Tumbling costs of launching and scaling a new business mean much more competition, Comms Vision event attendees are told The European ICT sector is facing threat of fundamental change and disruption over the coming years, not least from companies that startup and grow very rapidly to emerge to challenge established businesses almost before they are aware of the newcomers. The accelerating pace of change and the challenges and the threat of upheaval and disruption being posed by new market entrants has been a recurring theme at this year’s Comms Vision Convention, being staged at Gleneagles, Scotland from 4-6 November 2015.
The traditional carrier industry is ripe for widespread disruption, according to Andy Lippman, Associate Director of MIT Media Lab, speaking in a Comms Vision panel debate and citing the inability to be able to forward texts as symptomatic of the lack of innovation in core functionalities of many of the traditional technologies we take for granted. In part, he believes, this is due to homogeneous corporate cultures devoid of oddballs who think differently.
"There is no cult of innovation, the variance has gone," he stated. "Listen to your daughter. Kids don't have old answers to new questions; they have fresh answers to new questions. Technology is anything that is invented after you were born. The trick is in the imagining - we can make it in six months if we get rid of the past."
Other speakers quoted further recent examples of “Uberisation” (the emergence of new business models that have fundamentally impacted and eroded traditional business sectors) and suggested that the channel itself and particularly the traditional model of two-tier distribution might not be immune to such threats.
Matt Griffin, CEO of 311 Institute, claimed that such radical disruption is happening three-times faster today compared to 15 years ago and more veracious in nature. Much of it he argued was driven by ordinary people, and extraordinary talents who think outside the box and exploit opportunities created by increasing connectivity and Internet access. The continued increase in penetration of Internet access – forecast to rise from three billion people today to five billion by 2015 would only further increase the scope for such radical innovations.
Rising Internet penetration, the proliferation of mobile devices and Cloud computing are combining to make it possible to establish new solutions and business models much faster and greatly reducing the costs of establishing a business and entering a new market. "Today, anyone with a good idea is more connected, able to get funding quickly and they have faster access to resources," Griffin said. "Using the PaaS model it's easier to build a prototype and then gain instant access to markets for little outlay. A great idea can more easily be taken onto the global stage, while the cost of starting a business has fallen 1,000-fold."
As a result, according to Griffin, the number of “Unicorn” businesses emerging (those, such as Uber ,going from start-up to multibillion dollar organisations in just a few years) has increased from nine businesses between 2000 and 2010, to 174 businesses in 2015.