Why the adoption of Resources as a Service (RaaS) is accelerating among startups

Startups are new businesses trying to find their wings. At first, they may not be sufficiently funded to have an adequate IT infrastructure. As small-scale operations begin, setting up a separate IT function with dedicated hardware / software and human resources can be prohibitive. This is where the pay-as-you-go model of cloud computing becomes relevant.

This model sells individual resources such as CPU, memory, and input / output resources for a few seconds at a time so that suppliers and customers can optimize their resources: the supplier by selling idle resources and the customers by taking full advantage of these resources at the best rates.

The cloud computing market that surpassed $ 241 billion in 2020 is projected to reach $ 480.04 billion in 2022 and a whopping $ 1712.44 billion by 2029. So, you can imagine the scale of growth expected in the near future.

Given the pace at which demand for these resources is increasing among startups, vendors will reinvent the way they design, manage and sell cloud computing resources, while customers will also discover how to use these resources optimally instead of blocking. the capital by purchasing them outright. Resource providers package resource packages and sell them as virtual machines billing them for a few seconds at a time.

In essence, the lease period has drastically reduced: from hours and minutes, billing has been reduced to a few seconds at a time. Additionally, the assets are now available for lease at a granular level and you can rent them according to your needs. Well-defined service level agreements ensure that customers get the best value for money

Let’s take a look at how lease term has plummeted over the past two years since the advent of cloud computing. Before cloud computing became fashionable, a server had a lifespan of around 3 years. When web hosting services were launched, the servers became available with monthly rentals. Amazon Elastic Compute Cloud on-demand allows you to pay by the hour or by the second to ensure minimal waste. Prices are dynamic and change every 5 minutes depending on availability. Price is entirely a function of supply and demand and if customers are smart, they can get good deals. Just as mobile phones are billed by the second, cloud computing resources can also be billed by the second. Some companies offer customers the flexibility to customize their bundles by combining CPU, memory, and I / O devices.

Customers will have the flexibility to mix and match assets so that the package is dynamic according to their needs. Likewise, suppliers will also have to adjust their prices according to the supply-demand situation and the competitors. In times of increasing demand, sellers will have the flexibility to choose customers who pay higher prices than those who pay lower prices.

Customers will seek to optimize costs by paying for resources based on their actual usage. They will use more efficient methods of negotiating resources and prices to get the best deals. They will need to purchase a basic mix of resources in the beginning to get a set of dedicated resources, after which all additions will need to be rented or sublet based on supply and demand-driven pricing.

Suppliers will try to make sure they sell their assets at the best possible prices they can negotiate, while customers will aim for the best value for money. They can also choose more resources when prices are low and sublet them to others. This is a highly dynamic model that works in real time.

Resources as a Service will change the rules of the game as it changes the way startups approach IT resources. This will provide them with the flexibility to manage system requirements at optimal cost without the need to create an independent IT function. This could help them use their funds more effectively and accelerate their growth.

Companies providing RaaS focus on providing an accelerated growth platform to small growing businesses that prefer the pay-as-you-go model for cloud computing resources. This trend is set to revolutionize the way companies envision resources and could dynamically change the business landscape in the future. As things stand, we are poised for exciting times ahead as optimal resource utilization at market-driven real-time pricing will democratize the entire industry.



The views expressed above are the author’s own.



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