Tech-driven transportation can be divided into many subcategories, depending on, for instance, the type of payment, distance length, or open/closed distribution system, however, for the purpose of this post the adopted distinction will be customer’s involvement in transporting. Hence, the two main categories considered are platforms connecting drivers with passengers and vehicles available for self-contained transport. The most popular types of MaaS include bike sharing (most notably in China – Mobike, and in Europe – Nextbike), ride hailing , car sharing , ride sharing , as well as the recent global phenomenon of rapidly scaling electric scooters .

These offerings are neatly sliced up and portioned out to create customized services that meet the specific needs of each client at a price that makes sense for them. In this way, XaaS could be simply thought of as a combination of SaaS, PaaS, and IaaS offerings. INDEX, an industrial machinery and components company, is expanding its business to become a comprehensive supplier of digital customer services. Second, a subscription-based model is also a predictable and stable source of revenue for companies, which is especially critical during times of uncertainty – like a pandemic.

According a survey of C-level professionals switching to XaaS business model – 83% of companies listed increased income as the top benefit of transitioning from product vendor to service provider. Not far behind, CEOs pointed the opportunity of going to new, international markets as the second (69%), and expanding beyond the company’s core market as the third (67%) main reason to switch to ‘as-a-Service’. We are moving towards a XaaS future faster than we think, with 61% of C-level professionals claiming they have already made some changes to their business models in order to adapt to the Everything-as-a-Service Economy. That is largely due to the technological and generational momentum, as well as the stability in predicting MRR and increased profits. Users can enjoy the experience without worrying about maintenance and without the entry barrier in form of the initial investment.

XaaS business model

On certain occasions, we process your personal data when it is necessary for the performance of a contract to which you are a party, such as to provide services to you. We may also process your personal data to respond to your inquiries concerning our products and services. And third, from the customer perspective, it’s beneficial for anyone sensitive or reluctant to invest in large capital expenditures. A service-based model removes the need for companies to make significant investments in turbulent times while opening the door to new products and services at a reasonable cost that were previously out of reach. For smaller and mid-sized businesses this can make a world of difference – giving them access to new tools to compete and grow.

Switching To Xaas

The more users respect shared appliances, the less electric scooters will contaminate local pavements, lawns or rivers. When it comes to high operational costs, damaged vehicles are just one side of the problem, another is simply an expenditure of running a transportation business – fuel, drivers, or infrastructure. In the future, the rise of self-driving cars and popularisation of sustainable electric energy could solve at least a few of the operational issues.

It helps focus every critical process, function, and relationship of a business on meeting customer expectations, creating business value and driving sustainable growth in a digital world. Many consumer-facing organizations are finding ways to integrate data tools into their existing products to provide users with increased value. From a broader perspective, the move to XaaS and the servitization of products can promote acircular economy– especially in the manufacturing industry. In this sector, there is a shifting focus from creating a product at a specific point in time to the continued use of that product over an extended period.

Understanding where to start on the path to business model innovation is challenging, especially when you have an established business with various customer bases, revenue streams, and stakeholders. In the past 50 years, the averagebusiness model life spanhas fallen from about 15 years to less than five. And to survive in such a fast-paced environment, organizations must be agile, quickly adapting to changes in technology, market trends, and customer expectations. Moving to the more general, XaaS-related challenges visible in the mobility sector, two headaches seem to be the most painful – building the right scale and controlling online fraud. However, quite recently, a Chinese bike sharing giant Ofo, brought itself near bankruptcy, by overestimating its scalability potential and running into cashflow hurdles.

The Case For Transformation To Everything

These types of digital business models are the result of product/service digitization and the global shift to cloud-based technologies. Demand for service-based offerings is outpacing the need for traditional products. According to a survey by the Technology Service Industry Association , 48 percent of the 50 largest technology providers have seen product revenue flatten or decline in recent years, while 66 percent of them have experienced growth in service revenue. And the COVID-19 pandemic has only further accelerated this key transformation strategy. Argyle has disclosed Personal Information about Consumers for a business purpose in the twelve months prior to the Effective Date of this Policy to service providers, partners, vendors and affiliates. In addition, we may share personal information with third parties in connection with potential or actual sale of our company or any of our assets, or those of any affiliated company, in which case personal information held by us about our users may be one of the transferred assets.

This variant is also useful where security, regulatory or compliance constraints prevent the use of public environments. It allows users to deploy applications that have been built using languages, libraries, routines, frameworks, and services provided by the platform vendor. If we cannot verify your identity or authority to make the request, we will not be able to comply with your request. We will only use personal information provided in a verifiable Consumer request to verify the requestor’s identity or authority to make the request.

