How do you solve for the “X” in XaaS? Join ISG’s CMO, Paul Gottsegen, as he interviews ISG Advisor, Prashant Kelker, on which XaaS trends and predictions you should be paying attention to in 2022.
X as a service, right? “X” is… so there's infrastructure applications, and there's kind of the common ones, but I've noticed that it's getting more narrow and more innovative of what that “X” is or could be. XaaS. Think proposal as a service, for example.
Talk about some of the “X” as-a-service that you're seeing, the ones that are just starting to peek their heads out as we head into the New Year.
I'm going to build on the “peek its head out” idea, because there's one curious thing we are looking at under sustainability and green efforts, and that is retained product ownership.
So, what happens if you are GE, and you stop selling your engines but start renting your engines out to airlines? That's product as a service. Now, you can apply the product-as-a-service analogy to literally everything, think dishwashers. Think phones, think anything.
Retained product ownership is a really, really large trend we should be watching, because the more complex the product is, the more downtime becomes precious, so you know should be avoided. So, think about product-as-a-service. Think about if that product-as-a-service is connected and suddenly imagine having a digital twin of that product on your dashboard so that you can do preventive maintenance. If you could use that to avoid downtime, think how much you could charge for that conditional monitoring agreement. You've just sold a connected service on top of a product, which you have also sold.
Now, what could happen here is that – well, the good side is that you know there's the revenue. That’s the upside to it. The downside is certainly the asset still remains on your balance sheet, so there are a few things you still need to look at: the income sheet, the balance sheet, if there is a significant impact of this new connected service, but I think that's where the XaaS is going.
Now you can do this only if you delayer things so you can take your product as a service. You could take your product platform as a service. You could take certain business cases and say it's your connected future use cases as a service. There's no limit to what you can do if you delayer.
OK, so that's back to the paradigm word.
It's a different paradigm of thinking of everything as a service, even if it's like a dishwasher or washing machine or an aircraft engine, which obviously is something you can touch there.