Why 6 Top Execs See XaaS As One Of 2023’s Biggest Opportunities: Cisco, HPE, Lenovo
Top exexcutives from some of the largest tech companies in the world have pinpointed XaaS as one of their biggest investment areas and a massive opportunity for partners in 2023 as businesses seek out more flexible, consumption-based IT solutions.
IT culture is shifting away from ownership in favor of flexible, consumption-based tech solutions that can be immediately scaled up and down and spread around geographically. Enter the Everything-as-a-Service (XaaS) model.
Migrating to an XaaS framework for IT lets businesses accelerate their digital transformation strategies, while staying within budget. It’s a trend that customers are increasingly asking about, and it’s been on the radars of some of the largest tech giants for several years now. Now is the time, these companies say, to move XaaS from concept to cash.
XaaS can include compute, storage, security, and networking as a service (NaaS) solutions, to name a few. Networking giants like Cisco Systems and Aruba Networks are developing NaaS solutions, while security specialists, like Sophos, are going big with Cybersecurity as a service (CSaaS) offerings to help businesses adjust as quickly as possible to the ever-changing threat landscape.
As part of CRN’s CEO Outlook 2023 report, we asked the CEOs at some of the world’s biggest IT companies about key investment areas and the biggest market opportunities they plan to tackle this year. As predicted, a handful of leaders specifically called out XaaS and consumption-based IT. Here’s what these top executives had to say about the XaaS trend, why it’s increasingly appealing to their end customers and why their partners should be building practices around XaaS in 2023.
Phil Mottram, EVP and GM of HPE Aruba Networking
There is a culture shift happening right now and the increased value consumers are placing on “experiences” over “things”, and the decline in needing to “own something” has already touched our everyday lives. This same shift will begin to play out in the enterprise as well in the coming year, with organizations being less focused on devices and capex, and more focused on the business outcomes of their technology investments. Organizations want greater financial flexibility and cost predictability, while being able to increase IT efficiency and keep pace with innovation. A flexible infrastructure consumption model allows for all of this. For those organizations that aren’t fully ready to take the plunge, flexible consumption models provide the option to “try before buying,” so that enterprises can adopt the new model or not at their own pace. This will drive a big increase in demand, and therefore market opportunity, for consumption-based services like [Network as a Service] NaaS in 2023.
One of my top priorities for this year is our NaaS offerings. With tightening economic conditions, IT requires flexibility in how network infrastructure is acquired, deployed, and operated to enable network teams to deliver business outcomes rather than just manage devices. Migrating to a NaaS framework enables IT to accelerate network modernization yet stay within budget, IT resources, and schedule constraints. In addition, adopting a NaaS strategy will help organizations meet sustainability objectives because leading NaaS suppliers have adopted carbon-neutral and recycling manufacturing strategies.
Chuck Robbins, CEO
Trusted partnerships are critical now more than ever, and as customers require greater simplicity, flexibility, and a faster return on their IT investment, Cisco and our partners are prepared to deliver the right business outcomes for our customers. Together, we are perfectly positioned to meet our customers’ technology needs across hybrid work, security, applications, networking infrastructure and beyond. An important part of enabling customers to deploy their own technology strategy is offering them options in terms of where they purchase our products and services, and how those are delivered to them. For example, we continue to accelerate our as-a-service offerings and partner managed services, a $113 billion opportunity for Cisco by 2025.
Partners are an essential element of Cisco’s strategy, and our focus is on helping them increase their value so they can play an even bigger role with our joint customers. We need to help them transform their engagement with customers and build new business models that enable as-a-service consumption and managed services capabilities throughout the customer lifecycle.
Dan Schwab, Co-President
We’re focused on helping our partners capture the XaaS opportunity. This opportunity was valued at $245 billion in 2021 and is expected to grow at 23 percent through 2030. Distribution is in a perfect position to aggregate this opportunity for the channel, and D&H has an outstanding vendor agnostic program and platform that makes it easy for VARs and MSPs to move XaaS from concept to cash. We recently introduced the D&H XaaS Configuration Tool enabling VAR and MSP partners to build a sales proposal attaching services and software to hardware devices and receiving instant pricing. The speed of the sales process is key to success. Partners can integrate their own services or leverage D&H’s expanded professional services capabilities. The program also offers flexible financing options including cash flow acceleration to improve profitability for our partners. While the XaaS program is especially popular with client devices, we’re seeing an uptick in utilization across our entire technology portfolio including collaboration, ProAV, security and data center solutions. We have a fully staffed XaaS team and will continue to invest in resources and our automation platforms such as the D&H Cloud Marketplace to help our partners capture the XaaS opportunity.
Antonio Neri, CEO
The biggest market opportunity for HPE is to be our customers’ trusted partner, helping them leverage our edge-to-cloud strategy and HPE GreenLake platform to accelerate their digital transformation and unlock outcomes to fuel their business evolution. As we work with customers across sectors, we continue to see growth in the hybrid multi-cloud market. While the world is already hybrid and getting more so, we know the cloud experience is not yet everywhere. Customers are looking for a way to unify their multi-generation IT strategy with a consistent cloud experience across all their applications and data. HPE’s edge-to-cloud strategy is designed for these needs. To help our customers capitalize on the hybrid cloud opportunity, we continue to enhance collaboration across our partner ecosystem, as we drive innovation and bring a cloud experience everywhere. Today, thousands of customers are leveraging our HPE GreenLake platform to transform their hybrid cloud environments without having to move their data or rearchitect their workloads. Our partners have the opportunity to leverage HPE programs and initiatives to help them increase their profitability, generate recurring revenue, and grow their margins as they build out their as-a-service offerings.
In 2019, I committed to delivering HPE’s entire portfolio as-a-service by 2022. Last year, I am proud to say we delivered on that commitment, and HPE GreenLake has emerged as a leading hybrid cloud platform. In 2023 and beyond, we will continue to make key investments across our HPE GreenLake platform and portfolio of cloud services to extend our hybrid cloud leadership. Our innovation and pipeline of new HPE GreenLake offerings in 2023 is stacked across our entire product portfolio from compute, storage, supercomputing, AI, data analytics, private cloud enterprise and networking. We also intend to double down on our leadership at the edge, bolstering our HPE GreenLake edge offerings, introducing new offers in Private 5G, IoT and Secure Access Service Edge (SASE), and investing in segments such as security and data center switching.
Yuanqing Yang, CEO
The key success factor is to grow, learn and transform together in a changing world. Today, many small and medium businesses and large enterprises are moving toward the XaaS consumption model, and Lenovo has built our solutions and services business into a new growth engine. We will work with our channel partners and seize these opportunities together. In the past few years, the industry has faced many uncertainties such as manufacturing disruptions, supply risks, and the global pandemic, and some of them are likely to persist for a while. So, we will continue to help our channel partners and navigate through these challenges together.
Kris Hagerman, CEO
Cybersecurity as a service (CSaaS) represents a massive opportunity for channel partners in 2023 and beyond. Today’s threat landscape is too difficult, too complex, and changes too quickly for the vast majority of organizations to effectively manage cybersecurity on their own, and the hard truth is that most probably shouldn’t even try. Managed detection and response (MDR) services, specifically the Sophos MDR service that spans an organization’s entire IT environment regardless of the security vendors and technologies already in place, constitutes the core of CSaaS. We have pivoted all of Sophos to embrace the opportunity of delivering CSaaS with industry best MDR capabilities that partners can use to better defeat persistent, well-funded and organized attackers targeting their customers. Our channel partners that adopt CSaaS and deliver Sophos MDR services to their customers are seeing tremendous success already this year, and that is likely to continue for the foreseeable future.