eCommerce

BaaS 101: What eCommerce Companies Need to Know About Business as a Service

Cloud infrastructure has fundamentally changed the way IT services are provided. Soon, it may change the way that key business services are offered, too.

Business as a Service (BaaS), an application of the Everything as a Service (XaaS) model, provides real-life services like marketing and accounting in much the same way cloud storage is delivered to businesses now — through an instant, on-demand service whereby you only pay for what you use. 

BaaS may soon be the way that all traditional business services are charged and provided. Here’s what that means for direct-to-customer eCommerce companies. 

What Is Business as a Service?

The “as a Service” model is expanding and changing, says the team at Accenture. “The marketplace is moving quickly towards a new era of service delivery where applications, infrastructure and business processes are brought together and delivered ‘as a Service.’” 

The “as a Service” model will be applied across organizations, from finance to marketing to IT, and deliver a range of software and services designed to achieve specific business goals. 

Hayes Software Systems’ CTO Kunal Ashar believes that businesses providing entire services or divisions within the cloud represents the next stage of economic growth. “It’s the service that will be provided to the consumer in the form of an integrated set of transactional and collaborative activities to accomplish a specific organizational goal,” Ashar writes. “Comprehensive business services (offered as SaaS) will be orchestrated (as BPaaS), managed and monitored (as MaaS), run (as PaaS) and hosted (as IaaS) – all in cloud.”

The result is that entire services of departments can be managed remotely, within the cloud. BaaS offloads the work of business-building then lets executives and teams focus on their organizations’ core offerings. 

The Everything as a Service model easily expands to the offline world, as well, says StartUPLabs Director Jeffrey Walker. You can see this firsthand in the way Uber and Airbnb have disrupted traditionally offline services like transport and accommodation. The same thing is now happening with Instacart, which is providing customers with a fast and cost-effective delivery service.  

The fundamental idea isn’t really anything new, notes SeMI Technologies’ Bob van Luijt. He points out that his city provides him with garbage collection as a service every week while his gym allows him to essentially rent gym equipment on a monthly basis.

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Why Would a Company Switch to a BaaS Model?

Instant gratification is a big driving force behind the adoption of Business as a Service, say Deloitte’s George Collins, Pavel Krumkachev, Gordon Aspin, Marlin Metzger, Scott Radeztsky, and Srivats Srinivasan. On-demand services like Uber have conditioned people to expect instant gratification without significant expense, they write. This mindset is filtering into the business world. Departments want quick, easy, frictionless access to core services that someone else delivers and maintains — while enjoying the same benefits they would if they did it themselves. 

Further, the cloud, and the “as a Service” model in particular, is democratizing business functions, writes Botmetric’s Amarkant Singh. Businesses don’t need to spend time and money to build up departments. Now, they can deploy ready-made business processes. 

Managing costs is another huge driver of “as a Service” adoption, as ZDNet UK’s Charles McLellan points out. Businesses are looking to lower the total cost of ownership at every opportunity. Business as a Service fits perfectly into this model, allowing companies to leverage high-quality assets instantly while paying a fraction of the cost it would take to establish them. 

BaaS also gives companies more flexibility, says Broadsuite Media Group CEO Daniel Newman. Flexibility is essential for any company operating in the 21st Century. Big companies can’t change their old systems quickly enough. Everyone wants to change instantly. Business as a Service allows brands to add or remove what they need in real-time and at will. 

BaaS Has Moved to Offline Applications

The “as a Service” model has grown beyond the scope of cloud computing, notes the team at Servicefutures. Almost any product or process can be converted into a service offering that allows companies to move away from expensive ownership and toward variable costs.

In fact, it’s gone way beyond the internet full stop, says Aria’s Sean Kirk. A lot of “as a Service” offerings often have nothing to do with IT at all. 

This shift is happening more and more in the B2B world, says marketer Kate Harvey. “In fact, if you are offering a B2B product or service and still locking people into extended contracts, you stand to lose in the near future to a competitor who realizes that our collective mindset has shifted.”

Rolls-Royce is an excellent example of how a company can deliver an “as a Service” model in a B2B world. The company’s TotalCare program rents jet engines to airlines and charges them “power by the hour.” The engines are equipped with IoT sensors that capture data and allow Rolls-Royce to offer a proactive maintenance service that helps its customers cut costs further. 

Staples is transitioning from being an office supplies retailer to an “office services provider” writes Chief Outsiders’ Blaine Mathieu. Rather than selling office equipment outright, Staples is now providing a done-for-you office service for companies that covers everything from equipment to management to cleaning. 

Scalefast, too, is an example of BaaS. We combine eCommerce software with solutions to physical, real-life problems like customer service, warehousing and order fulfillment. We also consult brands on their businesses and can provide marketing services, too. 

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How BaaS Marries With eCommerce

The Business as a Service model is a natural fit for eCommerce, where smaller brands are looking to compete head-to-head with blue-chip brands, and everyone is trying to remain as cost-efficient as possible.

Through eCommerce as a Service, brands can launch a multichannel direct-to-consumer sales offering quickly and easily, without having to build anything in-house, the team at Fashion Tech Group writes. Everything the business needs is available to rent, including the eCommerce platform, analytics, fulfillment and tax advice. 

Having a managed eCommerce platform can be key to your success, notes A Better Lemonade Stand’s Richard Lazazzera. “Hosted eCommerce platforms make your life easier,” he says. “You don’t have to worry about security, vulnerabilities, PCI compliance, backups, or website crashes. It just works. All the technical aspects of maintaining a safe and secure website are managed by the platform provider.”

Getting the back-end of eCommerce right is also important — and can be expensive. We’ve noted before that outsourcing your eCommerce offering in this way can save a huge amount — up to 90% of upfront costs — compared to developing such an offering in-house. That’s because the eCommerce as a Service provider will already have the people, processes, tech stack and warehouses ready to go.

eCommerce as a Service is a way for businesses to focus on what they are best at while outsourcing the parts they aren’t, says Shyp Co-Founder Kevin Gibbon. Whether at the customer service or customer experience level, eCommerce as a Service acts as a plug-and-play offering so you can choose the business services you need and forget the ones you don’t.  

BaaS is the next step in cloud evolution. Is your brand ready to take that step?

Images by: eberhard grossgasteiger, Austin Distel, Igor Miske