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Technology today completely defines mainstream society because it makes people’s lives easier and broadens the horizons of possibilities. Apple’s once-novel slogan, “There’s an app for that,” has never sounded quite right. You can order groceries, see the doctor, or regulate the temperature in your home—all from the palm of your hand.
Technologies also bring ease and efficiency to small and large companies. Global manufacturers have adopted Metaverse-like technologies to design, plan, and test operations in their organizations future factories before the costly construction phase begins. Even restaurant franchises are exploring new technological possibilities Drive-through with artificial intelligence attract serious attention. Beyond maximizing operational efficiencies, digital technologies can increase the value a company can offer its customers – and this is increasingly being done through the Anything-as-a-Service (XaaS) business model.
Much like smartphone apps make everyday tasks easier, the XaaS model makes achieving the outcomes you and your customers want more practical and feasible. In this model, a company owns, supplies and manages a range of product offerings, including various hardware and software solutions. Especially with the addition of digital technologies, XaaS business models generate more value for both old and new companies.
according to a current report from EYMore than 90% of the companies that took part in the survey now generate at least part of their sales with XaaS models. Due to competitive pressures and market changes, the number of companies generating more than 80% of their revenue from XaaS is expected to increase from 3% in 2022 to 19% in 2026, creating great momentum for the XaaS model shows. From greater customer satisfaction to repeatable revenue streams, organizations that rethink how they deliver value through an XaaS lens can achieve sustainable success in today’s rapidly evolving macrodynamics.
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Create a one-stop shop that maximizes customer satisfaction and creates repeatable revenue streams
Today’s economic climate is causing many companies to rethink the way they buy products and services. What used to work—like making one-time purchases from multiple vendors and paying upfront for each vendor—is now inefficient and expensive.
This is especially true for small and medium-sized enterprises (SMEs), which cannot leverage economies of scale but account for almost 90% of all businesses worldwide. Not only are these siled products expensive, but they are rarely able to solve complex business problems because they fail to take into account the broader business perspective and future integration challenges.
For example, retail businesses that want to reduce their operating costs by using less energy are likely to need more than just new lightbulbs. They also want to invest in energy-efficient heating and cooling, smart thermostats, and a way to automate and monitor their energy use in real-time to ensure they’re hitting their energy-saving goals. By viewing each solution as part of a whole – rather than as a single entity – XaaS models can minimize cost and complexity and shorten project timelines to meet customer goals.
Companies that provide their offerings via XaaS business models offer far greater added value, especially SMEs. By directly linking the opportunity for recurring revenue to the outcomes customers want, the XaaS model creates a single point of contact for customer satisfaction and repeatable revenue streams, while ensuring full visibility into investment results. The ability to present ongoing value also enables XaaS providers to build stronger and more resilient long-term customer relationships.
Grow with your customers
The XaaS structure is designed to grow and scale as a customer’s needs change or expand. This gives service providers an incentive to continuously optimize and improve their offerings through key insights and insights they gather in the workplace. This flexible model is optimal for today’s macro climate, which increasingly forces companies to adapt to changing requirements in the face of new market catalysts.
For example, businesses large and small are under increasing pressure to become more energy efficient and resource conscious as climate change and other environmental challenges become more of a public focus. Energy XaaS companies, known as Energy-as-a-Service, use intelligent monitoring systems to learn and identify where energy is wasted to maximize energy savings and reduce total cost of ownership.
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A win-win-win situation for companies, customers and the economy as a whole
Today’s XaaS capabilities and changing macro dynamics make outcome-based services a more attractive way to meet customer needs. As an outcome-based model, XaaS balances the economic cost of a solution with its tangible and intangible benefits accruing over time, allowing stakeholders to focus on delivering long-term outcomes rather than spending upfront capital. This is at odds with one-off “pre-purchase” models, which have the unfortunate consequence of hampering optimization of value outcomes.
At its core, XaaS provides organizations with the flexibility and sustainability to continuously innovate and scale without being constrained by product boundaries to best meet customer needs. To thrive in today’s economic climate, business leaders must pursue new and holistic growth strategies that align their business goals with those of their customers.