal | Deloitte Consulting LLP

    Gopal is a Principal and leader in Deloitte Consulting LLP’s Technology, Media, & Telecommunications (TMT) industry and Monitor Institute by Deloitte’s Strategy practice. He has more than 12 years of experience working with cloud, software, hardware, networking, and semiconductor clients. He focuses on corporate strategy, growth, product innovation, go-to-market, and new business models in the high-tech sector helping clients play to win in the era of digital business models and technologies such as cloud, artificial intelligence and the Internet of Things. In the last few years, Gopal has focused on helping multiple clients within and outside the TMT industry develop digital and flexible consumption business models (e.g., Cloud, SaaS, XaaS); develop product strategy and define product-market fit; develop pricing and offer structuring, solution-oriented go-to-market models, and agile operating models; and build strategic capabilities, such as customer success.

    • gosrinivasan@deloitte.com
    • +1 415 932 5352
    Jeff Loucks

    Jeff Loucks

    Executive Director | Center for TMT

    Jeff Loucks is the executive director of Deloitte's Center for Technology, Media, & Telecommunications, Deloitte Services LP. In his role, he conducts research and writes on topics that help companies capitalize on technological change. An award-winning thought leader in digital business model transformation, Jeff is especially interested in the strategies organizations use to adapt to accelerating change. Jeff’s academic background complements his technology expertise. Jeff has a Bachelor of Arts in political science from The Ohio State University, and a Master of Arts and PhD in political science from the University of Toronto.

    • jloucks@deloitte.com
    • +1 614 477 0407

    Share article highlights

    See something interesting? Simply select text and choose how to share it:

    Email a customized link that shows your highlighted text.
    Copy a customized link that shows your highlighted text.
    Copy your highlighted text.

    Accelerating agility with everything-as-a-service has been saved

    Accelerating agility with everything-as-a-service has been removed

    An Article Titled Accelerating agility with everything-as-a-service already exists in Saved items

     
    Forgot password

    OR

    Connect Accounts

    Connect your social accounts

    This is the first time you have logged in with a social network.

    You have previously logged in with a different account. To link your accounts, please re-authenticate.

    Log in with an existing social network:

    To connect with your existing account, please enter your password:

    OR

    Log in with an existing site account:

    To connect with your existing account, please enter your password:

    Forgot password

    Subscribe

    to receive more business insights, analysis, and perspectives from Deloitte Insights
    ✓ Link copied to clipboard
    • Contact us
    • Submit RFP
    • Job search
    Follow Deloitte Insights:
    Office locations
    GLOBAL-EN Location: GLOBAL-English  
    About Deloitte
    • Newsroom
    • Social media
    • Leadership blog
    • Press releases
    • Submit an RFP
    • Job Search
    • Global office directory
    • Contact us
    • About Deloitte
    Services
    • Audit & Assurance
    • Consulting
    • Risk Advisory
    • Financial Advisory
    • Legal
    • Tax
    • Deloitte Private
    Industries
    • Consumer
    • Energy, Resources & Industrials
    • Financial Services
    • Government & Public Services
    • Life Sciences & Health Care
    • Technology, Media & Telecommunications
    Careers
    • Job search
    • Experienced hires
    • Students
    • Life at Deloitte
    • Inclusion at Deloitte
    • Alumni
    • About the Deloitte organization
    • Terms of use
    • Cookies
    • Privacy
    • Privacy Shield
    • Accessibility statement

     

    © 2021. For information, contact Deloitte Touche Tohmatsu Limited.

     

    Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.