Subscription-based business model is the driving force behind XaaS offerings. As enterprises’ need to turn “Capex to Opex increases”, upfront capital expenditures for business applications, utility software or data centers are increasingly being replaced by cloud and XaaS subscription-based offerings. This allows customers to fund IT investments as operational expenditures with no upfront capital spend. Also, as a consequence, an important shift in the applications, which is of significance for Indian IT Services, is from customized to standardized.
Key characteristics of a XaaS-based offering are largely similar to that of cloud, including:
Term-based billing or Pay-as-you-go models
High scalability and flexibility
Multi-tenancy
Device independence that may also enable users to access software across multiple platforms
Location independence
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