In these rapidly changing times, businesses are being consistently reminded that standing still is not an option. The phenomenon of disruptive technology is set to redefine who the major cloud-based service providers of the near future are likely to be.
The disruptive technology trends that Nigel Watson of Amazon Web Services was referring to at the recent Xero Roadshow Asia 2017, are those of continually expanding software as a service (SaaS) market. According to Watson, SaaS is probably going to be one of the most disruptive technology trends in history considering its impact on the global software market.
Platform Innovation Background
Startups in areas such as HR, Life Sciences, Collaboration Tools, and BI are, among many others, the ones that are taking advantage of this new disruptive technology. Huge growth spurts that would usually have taken a decade are now happening in a few short years. The downside for many established players is that the sheer volume of the competition, as illustrated by BVP Cloudscape, is eroding software business across the board.
By 2020, one-third of the top 20 market share leaders in most global industries will be significantly disrupted by new competitors (and reinvented traditional ones) that use the 3rd Platform (Mobile, Social, Big Data, Cloud) to create new offerings, new innovation communities, and new ways of doing business.
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Disruptive Technology 2017 and Beyond
IDC predicts that SaaS will be taking $1.00 of every $4.59 of software spend as soon as 2019.
There are huge opportunities and significantly lower entry costs available to businesses that are smart enough to move from on the premise systems across to the 3rd platform, which including mobile, social, big data, and cloud.
Looking at how far and fast this expanding and disruptive technology has come in such a relatively short space of time, potential business users can only wonder at the new technology coming out in the next 10 years. Once they buy into the benefits and outcomes of this subscription economy versus the use of infrastructure, customers are likely to flood into this rapidly evolving software sector.
- Easier to invest depending on growth
- Consumption flexibility
- Pay only for what you need
- No infrastructure drag
- 99.9% accessible on the cloud via API
With the ability to create apps in the cloud and manage the scalable growth of their businesses, owners are able to expand from the startup phase to massive operations within a matter of a few years.
Disruptive Technologies in Practice
The new wave of disruptive technology has already established a strong foothold and it looks set to continue its upwards trend. What this means is that smaller businesses and startups are able to build apps in the cloud and quickly scale their businesses at an unforeseen rate. You don’t have to look too far to identify the smart businesses that are successfully riding this new wave – they’re the ones that have displayed an exponential trajectory in a few years, as opposed to decades.
Spotify – Disrupting the Music Industry
Spotify changed the relationship with music by moving from a single-purchase model to a subscription-based model, founded on the basis of streaming music on demand. Furthermore, in comparison to Pandora, the free streaming online radio, Spotify’s customers had the ability to choose their own songs and create customized playlists. The results speak for themselves.
According to a report by Nasdaq, “In a decade, Spotify has transitioned from a small Scandinavian startup into a global music streaming service with over a 100 million users and an estimated valuation of $8.5 billion.”
Netflix – Disrupting the Video Industry
These days, users will know of Netflix as a subscription-based, TV and movie streaming platform. Of course, the company did not begin like this. When the service was first launched, Netflix had a small target market. These were “movie buffs who didn’t care about new releases, early adopters of DVD players, and online shoppers.” And this, according to Clayton Christensen, is what made the business a true disruptor. Netflix revolutionized the entire video industry and these days, Netflix co-founder Reed Hastings has a net worth of $1.8 billion.
Airbnb – Disrupting the Travel Industry
In his address at the C2 Conference in Montreal, Chip Conley (Head of Global Hospitality and Strategy at Airbnb) explained that the company’s success came from “following trends of disruption in the hospitality business that have been around since the 1950s, and by understanding shifts in consumer behavior.” In less than 10 years, Airbnb has grown from three founders renting our air mattresses on the floor of their San Francisco apartment to 2.2 million homes with 90 million users in 34,000 cities.
Uber – Disrupting the Taxi Industry
Although Christensen argues that Uber has transformed but not disrupted the taxi industry, the company’s success is still obvious. The company offered an alternative to taxis that was cheaper, easier, modernized, and (arguably) safer. In just seven years, this company has gone from zero to a valuation of $68 billion, with Cofounder and CEO Travis Kalanick boasting a net worth of $6.3 billion.
