As executives in the technology space well know, running software, hardware and technology service businesses presents unique management challenges. On one hand, new markets and competitors continue to emerge, driven by innovation around seven general themes:
- IT architecture shifts (e.g. "thin" client, peer-to-peer, virtualized resources)
- Emergence of new computing and communication platforms (e.g. smartphones)
- Pure technical innovation (e.g. public key encryption, page rank algorithms, ATM switching)
- New business models (e.g. software as a service, ad-sponsored search)
- Emergence of new ways to communicate (e.g. IM, SMS, VoIP)
- "Accessory" opportunities created in the wake of platform success, such as platform specific utilities
- New applications generated by business processes or consumer activities shifting to IT-supported models (e.g. service parts logistics)
The examples change every year - and in some industries more frequently - but the themes are perennial, and change is constant. In general though, the new supplements rather than supplants the old, resulting in an increasingly complex landscape.
In parallel to this continued innovation, many "older" swaths of the high-tech industry are maturing, following the same classic patterns seen in other industries:
- Increasing competitor concentration
- More incremental product innovation
- Increasing customer segment specialization
- Globalization
- Migration to lower-cost channels
- (De)regulation
- Architectural, platform, format and business model shifts
- Growing role of private equity firms in restructuring industry segments facing growth challenges
Bain's Technology experience We have worked with clients in computer software and hardware, semiconductor, IT services, storage, components and peripherals segments. Our clients include five of the eight largest PC manufacturers, three of the five leading software manufacturers and many key participants in the semiconductor industry. Our experience extends across the globe.
Bain helps companies in all stages of industry and life cycles. We help:
Market leaders think through how acquisitions, adjacency moves, refined customer segmentation, improved salesforce effectiveness, strategic sourcing and cost reduction efforts can help them maintain, or even increase, their advantage.
Companies who have hit a speed bump find defensible niches, overhaul their cost structure, think through and execute potential changes in capital structure.
Emerging players continue their trajectory by helping them to scale their organizations and processes to the increased complexity of their market participation.
Private equity portfolio companies align strategic imperatives with their new owners, develop and implement plans to improve operational performance.
To find out more about our work in this industry, please contact Bain's Technology practice. |
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