A new year usually starts with lots of predictions of what is to come upon us – from summer fashion to politics and mobile handsets.

i2i wants to chime in with our 2 cents about relevant trends in the new year. Of course we will focus on topics we understand –  IT and telecommunication.

1)      Security: The NSA scandal created a lot of awareness of the vulnerability of our daily communication. Especially corporations will increase their security measures to protect themselves against industrial espionage. This offers huge potential both for vendors and service providers.

The average private users will probably not change their communication behaviour, but offerings by service providers with a focus on increased security and privacy may still be appreciated by this customer segment.

2)      Convergence of IT and telecommunication: This trend is nothing new, but considering the enormous potential, there still is a lot of potential for integration, especially in countries with outdated telecommunication infrastructure. For service providers offering services that combine IT and telecommunication (like Unified Communication) has huge growth potential, especially in the Small and Medium Enterprise market. LTE will accelerate this trend even further.

3)      Network automation: The mergers of the past, and also the emergence of new, competitive hardware vendors have led to large service providers with a fragmented hardware ecosystem. This is expensive to operate and prone to failure. Technologies that help service providers to optimize their network management and reduce operation costs will be more and more in demand.

4)      Life science meets IT: Costs for healthcare are rising everywhere. Technologies that help to reduce these costs by automating certain activities, aggregating, analysing and distributing data will be sought after by health insurances and medical institutions.

5)      Social niche communities: Facebook may be on the decline or not. But one thing is certain: Niche communities are becoming more relevant. People like to engage with likeminded, and they don’t necessarily want to do that “in public”. The same applies to brands, who want to engage with their advocates, without relinquishing all their data to the big social networks.

Of course there will be more trends than these ones, and we are not pretending to provide a finite list.

But if you happen to be active in any of the listed areas, you will be in for lots of opportunities in 2014!

There is plenty of news about Europe: good, bad and irrelevant. Companies wanting to take their products to Europe should distinguish between important facts and irrelevant white noise.
Europe is very diverse. Although some countries (especially in the Mediterranean region) are encountering economic problems, many other European countries enjoy a thriving economy (e.g. Germany).
Also in terms of infrastructure, there are huge differences. The Eastern European EU members have done a lot of catching up already, but still have way to go until their infrastructure is at the same level as in Western European countries.
What does this mean for companies wanting to export to Europe?
• Is your product of interest for a fully developed market with high buying power? Then focus on Germany, UK, Scandinavia etc.
• Is your product of interest to fast growing economies, e.g. to leapfrog technological developments? Then look towards Eastern Europe.
• Does your product save cost in some way? Look at economies that are not doing so well, or that have generally a lower buying power.
Of course this is a very superficial view, but the intention is to give a rough idea of the diversity in Europe, and what it means for companies wanting to do business here.

One of the first steps of taking your product global is to define the offering. Will you be offering physical goods, immaterial goods, services or intellectual property (e.g. patents)?

This seems to be an almost stupid question. But when taking a closer look, the answer is not that clear-cut. Let us use the example of a (hypothetical) biochemical substance used in agriculture. Let us also assume it is a proprietary invention, protected by patents. The product is currently being produced and distributed in Canada only. As the global potential for this product is considerable, the producer intends to go global.

What fundamental business models are there to choose from?

1. Distribution of the physical product: The producer will need to find a distribution channel and modify the packaging (depending on the target market). The logistical effort is quite high, and depending on the weight/value ratio and the shelf life of the product, shipping it overseas may not be feasible. On the positive side, the producer will stay in control of most of the value chain, which will be reflected in a high margin.
2. Licensing the production: The producer can probably find a partner, local in the target market, which can produce the product locally. This not only saves shipping and import duties, but also makes obtaining certification easier. Usually, the local partner will also have an existing distribution network. The margin in the scenario will be lower than in scenario 1, as the producer outsources part of the value chain.
3. Selling the patent: Certainly a drastic move, but if the buyer is a global player, selling the patent can be very profitable and relieve the producer from all headaches of going global on a big scale. Our Canadian producer might also be able to retain a license for the domestic Canadian market.

So, when thinking about going global, be open for different scenarios. What is right for your home market is not necessarily right for the rest of the world. Being flexible with your business model, will maximize your success!

i2i specializes in helping ICT companies take their products to the global market. Going forward, we will share some of the more interesting experiences  – but not all 😉 – in a regular blog.

After all, what use is experience, if you don’t share it?