How do you solve for the “X” in XaaS? Join ISG’s CMO, Paul Gottsegen, as he interviews ISG Advisor, Prashant Kelker, on which XaaS trends and predictions you should be paying attention to in 2022.
Transcript:
Paul
X as a service, right? “X” is… so there's infrastructure applications, and there's kind of the common ones, but I've noticed that it's getting more narrow and more innovative of what that “X” is or could be. XaaS. Think proposal as a service, for example.
Talk about some of the “X” as-a-service that you're seeing, the ones that are just starting to peek their heads out as we head into the New Year.
Prashant
I'm going to build on the “peek its head out” idea, because there's one curious thing we are looking at under sustainability and green efforts, and that is retained product ownership.
So, what happens if you are GE, and you stop selling your engines but start renting your engines out to airlines? That's product as a service. Now, you can apply the product-as-a-service analogy to literally everything, think dishwashers. Think phones, think anything.
Retained product ownership is a really, really large trend we should be watching, because the more complex the product is, the more downtime becomes precious, so you know should be avoided. So, think about product-as-a-service. Think about if that product-as-a-service is connected and suddenly imagine having a digital twin of that product on your dashboard so that you can do preventive maintenance. If you could use that to avoid downtime, think how much you could charge for that conditional monitoring agreement. You've just sold a connected service on top of a product, which you have also sold.
Now, what could happen here is that – well, the good side is that you know there's the revenue. That’s the upside to it. The downside is certainly the asset still remains on your balance sheet, so there are a few things you still need to look at: the income sheet, the balance sheet, if there is a significant impact of this new connected service, but I think that's where the XaaS is going.
Now you can do this only if you delayer things so you can take your product as a service. You could take your product platform as a service. You could take certain business cases and say it's your connected future use cases as a service. There's no limit to what you can do if you delayer.
Paul
OK, so that's back to the paradigm word.
It's a different paradigm of thinking of everything as a service, even if it's like a dishwasher or washing machine or an aircraft engine, which obviously is something you can touch there.
About the authors
Paul Gottsegen
Paul is President, ISG Client Experience, managing the firm’s marketing activity globally, including demand generation, branding and communications. He is a leader in the firm’s work to establish and maintain a leading position in AI and new technologies and to capitalize on the opportunities they present. From 2019 to 2023, Paul led the ISG Research business to great heights, and continues as Chair, ISG Research.
Paul was a classic product marketing leader for PC hardware for the first 20 years of his career, including launching the industry’s first network servers. He has since applied that product marketing experience to CMO roles in large services firms. While marketing is his “center of gravity,” he has led large sales organizations and has been a general manager with full P&L responsibility.
Prior to ISG, he was the Chief Marketing Officer for Mindtree and Infosys, completing end-to-end branding and marketing turnarounds. As Vice President of Enterprise Marketing at HP, Dell Inc., and Compaq earlier in his career, Paul led product marketing, revenue marketing and enterprise alliances for the network server businesses.
Paul is Board Chair of the Gastric Cancer Foundation. He holds a bachelor’s degree in computer science from Brandeis University and an MBA from The Wharton School.
Prashant Kelker
Prashant Kelker is President, ISG DACH, and Chief Strategy Officer. A globally recognized thought leader in AI and technology-led transformation, Prashant is shaping the firm’s strategic blueprint and bringing together all advisory capabilities to guide clients in the DACH region through the convergence of AI, digital technology and enterprise operating models.
Previously, as Partner, Americas Consulting, he led the effort to be the first sourcing advisory firm to establish a reference architecture for applied Generative AI with the 2023 ISG State of Applied Generative AI Market Report and played a key role in the development of our highly successful ISG NEXT operating model in 2020. Prashant joined ISG in 2012.
Before joining ISG, Prashant was a Technology Director at Accenture, where he won and established several new accounts and created digital offerings on mobility and predictive analytics. He earned an MBA from the Indian Institute of Management in Bangalore and a BE in Electronics from Bangalore University in India.
