Sourcing Advisory

SMAC - The New Technology Foundation For Revolutionary Business Models

Kevin s. Parikh Dec 2014

A new and innovative technology platform or stack comprising of Mobility, Analytics, Cloud Computing and Social Networking (popularly referred as SMAC) is creating the foundation for new and innovative business models that is transforming customer experience. In this article, we look at each of these technology innovations and discuss their impact on future business models.

The first transatlantic transmission happened on Dec 12 1901 when Marconi received a message from England at St John’s, Newfoundland. It was an epochal moment signaling the birth of mobile communication. The next 100 years would see the gradual proliferation of wireless communication with mobile subscribers reaching the one billion mark in 2002. The figure more than doubled in the next four years and today stands at a staggering 4 billion or more than half of earth’s population. The primary allurement for this phenomenal growth was the multiplier enhancements in data rates of portable devices. From 2G, which provided average data rates of 80-100 kbps, the world has graduated to 4G networks, which could theoretically operate at an astounding peak rate of one Gbps. Today mobile communication forms the bedrock of ubiquitous computing. The twin forces of rapid data processing and delivery on the go provides a seamless medium for smooth flow of information, sans bottlenecks.

Forty years back Martin Cooper of Motorola made the first cellular phone call using a two and a half pound handset with a battery life of 20 minutes. Mobility started with device manufacturers like Motorola, TeliaSonera and Ericsson, where the design objective was to achieve a large coverage area with limited radio spectrum by achieving high capacity. The focus was on improved modulation and coding strategies to accomplish error free communication. The passage of time saw the handsets getting sleeker, wieldier, better looking and more defined but the primary use still remained voice calls and text messaging. The advent of 3G served as an inflection point-giving rise to services like mobile TV, video on demand, location based services and was the precursor to the application era where Apple achieved mass-market adoption using touch screens on its mobile phones. The implementation of a store for the purchase of software applications was a new business model, which provided the customer with granular control and marked a shift towards buy-only-what-you need software. Organizations started using cell phones as a marketing platform to gain direct access to customers. The social media era was marked by the increased use of networking sites most notably Twitter and Facebook. The stupendous growth in user specific data helped organizations get a real time view of the customers’ specific needs. Facebook pretty much knows everything about their users, their age, gender, location, their interest in books, movies, the companies they have worked for and their dislikes based on the ads they hide. A phenomenal eighty percent of the information thus created is unstructured and is growing at 15 times the rate of structured information and if well harnessed it provides an ideal customer specific template on which to design products. An effective Big Data engine churning out analytics on captured information enabled new insights on customer behavior. Companies achieved unprecedented cost and logistical advantage by using cloud services to deliver the collected information and monetize it. The confluence of mobility, big-data and analytics, cloud and social media created a truly boundary less enterprise with potential for explosive growth.

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