Technology-as-a-Service: A new world order for the enterprise in 2017

New year, new you technology. To kick off 2017 right, we’re here to enlighten you on all the technology trends, disruptors and themes this next trip around the sun will bring. (Check out what happened in 2016 here.) Each week this January, we’ll share a new blog post from our experts about what to expect in 2017 and how you and your business can prepare. Happy New Year! 

What do you think about more companies making the shift to TaaS? Let us know on Twitter with #TechIn2017. 

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In August 2008, Netflix experienced a major database corruption that made it impossible for the company to ship DVDs to its members for three days. That incident convinced the company that they needed to move away from vertically-scaled single points of failure (like their server centers) to more reliable, horizontally scaled cloud-based services.

The effort to move Netflix’s systems and database into the cloud took eight years, and last year the company closed its last data center. Netflix’s technology stack is now 100% based in the cloud. The shift has made it possible for Netflix to scale its operations to more than 130 countries and offer new data-heavy services—things they couldn’t offer when they had to rack the servers themselves.

And Netflix isn’t alone in its growing reliance on Technology-as-a-Service (TaaS) providers. Amazon, Adobe, SAP, Stripe, AirBNB, Intuit, Comcast and hundreds of other forward-thinking organizations have turned to TaaS to decrease time to innovation, reduce costs, scale storage and computing needs, improve uptime and expand their technology footprint around the world.

Still other organizations with products like Adobe Creative Cloud, AutoCad 360 and Exchange Online have shifted boxed software and hardware to the cloud, creating successful TaaS products for their customers.

TaaS: Benefits for companies and customers

Technology-as-a-Service represents an enormous opportunity for both suppliers and the customers who rely on their services. TaaS allows customers to access technology on-demand. Instead of purchasing large technology assets to grow into (and booking the capital expenditure), an organization purchases access to technology resources that meet the current need. If needs change, access can be scaled up or down with the demand.

More and more businesses are taking advantage of advances in technology that make TaaS possible. Improvements like near-ubiquitous high-speed broadband, cheap data storage, simple payment solutions, micro-services, containerization and growing acceptance among both consumers and C-level leaders of subscription model services. All together, these developments create a technology eco-system where software, platforms and services have moved out of office closets and wholly-owned server centers and into the cloud.

In addition to purchasing technologies as services, if your organization has a technology product, you should consider moving your tech into the cloud as a service. Buyer behavior is changing. Customers are buying fewer physical assets and “off-the-shelf” software products. Today, more than ever, they want technology services that allow them to scale their use at a low cost of entry.

And while buyers’ behavior is changing, the real advantages of moving to TaaS for tech suppliers include the ability to add features and automatically update users to the latest version, capture recurring revenue (making business more predictable), decrease the number of supported products and increase flexibility and scalability.

TaaS: Making the move to the cloud

But, it’s not as simple as moving your existing software stack into the cloud. That approach creates more headaches than it solves—which is why Netflix took nearly eight years to complete its move from its data centers to TaaS suppliers. They completely rebuilt their software from top to bottom to take advantage of the new technologies.

Like Netflix, as your organization migrates critical functions to TaaS, you’ll want to rearchitect parts of your offering to take advantage of cost and efficiency gains that containers and micro-services may provide. Cloud providers like Microsoft Azure and Amazon Web Services offer great scale out alternatives to traditional datacenters. Additionally, you’ll need to architect your technology to support multiple tenants, scalability and redundancy. And thankfully there are some great solutions to help you orchestrate all these technologies like Kubernetes, System Center and/or Docker Swarm.

From a dev perspective, building code that is both technically scalable and allows for development scalability (more developers working on a single application) is another key to a successful transition. And, importantly, TaaS doesn’t remove the need to monitor compliance and security. You don’t have to do it alone. The most experienced providers are way down this path—most TaaS solutions are designed to safeguard sensitive data and protect against attacks, but you need to make sure you are focused on the security vectors your cloud providers aren’t.

If you’re moving to a Technology-as-a-Service offering, the organizational impact will be felt far beyond your IT and dev teams. The shift to TaaS can affect how your sales team is structured and compensated. The finance team may need to adjust to new revenue recognition models. The service team will have to change their approach to solving your customer’s challenges. Even your marketing team’s playbook will change. 

TaaS: Prepping for the organizational shift

How do you prepare for such a strategic change? Keeping up-to-date with the latest information and training is important. Tools like on-demand training can help your development and IT teams build the skills and expertise needed to make the move. Hack-a-thons or hack days give teams the opportunity to experiment, develop new skills and fail with projects that aren’t critical to your organization’s success. And of course, your executive team needs to stay on top of the risks, progress and impacts that this shift in strategy will create.

2017 is the year of IT efficiency and leveraging the full extent of the cloud. And you can take the first step toward making that happen by moving more of your services to TaaS.

Learn more: Finding your way in today's rapidly changing tech environment