Emerging technologies as-a-service bring a competitive edge has been saved
Cover image by: Viktor Koen
Limited functionality available
Over the past decade, organizations 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 organizations.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 organization 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 organizations 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 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
To build and maintain competitive advantage through the use of XaaS, consider the following:
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.