XaaS: Your On-Prem Infrastructure, Cloud-Like Consumption Solution

This webinar explores X as a Service (XaaS), a solution that lets businesses use cloud-like consumption models for their on-premise infrastructure. It highlights how XaaS offers financial flexibility, IT scalability, and business agility, featuring insights from Insight's experts, Ken Christensen and Tyler F. The discussion also includes real-world client success stories and covers key aspects like consumption-based pricing and aligning with cloud consumption priorities.

What is XaaS?

XaaS, or "Anything as a Service," is a model that brings the flexibility and consumption-based pricing of cloud services to your own data center. Instead of buying and owning hardware outright, you pay for what you use, similar to how you'd pay for a public cloud service. This approach lets you keep your infrastructure on-premises while still getting the benefits of scalability and financial agility.

Key Takeaways

• Financial Flexibility: XaaS shifts IT spending from large capital expenditures (CapEx) to operational expenditures (OpEx), allowing businesses to pay only for the resources they consume. This reduces upfront costs and financial risk.

• Scalability and Agility: The model allows for easy scaling up or down of resources based on demand, providing the agility needed to respond to changing business needs without over-provisioning.

• On-Premise Control: Unlike public cloud, XaaS keeps your data and infrastructure within your own environment, which can be important for compliance, security, or performance reasons.

• Managed Services: Many XaaS offerings include managed services, which can improve operational efficiencies by offloading routine IT management tasks to providers.

The Growth of XaaS

The market for on-premise consumption models has grown significantly. While many organizations have a "cloud-first" strategy, a large portion of the world's data still resides on-premises. XaaS addresses this by offering a cloud-like experience for on-premise infrastructure. Statistics show a substantial increase in the adoption of as-a-service models, with projections indicating that a majority of infrastructure will be consumed this way in the coming years.

This trend is driven by the need for greater flexibility and cost control. Businesses are realizing that while public cloud is great for new projects or unpredictable workloads, XaaS provides a valuable option for existing on-premise data and applications, offering a bridge between traditional IT and the public cloud.

How XaaS Works

XaaS operates on a consumption-based pricing model, where you pay for specific units of measurement, such as terabytes for storage or cores for compute. This differs from the traditional CapEx model where you buy and own hardware, often leading to over-provisioning.

Here's how it generally works:

• Unit of Measurement: Resources are measured in specific units (e.g., terabytes for storage, cores for compute, ports for networking).

• Flexible Consumption: You commit to a certain level of usage, but providers often offer extra capacity that you only pay for if you use it. This helps accommodate growth without immediate additional purchases.

• Fixed Rates: The price per unit is typically fixed for the term of the contract (e.g., one to five years), providing predictability for budgeting.

• No Ownership: The OEM (Original Equipment Manufacturer) retains ownership of the hardware, meaning it doesn't appear on your balance sheet as a capital asset. This is similar to how public cloud services operate.

• Integrated Services: XaaS can include various levels of managed services, from basic support to proactive management, all integrated into a single contract and monthly bill.

XaaS in Action: Real-World Examples

Demonstrating its versatility across different industries:

• Financial Company: A conservative financial firm with a mandate to move applications to the public cloud initially adopted XaaS for a one-year contract for their on-premise infrastructure. Over time, they realized the cost benefits compared to public cloud and began expanding their XaaS contracts to five years, adding compute and extending it to other areas.

• Manufacturer: A large manufacturer, a significant consumer of AWS services, started to experience high costs. They adopted storage as a service to complement their public cloud strategy, beginning with corporate data. This success led them to expand XaaS to all 50 of their plants worldwide.

• Technology Company (Semiconductors): This company had no intention of moving to the public cloud due to their specific needs. They embraced XaaS for its cloud-like experience on-premises, starting with certain functions and then expanding it across their massive global footprint, including compute, hosting, networking, and multiple types of storage.

These examples show that XaaS is not a one-size-fits-all solution but a flexible option that can be tailored to an organization's specific needs, whether it's complementing a cloud strategy, managing technical debt, or optimizing costs.

When to Consider XaaS

There are several compelling events that make XaaS a relevant option for organizations:

• Warranty or Maintenance Contract Renewal: As existing infrastructure approaches the end of its warranty or maintenance contract, it's an ideal time to assess whether a consumption model would be more beneficial than simply renewing or replacing hardware.

• Upcoming Renewals: Planning ahead for future renewals (e.g., one to two years out) allows for a smooth transition into a consumption model, layering new infrastructure into an existing XaaS program.

• New Projects: Starting a new application or project can be a great opportunity to implement XaaS as a proof of concept (PoC). This allows organizations to control costs, improve capacity planning, and build internal support for the model.

By leveraging these trigger points, organizations can transition to XaaS in a less disruptive way, optimizing their infrastructure and operations.

Managed Services and Flexibility

I These services can be integrated into the XaaS contract, providing a single monthly bill and simplified management.

• OEM Programs: OEMs offer programs to manage their products, guaranteeing SLAs and providing warranty support.

• Client Management: Clients can choose to manage the infrastructure themselves if they prefer.

This flexibility ensures that organizations can choose the level of management that best fits their needs, whether they want to offload all IT operations or maintain a hands-on approach for specific aspects. The goal is to provide options that are effective, efficient, and secure, adapting to each client's unique strategy and requirements.