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‘Superstacks’ Affecting Companies, Says Accenture

[Techtaffy Newsdesk]

Mobility, enterprise computing and consumer electronics companies in the high-tech industry are being heavily impacted by a new business model called “superstacks,” according to new Accenture research. 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.
The research also revealed that the primary driver of superstacks will be the mobility market, particularly in the smartphone arena where superstack-based products have already been made commercially available. The research found that more mergers and acquisitions will occur as superstacks continue to coalesce in the digital ecosystem.
The research findings, based on interviews with high-tech executives globally and interactions with clients, are summarized in a new report, Competing in a High-Tech Industry “Superstack.” The research examined whether industry executives were aware of the superstack trend and its impact on their businesses, such as smartphones and tablets (mobility), data centers and the cloud (enterprise computing), and the digital home (consumer electronics).
The report summarizes results of phone interviews with 30 executives of large high-tech companies including chief executive officers and vice presidents of strategy and business units. An overwhelming majority (83 percent) of the respondents said they have been or are being impacted by superstacks. Seventy-one percent said they have formalized their superstack strategies and set priorities such as owning critical intellectual property assets, fostering collaborative cultures across the stack, and managing strategic initiatives. Virtually all (96 percent) said superstacks bring their companies more opportunities than threats.
“Competing in the superstack arena is a matter of survival as the high-tech industry moves full-throttle in this direction,” said Mitch Cline, managing director of Accenture’s Electronics & High-Tech business. “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.”
When survey participants were asked which industry forces they expect would have the biggest financial impacts on the high-tech industry over the next three years, more than two-thirds (70 percent) cited mobility. Cloud computing and consumerization of IT in enterprises followed with 50 and 43 percent, respectively.
“Fueling new business models in healthcare, financial services and retail, mobility is by far the most powerful and biggest game-changer creating the need for super­stacks,” Cline added. “With mobility superstack battles now spreading to enterprise and consumer markets, the implications are profound for all high-tech players.”
When asked to speculate on a superstack strategy for the next few years, more than three-fourths (77 percent) of survey respondents said they would anticipate an increase in merger and acquisition (M&A) activity. Participants were asked to give their top three reasons for pursuing such M&A transactions as part of their superstack strategies during the next two to three years. Half cited acquisition of intellectual proper­ty; the same percentage pointed to R&D to accelerate product deliveries. Forty-three percent specified gaining access to more talent, employees and expertise. More than one-third (37 percent) of respondents cited expanding product portfolios into new services.
“The superstack trend will prompt an intense burst in M&A activity and greater competition on multiple levels, especially in acquiring intellectual property and talent,” Cline added. “Winners will have tightly integrated, highly effective superstacks leveraging operating systems – the heart of superstacks – and delivering services and content to users seamlessly and securely. Superstack winners will excel at coordinating with other companies and disseminating research and development capital across superstacks.”
 
Research Methodology
Participants included representatives from the following industries: communications technology (5), consumer technology (8), enterprise technology (9), semiconductors (4), and software (4). The geographic breakdown of respondents was: Europe (13), North America (8), Asia Pacific (9); of these 30, six were done with emerging market players. Eighty percent of the respondents work for companies with annual revenues of $2 billion or more.
You can find a copy of the entire report at the Accenture website here (registration required).
[Image Courtesy: Accenture]

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