What the world is starting to see is the rise of a new economy where businesses no longer need to own physical products to provide value. In his article with TechCrunch, Tim Goodwin notes:
Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.
This new online business world is growing fast and software producers can no longer afford to invest millions of dollars in static software and infrastructure. These producers need to be reactive and nimble or they will lose customers. This ability to respond quickly is something that AWS has embraced.
One of the most attractive and cost-effective pulls on businesses towards the AWS system is that there are no up-front costs and users only pay for what they actually use without the need of a data management center.
They are rapidly evolving in all aspects of their field of expertise, allowing them to provide businesses with the cutting-edge technology that puts them out front.
With over one million clients in 190 countries of 16 regions, you can be assured that security is a top concern to AWS. Though they have multiple global data centers, they won’t move a business’s data due to compliance regulations.
Xero on AWS
Leading cloud-based accounting software provider, Xero, recently made the move to the AWS platform for a number of reasons, including its ability to handle their growth into using artificial intelligence (AI) and machine learning technologies.
With data security well and truly sorted, Xero can leave it to the experts while they focus on their software and the clients who are using it.
Working Together with Xero
Working closely with a team of ecosystem technology partners including TradeGecko, they are helping clients get the most out of the cloud. Having a platform with thousands of APIs connecting to it leaves them free to focus on their apps, while the TradeGecko team commits more targeted resources to our innovative inventory management.
Rapidly Evolving Technologies
It could have been easy for both end users and developers to have been caught looking the other way thinking that Skype and other voice systems were the pinnacle of such data transmission systems. That, however, has not been the case because the technology has continued to expand with systems such as Alexa and Siri.
The expansion in disruptive technology has more than made room for the capacities to host and manage this type of data and also provides opportunities for integration with IOT (internet of things) including Amazon Echo, Xero, and others.
IOT refers to virtually any device that can be accessed via connection including (but not limited to):
- Philips light bulbs
- Smart Fridges
- Amazon wands and buttons
The promise is of smarter products that will become more efficient over time as systems acquire more data. This means businesses will be able to form closer working relationships with the client and offer levels of service and operational functionality that were previously unobtainable.
The connections between the real and virtual world are set to become smoother and easier with everyone adding to the accumulated data. With the explosion of cheaper devices and increased accessibility by the hobbyist using them, this is likely to be a primary driving force behind the creation of even more new technologies.
From collecting and storing data to easier analysis and sharing, the cloud is providing improved insights and complex analytics at the push of a button.
Through instant access to critical business data streams, this rapidly evolving technology will carry the load so that you and your businesses infrastructures don’t have to. Even better; through reduced data acquisition, businesses are set to save on storage and computation costs too.
With new service innovations that build on big data and analytics, you would think that it really couldn’t get any better. However, the huge amounts of data that can be pulled by the AWS platform are already contributing towards advances in AI and machine learning technologies.
Xero is not the kind of company to rest on their laurels. They are always looking forward to how they intend to build on the innovative frameworks and systems that they have created. With that in mind, they are looking at developing even more client-friendly features in the future.
From real-time engagement with customers and actionable insights to tailored personalization and recommendation services, they intend to develop even more services through the AWS platform. Their clients can look forward to IOT merchandising and even physical monitoring devices that will monitor customer movement data to correlate traffic with their marketing campaigns. This and other innovations are certain to help retailers make the most of their peaks in online traffic.
Add-ons and data accessibility
There is also massive scope for add-ons through such a system for both Xero and their ecosystem partners like our team at TradeGecko. Easy accessibility of data processing is also in the works and there is plenty more scope for expansion on the infinitely expandable AWS platform.
Disruptive technologies: catching the wave
With its far-reaching effects on how we use mobile, social media, data, and cloud, SaaS will continue to deliver its flexibility and ease of use directly into the hands of users. Businesses are quickly switching on to how easily they can control everything and to the massive capacities that the AWS platform has available to them.
Thanks to users and innovators, the future looks certain to be driven by the rapidly evolving markets for voice, data, and IOT.
TradeGecko, disrupting inventory management & B2B eCommerce!
Find out why TradeGecko was Xero's Ecosystem Partner of the Month (Jan 2017)