Innovators have capitalized on just about anything as a service (XaaS). Use our roadmap of 100+ XaaS ideas to inspire your next venture
14 Minute Read
Software as a Service (SaaS) businesses have commanded unprecedented attention in recent years. The glamorized business model has produced many winners, thanks to its high margins and recurring, predictable revenue. Pair that with the flurry of SaaS businesses that have hockey-stick growth and you get businesses trading at 10x revenue.
Many of the most successful companies deliver software as a service as part of their business, including Google, Microsoft, Slack, Adobe, Atlassian, and thousands of others.
But in recent years, innovators have asked the question: Why only software as a service? Why not take elements of this disruptive model and extend it to other offerings? That’s exactly what the industry has spawned under a new umbrella term: Anything as a Service (XaaS).
In this Trends piece, we break down what XaaS really is and give you a dose of inspiration––in the form of 50+ ideas––for starting your own XaaS venture. (If you just want the ideas, feel free to skip ahead.)
So here we go: the A to Z of XaaS.
What is XaaS?
XaaS is anything as a service. Even though it deviates from the more common term, SaaS, people often still associate the term with internet-based and specifically, cloud-computing software. The most common iterations of SaaS include Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) and even those classifications can be further broken down.
At their heart, service businesses do one fundamental thing: They solve a single problem that many others face, whether they’re serving a company (B2B) or an individual (B2C). By focusing on solving that specific problem, the solution is available not only to that individual but a flurry of others experiencing that problem. It also means that the solution can continuously improve, instead of simply providing a one-time “hot fix.”
That’s exactly why you’ll find a multitude of new XaaS businesses launching, as there are a multitude of problems that people and companies encounter, and businesses don’t always have the expertise or time to address them internally.
- Most companies need to be legally compliant.
- Most also need a high degree of digital security and analytics.
- And nearly every company requires some form of onboarding for new employees.
Pros and Cons of XaaS
For the SaaS provider, the XaaS business model often delivers a high customer life-time value (LTV), due to the recurring revenue business model. And if a problem is selected effectively, XaaS companies have access to a large addressable market, to which their solution can be “copy and pasted” across their customer base.
For the end-user, XaaS businesses offer a variety of tangible benefits. For one, they are able to transition costs from capital expenditure (CAPEX) to operational expenditure (OPEX), leading to more effective budgeting.
On a more practical level, XaaS solutions enable organizations to stay lean, whether it’s through reducing debt or payroll. Just imagine a previous reality where each company had to deliver their own analytics, security, and servers. Now, small companies have access to Fortune 500 technologies that stay up-to-date as they scale. In other words, XaaS means delivering “a predictable expense, for a highly predictable outcome” for the purchasing entity, as opposed to internal one-off projects that too often fail.
But companies must trust your service to inject into their operations, without compromising their current assets or proprietary information. And not all SaaS businesses have the potential for 10x valuations. Just look at WeWork, which was effectively a workspace as a service (WaaS), a capital-intensive service that doesn’t scale up and down as seamlessly as typical high-margin SaaS businesses.
The A to Z of XaaS
To spark some inspiration, let’s take a look at over 40 different XaaS models, and companies that have grown by tackling these models.
