Emerging technologies as-a-service bring a competitive edge

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 organizations 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 edge computing—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 visualizations—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 analyze 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 underutilized? Review where and how your organization 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.