The “XaaS” Value Proposition

Over the years, I’ve spent a lot of time advocating strongly for the abstracting of technology to the power user. This happens through the “as-a-Service” (aaS) model. You see it disrupting everything, even touching end users not in the tech space, such as Uber and Airbnb. The concept is simple: remove minutia from the process for the consumer of the service so they can focus more on doing what they do best. Let’s look closer at Uber and a few additional examples:

  1. In the case of Uber, they have taken the complex and expensive process of acquiring a taxi medallion and whittled it down to an online application process and providing technology to manage the day-to-day. This helps someone looking to make some additional income (or as their primary source of income) spend very little time on the administrative side, and spend more on driving and earning money.
  2. A service such as Microsoft’s Azure App Services has removed the need to do tedious things like manage updates and patches on a Virtual Machine (VM) and made it even easier to directly address scaling up and scaling out – all in the dragging of a slider in the user-interface (UI). This means that a developer or system admin (or hybrid – devops) is spending their time adding value vs doing the more tedious and non-value add tasks. Azure also globally manages security patches which might end up having an effect similar to herd immunity in vaccinations; the more endpoints being protected, the better we all are.
  3. QuickBase and Zapier, two pieces of software I’m extremely passionate about, enable people that are at least a little bit technical (not coders) to effectively and efficiently develop high-value software. Using them together is even more powerful, something that I’m going to be speaking about at QuickBase Empower 2017.

Keeping this aligned with XaaS in the cloud, I often encounter a lot of people who are frustrated that they lose control, can’t control certain aspects or tweak specific elements they could if they were doing it all themselves. For example, in Azure App Services, you do not get full access control list (ACL)/firewall control unless you go to the App Service Environment (ASE) which is much more expensive. Talking to Azure about this, I learned that this could be considered a negative because you are on your own private network in ASEs. In the shared model, Azure does a good job handling things like preventing of port scanning, DDOS, etc. They are able to do this by sampling the entire dataset across all shared customers. Similarly, users are not given control over the DOM/HTML in QuickBase (caveat: there are some ways to inject your own code via JavaScript but this is not supported). Looking at both examples, these could be perceived as negatives, right? To many though (myself included), these are positives. The fact that in QuickBase I can’t modify style sheets and write my own HTML means I don’t have to. This is one less thing that an app creator needs to burden themselves with – again leaving time for things that are more valuable such as truly solving a workflow issue with the platform.

Similarly, what about outages? They are a fact of life in the digital age. You might hear that not having control of your destiny is a bad thing. E.g. if you were hosting your Exchange server on-prem, you have full control when there is an issue versus when it is in Office365. This is true, but do you want that control? Do you have all the competency, access and capital internally to manage the level of redundancy that Microsoft does? When there is an issue in a datacenter, Microsoft probably has backups of the backups of the backups for every piece of hardware imaginable. During the outage, it is difficult to not be able to control or even influence the outcome. You just have to sit back and wait.

I was discussing this with Mike Hansborough, the CEO of MCF Technology Solutions, in the context of trying to explain the value of Infrastructure-as-a-Service (IaaS) to a client. He had a great analogy.

“Statistically, flying is much safer than driving. Many people though get more nervous flying than driving because they cannot control the situation.”

Let’s look at these two elements about the cloud. Say hypothetically we agree that both the lack of infinite feature control and outages being out of our hands is a negative. Can we quantify and come up with a cost vs. benefit of that scenario? I’m sure Amazon (shopping) can tell you exactly how much per second they lose if there is a site outage and even smaller businesses have some sort of idea. In the past, I’ve generally heard the ratio of 5-to-1 around QuickBase effort – meaning that if it takes you five hours in traditional coding (say, .NET and SQL coding a back-end and front-end), you probably can solve it in about one hour using QuickBase. I’ve been pretty vocal about the savings that QuickBase provides and recently discussed the savings that the recent advent of QuickBase Webhooks combined with Zapier has provided DishOut. In this article, I estimated that the work I did in QuickBase + Zapier (just these logistical enhancements) would have been an equivalent of $80,000 in professional services. Eighty thousand dollars is not a small amount of money for any small to mid-sized business. The only decisions aside from using modern platforms and microservices such as QuickBase + Zapier is either one, spend the cash or two, don’t do it. Not doing it leaves a lot of increased opportunity on the table and doing it simply costs a lot of money.

We can use this information to make some intelligent decisions on if these “negatives” are worth it (tip: they probably are). For example, in our building of the logistics enhancements, explained in the previously linked article, there were approximately three or four requests from the business that couldn’t be fulfilled, either due to a limitation in QuickBase, Zapier or one of the associated microservices. None of these were show-stoppers and the business would make the decision time and time again to look at the macro of the value added, including saving ~$80,000, instead of focusing on the handful of small things we couldn’t do.

I can’t make the decision for you as to if an XaaS solution makes sense for your business. What I can say is that, out of my hundreds of deployments of these types of systems, I have rarely run into blockers that made the cost outweigh the benefit. It would be a good exercise for any company relying on technology (which is basically everyone) to thoroughly review their needs and determine how a subscription, or XaaS model can benefit them. Like anything, there will always be tradeoffs and risks. There will always be organizations who need to have more control or ownership, but that gap is slowly closing. For example, Azure maintains a PCI-compliant environment. If you feel like you need some assistance weighing these decisions, most vendors who work with cloud solutions will generally help with that process.