|AaaS||Analytics as a service (AaaS)||Mixpanel||Raised $77m|
|BaaS||Backend as a service (BaaS)||Kinvey||Raised $17.9m|
|Banking as a service (BaaS)||Treezor||Raised €3m|
|Business Management as a service (BMaaS)||Epicor||Acquired|
|CaaS||Clothing as a service (CaaS)||Nuuly||Recently launched by URBN|
|Car rental as a service (CRaaS)||Turo||Raised $437m|
|Compliance as a service (CaaS)||Deel||Raised $150k|
|DaaS||Database as a service (DaaS)||mLab||Raised $8m, acquired by MongoDB|
|Disaster Recovery as a service (DRaaS)||Rackspace||11 acquisitions|
|Digital Art as a service (DAaas)||teamLab||2 locations estimated $100m in first year|
|EaaS||Elevator Management as a service (EMaaS)||Otis||Revenue $12.9B|
|Egg freezing as a service (EaaS)||Kindbody||Raised $21.2m|
|FaaS||Food as a service (FaaS)||DoorDash||Raised $2B|
|Finance as a service (FaaS)||Savantis|
|GaaS||Games as a service (GaaS)||Blacknut||Raised €3.2M|
|HaaS||Healthcare as a service (HaaS)||Aiva||Raised $100k|
|Human Resources as a Service (HRaaS)||Ceridian||Acquired|
|IaaS||Infrastructure as a service (IaaS)||AWS||$8.4B last quarter|
|Insurance as a service (IaaS)||Safety Wing||Raised $4.1m|
|JaaS||Justice as a service (JaaS)||AirHelp||Raised $12.2m|
|Job Boards as a service (JBaaS||Sheet 2 Site||Tiny Boards has built out a set of job boards successfully|
|KaaS||Knowledge as a service (KaaS)||Ask Wonder|
|Kubernetes as a service (KaaS)||Rackspace||11 acquisitions|
|LaaS||Legal as a service (LaaS)||Kalexius|
|MaaS||Malware as a service (MaaS)||VMWare||43 acquisitions|
|NaaS||Network as a service (NaaS)||AWS||$8.4B last quarter|
|Negotiation as a service (NaaS)||Vendr||Monthly visits growing 500+%|
|OaaS||Operations as a service (OaaS)||Multiple companies|
|PaaS||Publishing as a service (PaaS)||Ghost||ARR $1.7m|
|QaaS||Quality as a service (QaaS)||NextRow Digital|
|RaaS||Risk assessment as a service (RaaS)||Microsoft Premier Proactive Services|
|SaaS||Storage as a service (SaaS)||Rackspace||11 acquisitions|
|Security as a service (SaaS)||Okta||Raised $229m|
|TaaS||Therapy as a service (TaaS)||Ginger||Raised $63.2m|
|Testing as a Service (TaaS)||QA Mentor||3 acquisitions|
|UaaS||Umbilical storage as a service (USAAS)||Stemcyte||Raised $2.5m|
|Unified Communications as a service (UCaaS)||Ring Central||Raised $44m|
|VaaS||Video conferencing as a service (VaaS)||Zoom||Raised $161m|
|Visibility as a service (VaaS)||Ixia||Acquired|
|Vetting as a service (VaaS)||Turing|
|WaaS||Workspace as a service (WaaS)||Itopia||Raised $9.1m|
|ZaaS||Zenoss as a service (ZaaS)||AWS||$8.4B last quarter|
Mini Case Studies
To make this more concrete, let’s zero in on 4 mini case studies to isolate why XaaS worked in less-likely places.
Slido: Audience Interaction as a service
- Slido helps solve a common problem across event and conference organizers: audience engagement. Many events have tried piecing together software or processes, none of which were designed for polling a live audience. Slido took on the relatively specific problem––one which had too much friction for each individual event to develop itself––and provided a solution that makes audience interaction easy. After only €30k in funding, Slido has now solved that problem for more than 320k events while building up a team of over 130 people across 4 continents.
Otis: Elevator management as a service
- As elevator technology becomes more advanced and connected, Otis has taken the opportunity to introduce an IoT platform, Otis One. With the goal of “minimizing disruption,” its elevator management as a service platform utilizes analytics to identify unusual behavior and then proactively alerts property owners and maintenance teams. The company monetizes through both the service play (55%), but also through equipment sales (45%), netting $12.9B last year. Such a platform would be too costly for each individual elevator owner to deploy. But Otis’s solution can be justified through economies of scale across the $104B elevator market.
Vendr: Negotiation as a service
- Vendr, effectively a negotiation as a service (NaaS) platform, helps clients manage their SaaS purchasing and renewal. The company’s pricing is not cheap, starting at $3.5k/month, but it promises that if its service doesn’t pay for itself, Vendr will give you your money back. The platform not only manages logistics, but offers dedicated “SaaS Buying Experts”––a position that may be lucrative to bring in-house at larger enterprises, but not a luxury that smaller companies can often justify.
