There's a Use-It-Or-Lose-It budget situation. If you simply can't get funding any other way than a Capex appropriation -- the choice is made. Market research by IDC, 451 Research and others confirms this approach is steadily waning.
Choose As-a-Service options when:
The organization values agility. In late 2016 IDC FutureScape predicted that 80% of enterprise IT offerings would be sourced on a pay as you consume, opex model. The guidance was prescient given that by the fall 2016, at least seven major vendors had debuted On Premise, as-a-service options, reiterating that it is a fundamental shift in how enterprise IT is delivered. Following the success of Amazon Web Services (AWS) -- from US$0 in2006 to almost US$8 billion business ten years later, and the dominant force among hyperscale cloud providers with nearly 3x larger than its next largest competitor, the opex solutions concept has spread through networking, security and storage sectors. As vendors watch customer adoption, industry analysts have predicted additional opex-solution shifts.
IT resources are limited. As-a-service offerings put the vendor in charge of operation, maintenance and upgrades. It's easy scaling up -- and equally importantly, scaling down -- and letting those who know the most about the product hassle with the mundane details. This frees IT teams to focus on their core deliverables that accelerate the business and avoids being stuck with the wrong equipment, and wasting time on low-value, high-effort tasks. It allows them to respond to business demands promptly, with a right-sized architecture. Doing this can allow IT teams to effectively deliver infrastructure for a new application without delay and without having to free up purchasing budgets for it.
Projecting future demand is uncertain. For example, with data storage, most organizations don't accurately know their requirements in three to five years -- they're lucky to know it one-year out. Opex approaches enable the team to test before they buy, and instead of worrying about right-sizing storage today, focus on selecting a solution that meets today's needs, has the ability to scale to at least an order of magnitude greater than the largest envisioned deployment, and has the elasticity to scale both up and down.
Your product or solution is an as-a-service offering. Software application providers and service providers alike are better able to manage costs and profit margins if they can continually match their infrastructure footprint to the ebb and flow of their subscriber base -- without hefty carrying costs, rollout logistics and bloated overhead from over-provisioning.
Noam Shendar is chief operating officer of Zadara Storage. He has over 20 years of experience in storage and chip-level engineering, product development and business planning.