Technology is without a doubt one of the fastest-changing sectors in the world, and many investors are trying to position themselves to cash in on new trends in the industry. But where are the opportunities for those with a desire to make some money?
According to consulting firm, Accenture, in its recently released report, From Digitally Disrupted to Digital Disrupter, there are six key areas to watch this year, and while this has traditionally been the domain of smaller, nimbler businesses, there is a major shift happening globally.
Accenture told clients: “Big companies are back in the digital game. Procter & Gamble, Tesco, Disney, GE – these are just a few of the global 2 000 that are now in a race to become digital. Those that get there first will be able to disrupt their existing markets and penetrate new ones. They will be in control of their new digital destinies.”
The trends identified by Accenture:
1. Digital-physical blur
According to Accenture, global IP traffic is expected to double between 2013 and 2016, while broadband speeds will increase two-fold over the same period. This means that traditional brick-and-mortar businesses need to embrace technology and bring it into their user experience.
Retailers like Tesco and Staples are experimenting with new ways to deliver unique and meaningful consumer experiences. Tesco and Staples are transforming their in-store technology and service offerings to better align with consumer lifestyles. Tesco is rolling out face scanning digital signage at all 450 of its UK petrol stations, to tailor engaging and on-screen content to the audience of five million-plus adults who pass through its stations each week. Staples is piloting stores with less merchandise, more kiosks (with free next-day delivery), and meeting spaces for busy small-business owners.
2. From workforce to crowdsource
Crowdsourcing has become a buzzword in South Africa, as sites have attempted to harvest group thinking via specialist communities. This has not enjoyed a lot of success to date, but there could be some interesting learnings from overseas.
Instead of hiring internal skills, businesses are tapping into global communities. The Accenture report uses the example of Kaggle, a global network of computer scientists, mathematicians, and data scientists, who compete to solve problems ranging from airline flight optimisation to retail-store location optimisation.
3. Data supply chain
In a technology driven world, organisations are drowning under the sheer volume of data that they are having to process. While information is indeed valuable, the trick for many organisations is to work out what is important and what is sundry to requirements: “ To truly unlock that value, companies must start treating data more as a supply chain, enabling it to flow easily and usefully through the entire organisation – and eventually throughout each company’s ecosystem of partners too,” says Accenture.
This sounds impressive, but what does it mean in a practical sense? US food company, McCormick, has realised that machines are now starting to use data to ‘sense’ the world as humans do, and this extends to taste as well. Using a solution offered by technology player, Enterra, McCormick’s FlavorPrint site asks customers to rate a variety of flavours, in order to learn which flavours are the most popular. They are then able to structure products around them.
4. Harnessing hyper-scale:
Hardware has long been the ugly stepchild in the technology sector, with many participants preferring to go with software and ‘cloud’ solutions. However, with these platforms growing rapidly, and massive demand for space and speed, the real win may be in the hardware sector.
Consider this: according to the Accenture report, Google has well over a million servers; Microsoft also has more than a million. Then comes Amazon, with about half a million, and Facebook and Yahoo, with a couple of hundred-thousand each. In terms of power consumption, Google’s global operations continuously draw 260 million megawatts of power – roughly a quarter of the energy generated by a nuclear power plant.
The opportunity may once again be in the sphere of those supplying the infrastructure to maintain the growth of networks.
5. The business of apps
Accenture notes: “In the consumer world, application development has become the province of a new generation of developers who are eager to strike gold by creating the next Angry Birds or Evernote app for the mobile phone – applications that are smaller and simpler to use. That development approach is now moving into the enterprise, creating new applications for mobile, Web, and desktop platforms alike.”
Research company, Gartner, predicts that by 2017, a quarter of all business enterprises will have an app store for managing corporate-sanctioned apps on PCs and mobile devices.
6. Architecting resilience
As the recent load-shedding by Eskom has highlighted, businesses can ill-afford interruptions. Customers expect an ‘always-on’ environment where they are able to interact with the organisation. Customer data security is equally important, as has been clearly demonstrated by the number of attacks on technology infrastructure at retailers and financial services players. Research shows that the number of attacks have increased by 58% over the last year.
The example cited by Accenture is Google’s five-minute outage in mid-August 2013, which is reported to have cost the company $545 000 in revenue.
Research done by the Ponemon Institute in 2013, found that the average cost of data centre downtime across industries is approximately $7 000 per minute in losses.
Savvy investors want to be looking for companies that can address security and the ‘always-on’ phenomenon, which keeps businesses ticking over.