Nuuly: Clothing rental as a service
- Nuuly, a clothing rental service recently launched by URBN, has further commoditized clothing by allowing women to change their clothing monthly. Instead of purchasing clothing outright, the platform sends women 6 items for $88/month, to which they either buy or “return and refill.” Coming off the heels of other clothing rental service companies like Stitch Fix (raised $122m) or Rent the Runway (raised $541m), Nuuly offers URBN an opportunity to capture some of that sweet subscription revenue and extend customer LTV.
Opportunities (AKA Problems We Like)
In the B2B category, the key is finding problems that a multitude of businesses face, yet have too much friction to solve on their own. Constrastingly, if the friction is too low (example: coordinating team lunches) or the problem is already solved well (example: Slack for remote communication), then it’s likely wise to move onto the next problem.
Here are 3 good questions to ask:
- What are some problems that large enterprises are solving with their large wallets, that smaller businesses don’t have access to?
- What is a problem that most companies face, but aren’t experts in solving?
- What is a problem that my own company is facing that can be productized?
The beauty of identifying and solving these problems is that if they’re solved effectively, the solution is useful to thousands or millions of other people. In other words, the upfront investment to solve the problem may be high, but the returns can be significant in the future.
Problems* still waiting to be solved well:
* Non-exhaustive; there are many, many more
- HR Services: Human resources is growing in complexity as a practice, but not every company has the resources internally to keep up. Whether it’s providing diversity and inclusion training or offering mental health services, companies will increasingly be looking for external support. For example, Lambda School (raised $48m) recently announced that it would be providing mental health support for each student. To accomplish this, Lambda partnered with Modern Health (raised $11.4m), instead of internally developing its own solutions.
- Remote Work: With remote work skyrocketing in prevalence, there are still many problems for companies to solve. Each time a company needs to spin up a new legal entity or employ international contractors, there is a substantial amount of work to ensure compliance, often with unclear solutions. Deel (raised $150k), helps companies pay remote contractors easily, while Workplaceless teaches teams how to operate remotely. There’s still room to support remote onboarding or to develop a seamless all-hands meeting experience (consider the Slido example).
- Team Retreats: With the rise of remote work, large and small companies, ranging from Buffer to Expensify to GitLab, are planning team offsites. When planning these retreats, often the same problems need to be solved. How do we get X number of people in the same place, for a reasonable price? What activities should we plan? How do we ensure there is a strong internet connection? Many companies still plan their own retreats, but there are opportunities for companies to streamline the process for others. Check out this fascinating piece about how Buffer planned a recent company retreat for more ideas.
- Paywall Software: Substack (raised $17.4m) has targeted paywalls for independent publishers. There’s still not an efficient solution for most media companies, so often larger companies, including the Wall Street Journal, build their own. At Trends, we pay $3k a month for software that doesn’t fully solve our problem. The Substack for existing web products is still waiting to be built.
- Revamping Bathrooms: Jack Moberger brought up an interesting idea in the Trends Facebook group recently: rethinking the company bathroom. Imagine a seamless interface where companies can select from a series of designs, choose their bells and whistles, and have their bathroom of choice implemented with ease. In an age where beautiful offices often trump other perks, there may be a market for this.
B2C XaaS isn’t categorically different from B2B XaaS, in that many of the same driving themes remain true. You’re still delivering a product to a wide audience by removing friction. Often, in B2C offerings, this comes in the form of commoditizing something and making it more accessible––often through subscription products.
To identify new outlets of opportunity, think through products or services that people need often. For example, we’ve all dabbled with food delivery as a service, but you may be surprised that some companies have made “below the belt wipes,” on-demand therapy, or sobriety as a service accessible to the masses.
Another interesting example is a new group of products aiming to help the individual hold companies accountable, through Justice as a Service (JaaS). Platforms like AirHelp aim to use big data and legal process automation to resolve disputes. And while AirHelp currently targets the aviation industry, there’s room to expand past that. Like Vendr, companies like AirHelp are “no brainers” for the consumer, as they’re effectively earning them money that they otherwise would not have collected.