According to Straal report, globally the number of car sharing users has been flourishing by 76% annually over the recent years. In Asia that growth has been even more impressive, with users growing at an astronomical 200% rate. In the instance of platforms connecting drivers with passengers – the interface’s main task is to link the two parties while suggesting the optimal route and pricing. Fees settlement is often handled via the interface for convenience (mostly one-click card payments). This barely noticeable, seamless billing experience is a big contribution to the customer retention aspect, nonetheless, some of the biggest players like Uber, Taxify or Bla Bla Car, have been successful with implementing cash transactions on markets with low card penetration. By combining the platform provided by Zuora with the knowledge we possess, we aim to quickly realize the transformation of the business model of client companies.

  • “We needed to re-architect, which allowed us to question everything, including continuing to build our own datacenter-based solution.
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  • With greater ownership of the assets across their entire life, ensuring compliance and minimizing waste, energy usage, or carbon emissions makes sense for manufacturers; it also encourages product, material, and waste reuse of recycling.
  • After all, stunning profitability and predictability of revenue are the main advantages that encourage enterprises from roughly all segments of the market to transitioning from their traditional distribution models to the one based on access to value.
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  • For established businesses, transforming to consumption-based modeling calls for a fundamentally different way of doing business.

Everything-as-a-service model transformation allows customers the flexibility to consume and pay-per-use, but transitioning is complicated and challenging. Companies exploring consumption-based business models should think through the implications of the complex and interrelated business decisions they’ll need to make as they transition. A key feature of the cloud model is the ability to create an experimentation/improvement cycle at a lower cost.

Choosing A Suitable Business Model Strategy

A good ERP system will include thesebilling capabilitiesor can be purchased as an add-on to your existing ERP system and licensed separately. Recurring payments are a perfect choice for both customer and merchants for these types of services that are being purchased repeatedly. Loves learning something new everyday and exploring new & creative ways to approach customers. We aim to maximize the experience through personalized interaction and content provision for each customer. “We needed to re-architect, which allowed us to question everything, including continuing to build our own datacenter-based solution. We may have chosen to build new data centers, or … we could choose to sign a check for someone else to do”.

With this change comes a greater emphasis on the quality, use, longevity, maintenance, and disposal or recycling of the product. For established businesses, transforming to consumption-based modeling calls for a fundamentally different way of doing business. Current organizational capabilities may not support the new model, and entrenched, risk-averse stakeholders may be resistant to the required changes. In addition, short-term performance may need to be sacrificed for the sake of long-term success, which has significant implications both internally and externally.

After expiration of that period, the corresponding data is routinely deleted, as long as it is no longer necessary for the fulfillment of a contract or the initiation of a contract or for other lawful purposes. Over the last two decades, the as-a-Service model has revolutionized how technology resources are provisioned and consumed. From a consumption perspective, there has been a rapid migration to on-demand environments that can be provisioned through self-service, with elasticity to allow rapid scaling and ubiquitous availability through multiple access channels and with billing flexibility.


The cloud-enabled model is centred around a digital interface that governs the relationship between the provider and the user, seamlessly settles charges between parties, and, in the case of physical distribution, automates logistical dispositions. Although, the club of early adopters of the ‘as-a-Service’ approach to distribution consisted mainly of tech companies in need of a more sustainable way to sell software SaaS & HaaS , cloud infrastructure and application platforms , it has soon been noticed and adopted by other industries. Partnering with an expert in global services delivery can help your company — and your customers — transition smoothly as one model declines and the other grows. A global services delivery company has the capabilities and global reach to help you manage hardware, software, and services in nearly any region.

XaaS business model

We have deep knowledge of consumption-based business models and understand the challenges they present. We understand that modern businesses comprise a number of highly complex, interrelated systems, which is why we don’t view any transformational element in isolation. We can help you think through the implications of the business decisions you will need to make as you transition to a pay-per-use model.

What Is A Business Model? What Is Business Model Innovation?

They must also incorporate a new governance model for these elements, which will now be added to the traditional IT processes. It allows its users’ resources been provided such as processing, storage, firewalls, load balancers, and networks. Each user company has the responsibility of configuring and deploying the applications that consider appropriate.

Business models vary based on numerous dimensions – such as key offerings, target market, company resources, and business value chain – and are a critical component in driving a company’s business growth strategy. Implementing new business models in response to these changes is critical to the success of the organization. Business model innovation can open up additional lines of revenue, expand market share, and increase profitability. There are also some surprising, and unexpected, benefits emerging as well. Companies that have shifted their offerings to an XaaS model have been met with considerable success. They have been rewarded by consumers as well as investors, challenging conventional valuations and placing pressure on industry players that are retaining traditional business models, such as perpetual licensing and long-term contracts.

