Arena regularly publishes insights and analysis on important trends impacting manufacturing. Is there an emerging business technology development you deem important or want us to cover? Comment on our blog.
Wearable Electronics Are in Vogue
Despite the fact that consumer electronics companies are embroiled in a fiercely competitive, price-driven market, new wearable high tech devices and mobile electronics are booming and lucrative.
According to a recent survey by Enterprise Mobility, 72% of IT decision-maker respondents plan to spend more than 20% of their 2014 budget on enterprise mobility solutions and products. And 20% – 30% of enterprises plan to integrate their existing applications to other devices—like wearable computing.
Check out Intel’s “make it wearable” incubator program.
Interest in sporting these devices for consumers on the move is spearheaded by behemoths, such as Google and Sony. However, the market is also hot with other innovative product companies, such as Fitbit, Misfit Wearables and Jawbone.
Points to Ponder: More traditional clothing companies will be designing wearables with embedded technology by partnering with high tech supply chains and software development companies. It’s only a matter of time before we begin thinking of part and component manufacturers as couture brands. Just look at Lady Gaga’s flying dress.
Opportunity Cost – Not Cost Savings – Drives Demand for Cloud
Forrester forecasts that the global market for cloud computing will grow from $40 billion to more than $241 billion in the next ten years. Characterized as cost-effective, flexible and secure, cloud applications can deliver opportunity cost savings that even dwarf the financial Total Cost of Ownership (TCO) model.
For example, when a business pays a large upfront cost for a software solution, it no longer has that cash available to grow the core business. A core business that routinely could be making them margins some multiple in excess of what those now encumbered funds earn. An on-premise software solution that costs $250,000 plus 22% for maintenance equates to a $305,000 expense for the first year — and $55,000 each year thereafter. Compare that with a SaaS solution that costs just $70,000/year for the same number of users.
The SaaS option saves you $235,000 the first year of ownership. Boom. That found money can now be spent on engineers who will bring in $1,000,000 of additional revenue to your company. In this scenario, the opportunity cost of on-premise is $930,000—just for the first year. And the cost just keeps getting bigger every year thereafter.
Points to Ponder: More companies are evaluating on-premise software’s total cost of ownership, taking into consideration the full infrastructure, network, software license, support and upgrades, when choosing between on-premise and SaaS. Even more importantly, companies are recognizing opportunity costs—not cost savings—as an even more important business driver.
Disruptive Innovations Unlock Product Design Possibilities
According to a recent World Batteries Market Report, world demand for primary and secondary batteries is collectively forecast to rise 8.5% per year to $144 billion in 2016. China is predicted to remain the largest national market for batteries and will also be the fastest growing market, bolstered by an enormous electronics manufacturing segment as well as expanding output and motor vehicle use.
The report forecasts that sales to consumer markets will post the fastest gains through 2016. Rising incomes in developing nations will drive greater use of basic battery powered devices, while expanding use of portable electronics will fuel demand from the consumer market worldwide.
There’s no doubt the disruptive future of batteries, such as the lithium-ion, which—while small in size—will play a big role in unlocking the future of product design and development for everyone from OEMs to component manufacturers.
Because of this disruptive change, innovative companies require not only continued discipline and foresight, but also product design solutions that enable them to rapidly embrace change and shift product directions quickly to stay competitive.
Points to Ponder: Companies without the vision and tools to respond to disruptive change swiftly could lose in this competitive high tech market. Click here to learn more.
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