Today, technology serves as the backbone of the digital economy. The pace of change and the level of disruption compelled by modern technology are exponential. Advancement has been made in various technologies in past few years that were once impossible, both technologically and economically are enabling myriad opportunities.
Now, we have reached a tipping point where cloud computing, cognitive computing, big data analytics, and the rapidly growing IoT are transforming businesses around the world. We’re also seeing promising advancements in fabrication techniques, materials, machine design, and software that are likely to lead to an expansion in enterprise applications for additive manufacturing.
Meanwhile, from today’s disruptive and unprecedented change, enterprises are making plans for the next economy rising in the technology industry itself. Also, technology businesses have started thinking more strategically towards creating new revenue opportunities and adapting their business models and operations. Landscape of companies across the entire IT services are changing the way they deliver their offerings and are eagerly shifting towards more flexible consumption business models, allowing customer’s suitability in consuming and paying for products and services based on their needs and usage.
Technology companies considering this path for creating real value for businesses and customers need to give a second thought about how flexible consumption can plunge future growth. They must be prepared to manage near-term transition costs in order to ensure that before evolving their business models there is alignment and integration of key decisions.
What should businesses be mindful of as they plan for growth?
The current wave of divestiture activity in the technology industry underscores the struggle that few companies with diverse business models are experiencing in succoring valuable growth. These businesses are divesting to increase focus rather than becoming smaller. As the divestiture activity cools, a series of acquisitions is expected to be seen, as many of these companies seek to scale for greater concentration in their chosen area.
Significantly, another dynamic impact on strategic planning and growth potential for various technology companies is going uncertain in the global regulatory environment. Increasingly, global regulators focus on the technology companies as well as digital economy as they see opportunity of increasing revenues through incentives and taxes. Many of the technology businesses will need to manage regulatory uncertainties while implementing their growth strategies as regulatory uncertainty around taxation doesn’t change the fact that global markets are an essential expansion channel for most of these companies.
Partnering strategies can be another way for technology companies to grow as they provide more opportunity for development of top-line acceleration, new business models, and faster adoption of offerings in the marketplace. Several firms may want to explore partnerships with customers in various verticals they sell into and can effectively serve those markets. While other companies may consider go-to-market (GTM) relationships offer a shorter path to major customers in need of specialists to seize new opportunities or to help them solve complex problems. And some may want to help drive innovation by opening up their platforms to developers.
Growing technology businesses should also strive to work more collaboratively with their customers to truly understand the core challenges they are facing. This insight will help them to better communicate how their products and services can deliver greater value to their customers. Partnering strategies are another way for technology companies to grow by providing more opportunity for development of new business models, top-line acceleration, and faster adoption of offerings in the marketplace.
What markets do we see emerging in the sector?
For transformative change, open platforms are a powerful tool. They help in accelerating innovation by enabling companies and developers to explore the art of the possibility. The IoT, cloud computing, big data analytics, cognitive computing and additive manufacturing are areas expecting platform play in the near future where significant investments are being made. Rapid growth is seen in Artificial Intelligence (AI) applications for commercial use due large availability of open developer platforms.
Many new technologies that emerge from developers’ use of open platforms will help to transform the customer experience. Consumers and companies will not only be able to forge transactional or event-driven relationships but the holistic ones too. Technology like cognitive computing and big data analytics is helping businesses understand and even anticipating customer needs too. Moreover, the depth of these relationships will depend on willingness of customers sharing about themselves through the technology they use.
2016 Technology Industry Outlook
