5. Introduce pay as you go to attract complementary revenue streams
Technology companies should explore consumption-based business models. Recent EY research found that over 90% of TMT companies already generate a portion of their revenues from Anything-as-a-Service (XaaS) models, with subscriptions being the dominant form. Companies cited market trends, competitors and generating additional revenues as a reason for their transition. Customers want flexibility in how they pay, but some prefer the predictability of per-seat subscription payments, while others like the flexibility to scale up or down with usage-based payments. In the market, some of the challengers leverage usage-based pricing to displace slower moving incumbents. So, to attract new revenue streams and protect their market share against aggressive challengers, tech companies that have moved to subscriptions should ready themselves to adopt pay as you go business models as well.
6. Leverage analytics tools to optimize revenues
Tech companies have invested in analytics tools to increase visibility into the supply chain and pick up early warning signs to mitigate risks and prioritize expenses. But data analytics are not just useful to optimize processes in the supply chain, they can also be leveraged for revenue optimization. For technology companies, that is a very attractive proposition. They often have data-rich product offerings, and software products come at low marginal costs, making pricing a key variable to improve results. Analytics tools can be deployed to calculate outcomes of different strategies under different scenarios for inflation, geopolitical uncertainties and other risks. It will also help companies think through prices for a myriad of different business models.
7. Invest in edge ecosystem to improve operations and experiences
Tech companies should address the need to invest in distributed computing next year. As the Internet of Things (IoT) expands, enterprises need to process increasing amounts of data from, for example, contactless payments, robotic manufacturing, smart home sensors and self-driving vehicles. Transferring this data back and forth to large enterprise cloud platforms for processing is very costly and time consuming, when rapid real-time responses are needed. Enterprises need intelligence in their network at the level where the data is collected, locally, at the edge of the network. Edge computing reduces response times and changes operations at a local level. But it requires new IT architectures to ensure security and resilience of operations. Investing in the edge ecosystem will help streamline processes and improve customer experiences.
8. Cyber, cyber, cyber…ensure data protection
Like every year, investing in cybersecurity will be a top priority in 2023. The amount of data keeps growing; the size of company networks expands through edge computing and hybrid work; the number of bad actors increases due to geopolitical tensions; and fines for failing to protect data increase due to increased regulatory scrutiny. New technologies, such as quantum computing and blockchain, are changing the parameters of threats and security. Yet, while the risks of data breaches increase, technology companies keep building their business models on collecting, transferring and analyzing customer data. Data protection, including security, privacy and transparency, should be a key element of every customer proposition. Tech companies should engage with partners and vendors to pilot the latest tools and technologies to safeguard infrastructure security, product security and data protection