The consumption-based IT Services model is the business approach used by IT services as well as resources for achieving a balance between cost, efficacy and productivity, along with addressing the alliance, administrative tasks and refining business processes & objectives. Furthermore, a consumption-based IT Services model exemplifies the connection between the shifting technology, fluctuating business landscape and rising consumer demands. It is basically the transformation taking place from computing to consumption for companies. This also builds on business transactions coupled with the technological processes.
The global market for the Consumption-based IT Services: Reducing over-capacity costs is anticipated to develop at a compound annual growth rate (CAGR) of 17.32% throughout the course of the forecast, to reach US$ 1630 billion by 2030.
From past few decades, the traditional IT models were based over capital expenses for direct purchase of equipment and expense related with the operational and maintenance activities. This particular model necessitates businesses to obtain an asset up front, position it on premise and uphold it over the time. However, this is a risky as well as costly method owing to the rapid developments in technology and rising consumer demands.
On the other hand, new consumption-based IT Services model are acquiring the landscape by letting businesses pay according to their usage. This will probably lead to the lessening or may be removal of capital expenses as well as costs involved for maintenance & up gradation processes. Moreover, will thus seek attraction of several businesses to swift from the traditional IT model to the new IT consumption based model.
Factor Driving the Adoption of the consumption-based IT Services model
This trend is majorly driven by the extensive adoption of mobile devices and the recognition of BYOD practices by several businesses, this will allow the employees and customers to access their documents irrespective of their time & location. For instance, Uber and Lyft, is utilizing this model by structuring it on consumers' smart devices for driving and scaling up their business model. Some of the vital aspects of such services include security, consistency, scalability and accessibility and the new consumption-based IT Services model is enabled with all these abilities.
Another, example is HP that has emerged as a global leader in the market space by offering consumption-based licenses for hardware & software services. Moreover, consumption-based IT Services model is a fascinating option for the CIOs of companies who are making an effort to migrate from the traditional one-size-fits-all technological solutions to consumption-based IT Services model.
Challenges and Opportunity of the consumption-based IT Services market
One of the major challenge that will restrain the growth of the consumption-based IT Services market is shadow IT that arises as soon as any organization loses control over the usage and types of devices used by their employees. Thus, to address this challenge the organizations are required to bring up-to-date and implement policies & practices about the uses of IT.
The consumption-based IT Services market offers several opportunities to the investors by enabling flexibility & proficiency in businesses.
Consumption-based IT Services Scope
|Revenue forecast in 2030
|US$ 1630 billion
|CAGR of 17.32% during 2020-2030
|By Type, By Service, By Organization Size, By Verticals, Region.
|North America, Europe, Asia Pacific, South America, Middle East and Africa
|Key Players Profiled
|Accenture (Ireland), IBM (US), Deloitte (UK), EY (UK), PwC (UK), HPE (US), Wipro (India), HCL (India), TCS (India), Capgemini (France), Atos (France), Cisco (US), Cognizant (India), DXC (US), Hitachi Vantara (US), Infosys (India), LTI (India), NTT Data (Japan), Rackspace (US), T-Systems (Germany), AWS (US), Google (US), Microsoft (US), and others.
Frequently Asked Questions (FAQ) :
Consumption-based IT Services model is not new anymore. The concept is already in use since few years by telecoms utility organizations to add value to their customers by proposing flexible consumption options. Nowadays, several business & technological trends are driving the demand for consumption-based IT models that offer the same flexibility as well as affordability.
Flexible consumption-based IT services models offer the organizations a niftier way of accessing new technology on the basis of pay-per-use. However, by altering to a consumption-based service model, organizations are actually saving millions of dollars in IT costs and also facing an ongoing year on year investments. Additionally, transparent interest rates plus pay-per-use cost-effective pricing enables anticipating the future of IT expenditure easier scaling up the demand for business.
Moreover, the growth of cloud computing services have made the consumption-based IT service even more accessible than ever before and has directed towards the organizations for reviewing how their assets as well as financials can be managed further effectually. Besides, having access about the consumption information in real-time can vividly improve the accurateness of assessment models and transfer IT expenses into a more foreseeable territory.
On the other hand, altering to the even versatile as well as transparent consumption-based IT services models can probably be a compound and challenging process. Several organizations are making a swift towards the consumption-based services from the traditional IT-based.
Cloud computing and IT-based consumption model
Since the cloud develops as the key driver of the consumption-based model and IT services are considered as a very important product that enables in delivering the businesses with the exact quantity of hardware, software as well as support as per the time and requirement. Furthermore, IT as a service (ITaaS) is yet another new approach to describe the IT consumption model, in the terms of service providers that offer and orchestrate IT services & resources. Moreover, ITaaS offers a list of software as a service (SaaS), infrastructure as a service (IaaS) as well as a platform as a service (PaaS) as possibilities & also businesses are allowed to amalgamate with other as per to their needs.
In addition, legacy applications symbolizes as one of the foremost business regulators for a business. Besides, the cost of maintenance for an old and fragile infrastructure is constantly increasing, hampering the IT budgets and deterring the imminent innovation. These applications are exceptionally impeccable aspirants for the pay-per-use transformation, however there is a necessity of developing a steady business case in order to accomplish it. On the other hand, allocation of IT budget can be a perpetual struggle, since digital transformation often needs hard costs as well as open investment. Further, most of the time pay-per-use solutions call for substantial capital expenditure before their welfares turn ostensible. Thus, there is a requirement of a solution that will eradicate the cost & risk out of the digital transformation by allowing this modernization to take place without the need of additional investment.