Adoption of as-a-service or consumption-based models is increasing rapidly
International Data Corporation ’s (IDC) new report finds that “Anything as a Service”, or XaaS, is quickly becoming the preferred delivery model for several products, tools, and technologies. As per IDC Future of Digital Infrastructure 2022 Global Sentiment Survey (India, n=100), almost 40 per cent of Indian enterprises consider availability of consumption-based models as the most crucial factor when determining where to deploy their workloads.
With the increasing acceptance of cloud and SaaS delivery models among tech buyers, many tech suppliers are transitioning towards offering anything and everything as a service, with billing based on usage and consumption. This trend is further corroborated by the IDC Future of Digital Infrastructure 2022 survey (India, n=80), which found that more than 50 per cent of Indian enterprises track digital infrastructure and cloud service costs as their top KPIs, regularly monitored by senior-level management.
The adoption of as-a-service or consumption-based models is increasing rapidly, especially among organizations that aim to reduce costs, mitigate risks, enhance operational efficiency, alleviate IT staff workloads, and improve growth strategies. Moreover, the ongoing macroeconomic headwinds, such as recessionary fears, inflation, and geopolitical uncertainties, are likely to drive further adoption of XaaS. According to the IDC FutureScape: Worldwide Future of Digital Infrastructure 2023 Predictions — India Implications report, by 2026, 80 per cent of tech buyers in India will prioritize as-a-service consumption models for infrastructure purchases, to help restrain IT spending growth and address ITOps talent gaps.
Neha Gupta, Senior Research Manager at IDC India, said, “The future of digital infrastructure in India is evolving rapidly, and the as-a-service consumption model is a critical part of this transformation. As XaaS continues to gain popularity among Indian enterprises, it is evident that this delivery model will play a crucial role in shaping the future of digital infrastructure in the country.”
The benefits of the as-a-service model are significant for both tech suppliers and tech buyers. Tech suppliers need to promote their as-a-service offerings that are well-rounded, skill-driven, services-driven, and with strong partner relations. Being a trusted partner is also critical to differentiate services. On the other hand, tech buyers need to evaluate the relevance of a consumption model to their digital infrastructure based on their growth strategies and change in appetite. The as-a-service model provides a flexible, scalable, and cost-effective solution that addresses the unique needs of Indian enterprises. As such, it is poised to play an increasingly critical role in shaping the future of digital infrastructure in India.
IDC’s Market Presentation, Everything as a Service: Changing the Priorities of India Enterprises — The Rise of the As-A-Service Model, February 2023, Doc # AP49620322 explores the factors driving organizations in India to switch to an as-a-service or a consumption-based procurement model for their IT infrastructure in contrast to a traditional licensing model. The document also examines the relevance of a consumption-based model during a period when headwinds are strong, and organizations are reevaluating their budgets and priorities (business and digital infrastructure).