The mobility, enterprise and consumer electronics industries are being fundamentally changed by a new type of business model called the “superstack.” Accenture defines a superstack as a more extensive and cohesive integration of operating systems, semiconductor chips, devices, applications and end-user services than the industry has traditionally achieved.
Competing in the superstack arena is a matter of survival as the industry moves full-throttle in this direction. Some high-tech sectors are already there, such as mobile handsets, digital media services and connected TVs. Other sectors may take longer to adapt because they’re not as far along in this superstack evolution.
To better understand this superstack trend, Accenture interviewed 30 senior executive at large high-tech companies in communications technology, consumer technology, enterprise technology, semiconductors and software. The research tested the validity of a superstack and sought insights into how companies address this trend, and what is needed to successfully execute a superstack strategy. The research resulted in a new research report, Competing in a High-Tech Industry Superstack.
Key Research Findings
Our research found that executives already have a firm understanding of what superstacks mean for their businesses. An overwhelming majority (83 percent) see superstacks as a top initiative affecting their operations and causing them to shift their strategic focus in ways that best leverage this transformation. Virtually all of the respondents (96 percent) view superstacks as an opportunity rather than a threat.
Seventy percent of respondents cited Mobility as the key superstack driver, the first and most active superstack market. Mobility encompasses everything from consumer tablets and smartphones to machine-to-machine technology and mobile applications. Fueling new business models in healthcare, financial services and retail, mobility ranks as by far the most powerful and biggest game-changer creating the need for superstacks. With mobility superstack battles spreading now to enterprise and consumer markets, the implications are profound for all high-tech players.
Another superstack opportunity is the consumerization of information technology in the enterprise. A rapidly growing number of employees are bringing a more diverse range of devices to work and are expecting broader interoperability with enterprise applications. Employers should verify secure access to these resources and deliver them in a way that mimics user-friendliness of commercial applications. A superstack is well-suited to deliver the necessary integration and scope to address this need.
Merging and Acquiring a Superstack
While there is considerable agreement that the superstack is a huge opportunity for technology providers, there exists far less consensus on how to achieve it. Some high-tech companies will focus their efforts on a few layers of the stack such as semiconductors and operating systems, while others may branch out through each layer. Whichever approach they take, most will likely use mergers and acquisitions (M&A) to create their superstack building blocks.
More than three fourths (77 percent) of respondents believe an increase in M&A activity will occur over the next two-to-three years. These companies are trying stake a claim in the superstack space before being locked out by competitors. It is far easier for them to obtain a pre-established business line through an M&A than to start an unproven one from the ground up. According to half of survey respondents, the primary targets for these M&As are research and development (R&D), the intellectual assets that power new innovations, and brisk go-to-market plans.
Achieving Success in The Superstack Race
To succeed in the superstack environment, high-tech companies should transform many functional capabilities and address performance gaps in innovation/R&D product portfolio management; talent management; and marketing and sales.
- In innovation/R&D/product portfolio management, the increased focus and emphasis on IP mean companies need to verify the continued relevance of their R&D capability to participants across one or more superstacks
- In talent management, the challenges may vary for different companies but all businesses will need to move towards a more structured approach to workforce planning
- In marketing and sales, more efficient management of external collaborative relationships will be an important performance indicator and determining factor of superstack success. Regardless of a company’s superstack strategy ago-to-market approach will require collaboration that will need to be carefully managed
The future winners in the high-tech industry will be those companies that, at minimum, identify and execute the right superstack strategy while also addressing challenges in these three capability areas. They will be the most agile and invest strategically in technology. They will act now--before it’s too late--to create a cohesive and superstack business.