XaaS Starts to Take Its Place: IAITAM Predictions Begin to Come to Fruition

In Featured Articles, IAITAM News You Can Use by IAITAM

Imagine an IT environment where all the software was tagged in its code to identify exactly what it is. Then imagine a machine capable of reading those tags and automatically filing that information for easy and readily accessible use.

What just was described is almost like what a discovery tool and repository do now. The difference from the above scenario compared to what they do now is that the discovery tool finds more specific information about the IT assets in real time and reports all that information back to the repository. It then learns how to make the process more mature and efficient, or an IT Asset Manager can help guide it.

Such could be the future of IT Asset Management (ITAM). It’s starting to become a reality, and IT Asset Managers should be prepared for the day it fully turns into reality.

In just the first month of 2020, several major cloud service providers have announced tethered relationships with other vendors to combine the various pieces of an IT environment into one, central location. Some of this already began prior to the start of the new year. But now, there are more options, and the marketplace is starting to open as technology continues to progress.

This is XaaS – Everything as a Service. It combines Infrastructure as a Service (IaaS), Software as a Service (SaaS) and Platform as a Service (PaaS), as well as other services that are hosted from a cloud environment. XaaS is more than that, too. The same providers that are beginning to form partnerships are using Artificial Intelligence (AI) and Machine Learning (ML) to improve the integration and user experience.

While there are pros and cons to multi-provider IT environments versus a one-stop shop for everything, the concept of a centralized choice for all services has the potential to change the landscape of how IT Asset Managers run their programs. From discovery tools that would be more effective and repositories that integrate and learn as they collect data, to contract negotiations, compliance management and vendor management, the scope of the industry is changing.

The International Association of IT Asset Managers, Inc. (IAITAM) predicted that XaaS would begin to become more commonplace in 2020. Trends in the industry already started showing this to be the case as cloud vendors have been building more into their models to entice customers to come on board. Now that there are more options, putting everything in one basket starts to add value to the program and the organization because it continues to allow the power of negotiations.

But before a practitioner cleans the slate and starts to push for acquisitions of these models, there are several factors to consider. Each must be vetted carefully.

Partly Cloudy

Right now, three cloud services dominate the enterprise market: AWS, Azure and Google. Oracle also is a player in the game, as are some other vendors. All already offer pieces of XaaS, but now they are starting to work together and integrate ML and AI – along with other tools – to improve the experience and offer options that were unattainable before.

For example, AWS offers integration with Microsoft Office 365 and other tools. Oracle and Microsoft have a partnership to take some of the tools from Microsoft and some from Oracle to work together within Azure. And Google recently announced it was offering Secret Manager – a centralized, secure database that encrypts and stores APIs, passwords, certificates and audit logs. Although still in its beta form, it is available now to Google cloud service providers. Google’s competition also offers these services, but Google’s is global as opposed to regional.

Researchers also found a better way to deploy ML in the cloud. AWS offers this service already, but the new deployment uses open-source code that can work on any cloud-based environment.

With a full suite of tools available on cloud providers and intelligent design being added, it may not be long before several IAITAM KPAs – specifically Program Management, Policy Management, Acquisition Management, Compliance Management, Vendor Management and Disposal Management – become better and more automated.

Still, pitfalls remain. Switching to one of these options is not an easy choice. The contracts containing Terms & Conditions (Ts&Cs) often reside on URLs, and some contain conflicting information about which vendor is responsible for what if something happens to the data or if there is a cloud outage. And while the technology that would improve discovery and compliance exists, it is not being used to its full potential for the benefit of an ITAM program.

Mind Your Ts&Cs

Even with the partnerships and technology forming, these cloud providers offering intelligent and integrated XaaS still are competitors. Because an IT Asset Manager’s goal is to provide the best value to the organization and improve the bottom line, the focus should be on a contract that serves the organization’s needs while also satisfying the vendor of choice.

Negotiations and long-term, hardcopy contracts should be essential. This will help mitigate the chance of being out of compliance. However, it is best practice to be cautious even with a hardcopy. Ts&Cs changed on a URL can override a previous agreement.

IAITAM also predicted that contract management and buying controls would become part of the job in 2020. This is where that idea would come into play.

While XaaS is an “everything IT” concept, the SaaS component likely is what would be the most interesting to IT Asset Managers. Having a platform, infrastructure or other tools could add value to a program, but some studies suggest the SaaS components might be costing organizations more money than traditional, locally installed software applications.

One source reported that 38% of SaaS licenses in an organization go unused. Employees also often install SaaS apps themselves and then pay for them using an organization’s credit account. Furthermore, some contracts have a “honeymoon” period where the price remains low for a short period of time, and then the price goes up significantly.

Longer-term contracts may be more beneficial when moving any portion of an IT environment to a cloud-based model. The average contract length is about 1.4 years. Some suggest contract terms of more than 2 years, while others say 3 or more years is best. This helps the organization calculate the Return on Investment (ROI) of purchasing IT assets through a service rather than keeping those assets on site.

The models also shift the purchase of IT assets from a Capital Expense (CapEx) to an Operating Expense (OpEx). That occurs because an Acquisition Manager is purchasing a subscription-based service rather than a physical asset. It can affect the bottom line at the end of the year when the Finance Department reconciles the IT budget and discovers that something that was a tax deduction no longer is.

History Repeating

The ongoing trends might sound familiar because they happen all the time. The best response is to be proactive rather than reactive when they occur.

To use another industry as an example, consider retail shopping. Brick-and-mortar stores dominated the market until the past two decades. Now many storefronts have closed, and entire malls have shuttered, as a result of a shift to shopping online.

Online shopping is changing, too. Some retailers are using a hybrid of online and traditional models. Amazon’s shopping and distribution arm was more popular than shopping at Walmart. In 2018, 53% of shoppers favored Amazon. Recent studies show that the number has dropped to 45%. The competition shifts have to do with a variety of factors. To stay competitive, Amazon now is opening Amazon Go convenience stores, which have a physical location but use a hybrid buying experience that makes shopping at them more like buying through the company’s online platform. In this sense, the company found that to try to stay ahead in areas where Walmart was beating them, it needed to add physical locations to its range of online services.

XaaS – and the cloud in general – essentially is outsourcing. That was popular in the 1990s. It’s also like old mainframe and dummy terminal systems that were the mainstays of most companies through the mid to late 20th century.

The technology will continue to evolve, but the basics remain true. As IT Asset Managers, practitioners should be aware of the changes. However, an adage applies here: The more things change, the more they stay the same. ITAM best practices and the KPAs apply no matter how the technology changes.

References:
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