Everything as a Service begins with organisational maturity

More than 82% of global enterprises adopted at least one Everything as a Service (XaaS) model in 2024, driven by accelerated digital transformation across industries. Seen as the natural evolution of cloud computing, XaaS now touches almost every business capability. Yet some organisations still hesitate to embrace it, doubting its value.

According to Wayne Yan, CTO at Dariel, the reason has very little to do with technology: “Organisations do not become service-oriented because they consume cloud services, he says. They successfully consume cloud services because they have already matured into service-oriented enterprises.”

Every business already operates through services, whether it recognises this or not. Long before a payroll platform is outsourced, HR is already consumed as a service by the rest of the business. An IT service desk run by a managed service provider is relied on daily to resolve incidents and restore productivity.

“These service relationships exist regardless of whether they are formally documented,” says Yan. In less mature organisations, they remain implicit: expectations are communicated informally, ownership is unclear, and service levels exist as unwritten assumptions rather than explicit commitments.

“As organisations mature, those assumptions evolve into defined capabilities with measurable service levels, identifiable consumers and accountable owners. Only then does XaaS become a viable operating model. Before a business can effectively consume services from outside, it must first understand the services it already delivers internally,” Yan explains.

Not every business capability contributes equally to competitive advantage. “Every organisation exists to deliver value through a primary value stream: the activities that differentiate it in the marketplace. Customers rarely choose a supplier because of its payroll process or finance department,” says Yan. They choose the organisation that creates superior value through its primary capabilities, and that distinction determines where scarce resources should be invested.

Differentiating capabilities deserve continual investment and refinement because they create competitive advantage. Enabling capabilities, by contrast, benefit from consistency and standardisation. Their job is simply to support the value stream as efficiently as possible.

“This is precisely where XaaS creates its greatest value,” says Yan. By consuming mature enabling capabilities as services, organisations reduce cost, improve consistency, and redirect investment toward what genuinely distinguishes them.

This distinction matters more as organisations grow. In the earliest stages, most businesses run on generalists: founders wear multiple hats, knowledge sits with individuals, and informal communication substitutes for documented process. “This works well while speed matters more than structure, but growth changes the economics of the business,” says Yan.

Every enabling capability then begins to demand more investment: more specialists, more management, better technology, more formal governance. If every supporting capability must be built and scaled internally, growth becomes constrained by the organisation's ability to expand every enabling function alongside its core business. “This is the point at which service orientation begins to transform the economics of scale,” says Yan.

A capability cannot be consumed as a service until it has first been encapsulated, a principle borrowed from software architecture. Consumers interact with a stable interface while remaining insulated from the complexity behind it. As long as the contract holds, the implementation underneath can evolve, scale, or be replaced entirely without disrupting anyone who depends on it.

The same logic applies to organisations. A mature capability exposes what might be called an organisational service interface: consumers know what outcomes to expect, what service levels apply, and how performance is measured, without needing to understand the internal processes or staffing behind it.

Once a capability is encapsulated behind a trusted interface, responsibility for delivering it becomes independent of the people who rely on it. The provider gains the freedom to improve processes, adopt new technology, or reorganise teams without the consuming business needing to change how it interacts with the service. Delivery itself becomes portable: the same capability might start with one person, grow into a department, become a shared services centre, and eventually move to a managed service provider or SaaS platform. Throughout, the consuming business interacts with exactly the same interface.

“That”, says Yan, “is the true economic power of XaaS: not lower cost or subscription pricing, but the ability to transfer the complexity of scaling enabling capabilities to organisations whose core business is delivering them at scale.”

XaaS is often portrayed as simply the next stage of cloud computing, but that view mistakes the enabler for the transformation itself. Cloud platforms and subscription models have made external consumption easier, but they have not changed the organisational principles that make it succeed.

Every enterprise already operates through services. The journey toward XaaS begins when those implicit relationships become explicit capabilities with clear ownership and measurable outcomes. As capabilities mature and become encapsulated, implementation is freed to evolve independently of the consumers who depend on it, whether that means moving from an individual, to a department, to a shared services centre, to an external provider.

Viewed this way, XaaS is not a destination but the outcome of a broader organisational evolution: a business that understands its own capabilities, distinguishes differentiation from enablement, and has learned to encapsulate complexity behind trusted service interfaces.

“Technology enables XaaS. Organisational maturity makes it possible. Encapsulation makes it scalable,” says Yan. Ends.

Founded in 2001 on the principle of delivering solutions right, the first time, Dariel bridges the gap between human ingenuity and technology. Our strong client partnerships reflect a commitment to excellence and our consultative approach to software engineering makes us a trusted partner for innovative and sustainable tech solutions. Proudly independent, Dariel is part of the JSE-listed Capital Appreciation Group. https://www.dariel.co.za/

Samantha Hogg-Brandjes | GinjaNinja | samantha@ginjaninja.co.za | +27-84-458-4857