How Small Businesses Can Leverage Cloud and XaaS for Growth and Profitability



Amid the COVID-19 pandemic, the cloud computing ecosystem has been both a driver and a beneficiary of digital transformation.

Arguably the most significant business benefits of adopting a cloud environment have been reduced operating expenses and improved cash flow.

According to a survey by Microsoft India and the Thought Arbitrage Research Institute (TARI), Indian SMEs can improve their cash flow by up to 308% with the agility and flexibility afforded by using the cloud.

Additionally, around 96% of SMBs have seen a positive impact on their operating expenses within two years of using the cloud, and 86% of SMBs believe the cloud is a secure platform.

Until a few years ago, most companies managed their developed or licensed software and applications in-house by installing them on desktops or on a server at their premises. Today, SMBs use a cloud environment to access new applications on any device from anywhere in the world.

According to a Nasscom report, cloud spending in India will exceed $ 7 billion by 2022. As mobility becomes important, cloud computing enables organizations to stay focused on their core business and their customers, while learning, innovating and taking advantage of the latest technologies to evolve.

What is cloud computing and XaaS?

Simply put, cloud computing means storing and accessing data, software, and applications through the Internet instead of the desktop or server hard drive.

In other words, cloud computing involves the provision of hosted services on demand over the Internet, generally categorized into three main categories: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and software. -as-a-Service (SaaS), resulting in Anything-as-a-Service (XaaS).

In addition, cloud computing is used by technology providers to host their applications, tools and services for others to access and use on usage-based or subscription-based (XaaS) payment methods.

Small businesses can take advantage of XaaS offerings to achieve digital transformation due to the flexible payment terms of this model.

How can XaaS benefit small businesses?

For small businesses, one of the main advantages of using XaaS is that they can benefit from digital applications and services only offered by large enterprises before the emergence of cloud computing.

This allowed them to survive and grow more easily with large companies in highly competitive environments.

Develop the customer base

XaaS enables access to resources and data from anywhere through any device, enabling small businesses to scale faster. It can improve performance, customer service and long-term customer relationships.

The XaaS model, supported by cloud technology and integrated software applications, can help businesses enter new markets and improve their customer base at a lower cost.

Improve business processes

Emerging technologies are transforming business processes and models, especially amid the COVID-19 pandemic.

For example, the COVID-19 pandemic has made it imperative for retailers to go online or hybrid to survive and thrive. The change in retail model has been facilitated by digital technology.

A personalized XaaS strategy helps streamline remote operations to recruit and empower employees from anywhere, work from home, hold remote meetings, or serve the customer.

A company can quickly access new technologies, depending on changing demands, without worrying about the upfront investments.

Shift capital spending to operating expenses

Cloud computing has enabled businesses to reap the benefits of cloud-based solutions through a model where they pay for what they use and when they are used on a subscription basis.

Spending, including capital spending (Capex), has now evolved into operating expenses (Opex), facilitating the accelerated digital transformation of small businesses, which until then were the preserve of large companies with deep pockets.

Transfer resources to higher value-added projects

Organizations that move to an XaaS model to streamline processes and operations can free up their IT and other resources for more value-creating innovations.

According to Deloitte, around 75% of companies say that XaaS now makes up more than half of their company’s enterprise IT. XaaS offers more users, regardless of small or large, access to cutting-edge technology, democratizing innovation.

Small businesses with limited cash flow and limited resources can leverage XaaS to focus on projects that can transform their business, leaving routine functions to cloud-based services.

Considerations before launching the XaaS strategy

Transitioning to an XaaS model is a strategic decision for any business. Change can be long and painful from start to finish. The planning process is essential, so companies should do due diligence before selecting tools and services.

Essential steps to keep in mind when implementing the XaaS strategy:

  • Map your vision and goal: You need to have a clear vision of business goals after adopting XaaS. You need to identify concrete quantitative and qualitative metrics, which can include customer growth metrics, customer satisfaction scores, response rates, customer churn rates, profitability ratios, etc. to measure the benefits of the XaaS strategy.
  • Decide on a starting point: It is difficult and risky for businesses, especially small businesses, to embark on digital transformation all at once. So you need to identify and start with the most critical pain point. Consider a low risk starting point that offers a high return, if possible. For example, if your customers want you to have a particular digital solution, and you think it could be beneficial, start there.
  • Change management: Since all functions of an organization are affected by the change, all relevant stakeholders should be involved in the decision-making and planning stages so that the XaaS transition can be driven towards a common business goal. . The involvement of representatives of each group in the decision-making and planning phases facilitates the adoption of digital throughout the company.
  • Measure the benefits: After deployment, keep a close eye on the KPIs established in the planning process. Measure, make changes and adjustments, and share the results across your organization to build excitement in the second stage of the XaaS strategy.
  • Possible downtime: The internet connection is sometimes interrupted and when this happens it may affect the services. You should have backup plans to deal with such possible situations.
  • Performance issues: In the event of downtime, you should keep in mind the possibilities of poor performance due to bandwidth, latency, data storage, and recovery time issues.

New normal

There will be no reversion to the old ways of installing, implementing and using technological tools and services from a physical server on your premises.

Organizations, especially SMBs, need to assess their current and future needs in line with their plans and map them to the XaaS strategy to stay afloat and scale their business.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)


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