April 12, 2011 – Customer expectations resulting from the increasing speed of cloud computing deployment and investment have led to a clamor for more as a service options from technology vendors, according to a new report from Accenture. However, the consultancy notes that there are differing responses and levels of success in the new “everything as a service” (XaaS) marketplace.

In its report, “Where the Cloud Meets Reality: Operationally Enabling the Growth of New Business Models,” Accenture found that big technology companies quick to adopt software, platform, infrastructure and other as-a-service business models have the best shot at financial returns and reduced complexity for customers. Along with cloud adoption and customer awareness, as a service growth is being pushed by emerging markets, budget reductions and shifts from capital to operating expenses, and the integration of hardware and software, the report states.

Tim Jellison, Accenture analyst and one of the authors of the report, says there are many instances of quick return on investment for adopters of XaaS opportunities, both at large vendors and recent startups. But as it stands, most technology providers do not have the options in place or fully developed to meet the expectation of the more than $100 billion in as a service spending foreseen in the next four years, Jellison says.

“We think a lot of our clients and a lot of tech firms out there have dramatically underestimated the magnitude and investment needed to really bring these new business models to market and operate them profitably,” says Jellison.

This method of numerous operating models, such as one-size-fits-all and a la carte flexibility, have given providers such as Microsoft, Cisco and Google a foot in the door with as a service opportunities, according to the Accenture report.

Along with setting up business models, providers need to increase their own research and development in the field, map out governance models for key trade-off decisions, and plan for changes such as when a “‘product’ becomes a monthly subscription,” Jellison advises.

For more from Information Management on recent SaaS research, click here to read this recent story.


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