Why Businesses are Moving to Everything as a Service

Adopting an XaaS business model may help maximize agility and speed to market, but there are challenges involved with doing it right

Johan Arts
Why Businesses are Moving to Everything as a Service

Today’s IT leaders face a variety of challenges, including economic uncertainty, geopolitical conflict and supply chain interruptions. To address these challenges, they’re looking for ways to maximize agility and flexibility, so that they can expand their digital infrastructure and roll out new services quickly. In addition, they need to achieve that goal while keeping their CAPEX spend manageable.

The 2022 Equinix Global Tech Trends Survey (GTTS), which compiles responses from 2,900 global IT decision-makers, provides key insights about how and why organizations are pursuing digital transformation to future-proof their businesses. According to the GTTS, one way IT leaders plan to increase agility and overcome complexity is by adopting an Everything as a Service (XaaS) operating model. The GTTS results found that 71% of global IT leaders said they were moving toward an XaaS model.

Forrester Total Economic Impact™ of Equinix Digital Services

Read the full commissioned study conducted by Forrester Consulting on behalf of Equinix to see the detailed benefits realized by Equinix customers and understand the framework to evaluate the potential financial impact of Digital Services on your organization

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How can XaaS help address modern business challenges?

Those who plan to move to an XaaS model highlighted a variety of benefits they expected to gain by doing so:

  • 65% said it would simplify their IT infrastructure
  • 56% said it’s more flexible and would allow them to cancel or add elements as needed
  • 49% said it would reduce costs

It’s noteworthy that the GTTS results around XaaS adoption differed significantly across regions. For instance, only 62% of IT leaders in the Europe, Middle East and Africa region (EMEA) said they were moving toward an XaaS model—significantly lower than the global number.

However, the results also show that 16% of EMEA IT leaders answered “don’t know” when asked if they’d be moving to an XaaS model—significantly higher than other regions. Rather than ruling out a move to XaaS outright, many EMEA IT leaders seem to be approaching it cautiously and perhaps looking for guidance on how best to make the transition.

Would you say that you are moving toward an Everything as a Service/Anything as a Service (XaaS) model?

EMEA IT leaders also differed from their global counterparts when it comes to rating the potential benefits of XaaS adoption. For instance, at only 34%, they were by far the least likely to say they found the idea of a “one-stop shop”—getting all their required services from a single provider—appealing.

What concerns do businesses have about moving to XaaS?

While GTTS participants clearly recognized the benefits of moving to an XaaS model, they also expressed some hesitations about making the transition. Again, IT leaders that plan to move to XaaS had many different concerns about doing so:

  • 37% said it would increase their costs
  • 35% said they’d be concerned about the cybersecurity measures XaaS providers have in place
  • 35% said having everything with one provider would put them at risk if that provider’s service went down

These results show that many of the IT leaders that have decided to move to an XaaS model don’t view it as an easy cure-all for the challenges they face. They recognize they need a carefully planned strategy to make the transition while also mitigating potential drawbacks.

When it comes to their concerns about adopting an XaaS model, EMEA IT leaders also differ significantly from their counterparts in other regions. For instance, 28% of them said they were concerned an XaaS model wouldn’t offer enough opportunity to customize services to the specific needs of their business—significantly higher than other regions.

62%

In the 2022 Global Tech Trends Survey from Equinix, only 62% of EMEA IT leaders said they were moving toward an Everything as a Service model. This was significantly lower than the global average.

EMEA IT leaders face unique challenges

These statistics raise an interesting question: What is it about the digital business landscape of EMEA that makes the region unique when it comes to XaaS adoption?

It seems likely that stricter regulations around data privacy and data sovereignty in the European Union may play a role in making businesses more hesitant to rely on external providers for key services. This idea is backed up by the fact that EMEA markets outside of the EU are showing far less hesitation: In the United Arab Emirates, 85% of IT leaders said they were moving toward XaaS, while 74% of IT leaders in Africa said the same.

Moving to an XaaS model would require European businesses to share their data freely with external service providers. If those XaaS providers don’t take the proper precautions to protect that data, it would create noncompliance risk that would be passed on to their enterprise customers. Equinix is helping address these concerns by joining the Gaia-X initiative to support the development of a sovereign digital infrastructure for European service providers and enterprises.

How Equinix Digital Services can help simplify XaaS in EMEA

With a cloud-adjacent infrastructure, businesses can move the right data sets to the right partners at the right time. This helps them make the most of services from external providers without placing their data at unnecessary risk.

Equinix Digital Services can help support cloud-adjacent infrastructure. Equinix Fabric™, our software-defined interconnection service, and Network Edge, which offers virtual network function (VNF) devices from top vendors, can form the upstream layer that connects the data hub to cloud and XaaS providers and the downstream layer that connects it to metro edge locations. Equinix Metal®, our Bare Metal as a Service offering, can help customers quickly set up dedicated compute and storage capacity in edge locations, thus enabling a holistic edge-to-cloud approach to acquiring needed services.

Equinix Digital Services can be used in a manner that complies with European data regulations. For instance, a customer could:

  • Store data within one of our Equinix IBX® colocation data centers in Europe
  • Take advantage of Equinix Metal for compute services on demand
  • Move data to service providers within Europe using Equinix Fabric interconnection or Network Edge VNF devices

At no point in this scenario would the customer ever have to give up sovereignty over their data.

To learn more about how Equinix Digital Services can help provide flexibility and agility benefits while also decreasing costs, read “The Total Economic Impact™ of Equinix Digital Services,”[1] a commissioned study conducted by Forrester Consulting on behalf of Equinix. Among other benefits, the study found that virtual infrastructure supported by Equinix Digital Services improved speed to market 10x over physical infrastructure deployments.

 

 

[1]The Total Economic Impact™ Of Equinix Digital Services,” A Forrester Total Economic Impact™ Study Commissioned by Equinix, Forrester Consulting, September 2022.

 

 

10x

According to a Forrester Consulting study conducted on behalf of Equinix, virtual infrastructure supported by Equinix Digital Services improved speed to market 10x over physical infrastructure deployments.

Johan Arts
Johan Arts Senior Vice President, Sales - EMEA
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