Kpmg Connected Enterprise

So we adopted, almost without noticing it, solutions like Facebook, Google Maps, Waze, and others. A Consumer has the right to request that a business delete any personal information about the Consumer which the business has collected from the Consumer. If we determine that an exemption applies, we will inform you and tell you why we are not deleting the requested information. The categories of personal information that the business collected about the Consumer in the preceding 12 months. The business or commercial purpose for collecting or selling personal information. The web site may provide links to third-party web sites or apps, including our social media pages.

It also requires a collaborative asset network where data and processes are shared. The importance of diversifying and adjusting business models to adapt in current market conditions is critical. There are many obvious benefits to businesses, but also some surprising advantages of XaaS that could have a broader impact on how business make things, how consumers use products and services, and the product/service life cycle. Anything, or Everything-as-a-Service is a product distribution model, where companies instead of selling products, shift into providing value as a service.

It’s clear that the XaaS business model will only grow as a dominant driver of transformation in the technology market. Developing strategic partnerships and a global plan for your XaaS endeavor helps future-proof your business against this rapid and dynamic market shift. This three traditional models of service meant great benefits for some time, however, in recent months the offer has multiplied and all kinds of components “as a Service”, each with better capabilities, more sophisticated, more disruptive, more innovative and smart than the previous one. Like never before, organizations have at their fingertips a variety of “pre-built” blocks that can use to model its path toward the long-awaited digital transformation; this offer of specialized components is what we call XaaS.

Estimating the total value of the XaaS market is extremely hard due to its diversity and dynamics but researchers claim that the original trio of S-I-PaaS players generated an astounding amount of $122bn in pure recurring revenues over 2017, and is very likely to reach $174bn by 2022. After all, stunning profitability and predictability of revenue are the main advantages that encourage enterprises from roughly all segments of the market to transitioning from their traditional distribution models to the one based on access to value. Cloud computing will generate disruption in the fundamental processes of organizations. In how they access technology, in the future speed of their technology adoption cycles, in changing the previous impact of immobilizing capital -versus an alternative of constant mobilization. IT Operations will take a more dynamic role by on-time resource allocation, and not a passive one of pressing buttons, running “scheduled” jobs, and look at consoles with dashboards and alerts.

■ Improve and provide our website, and our products and services generally. Occasionally, we may also use the information we collect to notify you about important changes to our web site, new services and special offers we think you will find valuable. To update your contact information or change your communication preferences, including to stop email, telephonic, or mail communications from us, please send us an email request contact us through the methods provided in the “Contact” section below. We may also process your personal data if necessary to protect your interests or the interests of a third party. One of the key benefits of implementing card payments to your payment methods, is that it simplifies both the sales process and your customers’ journey. Though today it is yet difficult to estimate the total worth of Anything-as-a-Service businesses, MaaS can serve as a perfect example of a successful industry transition that is gaining traction at an unprecedented pace.

However, in case of enterprises with smaller lobbying budgets, effective cooperation with local governments, which shows that MaaS not only does not pose a threat to the society, but can also contribute to improving lives of a local community. Finally, the new form of services brings the flexibility of upgrading/downgrading the plan according to one’s needs with very little cost. No problem, just add another member to the CRM plan and an extra $5 will be charged seamlessly. According to Deloitte’s survey, 69% of organisations using XaaS solutions admit that they have recorded noticeable spikes in ROI and lower operational costs. Depending on the product, the initial investment barrier could be barely a financial hardship (e.g. purchasing a light bulb) or a result of years-worth of savings (e.g. buying a vehicle). Furthermore, in the XaaS world, maintenance and uptime in on vendor, while the user can seat back, relax, and enjoy the journey.

In fact, our latest Subscription Economy Index found that subscription businesses grew revenues about 6 times faster than S&P 500 company revenues (17.8% versus 3.1%) from January 1, 2012 to June 30, 2020. In the world of composite computing, it will not be easy to say -for an application or a business process- where one service model ends and the other begins, or which deployment models it uses; You may use a combination of several of them . It may not matter the limits that theory imposes on us when it comes to addressing business opportunities. Hybrid solutions should be welcomed because they also allow a smooth transition from legacy applications to the new model. KPMG Connected Enterprise is a digital transformation approach, it’s industry-specific, and customer-centric.