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 / Winter 2010 / Issue 61(originally published by Booz & Company)


The Thought Leader Interview: Vineet Nayar

A World of Opportunities

S+B: What are the most important trends that will define the next decade?
The megatrend of technological simplification has produced a shift in focus for us and for our customers. When everything from power to TV entertainment comes through a utility, why not information technology, too? Are we ready for this? No, but it is coming anyway. Licensed software will go away, and people will pay per use for all software and information technology services.

Already, competition in our industry is increasingly based on customizing IT experiences for particular groups, creating service packages tailored for them. We will ideally reach the point where a chief information officer in a given company will care more about what he or she needs from IT and what to pay for it, rather than how it is being delivered and produced.

Computer-based systems are embedded into everyday life, which means consumers themselves are less dazzled by IT bells and whistles. They are not averse to rapid change, as long as it helps their lives positively. Applications like Twitter and Facebook will grow even more disruptive in the future, because the habits of the younger generations are reflected in them.

We are also seeing more Internet devices delivering new services, including in emerging markets.

S+B: For example?
For mobile phones in India, text messaging [known technically as short message service, or SMS] has been more important than voice. When the SMS application was created, however, few observers saw it as a technology that would quadruple mobile phone usage. It may be popular in the U.S., but it is much more important in India, where SMS can change a user’s livelihood. A fisherman out in his boat can send an SMS to different markets and take his boat to wherever the price is highest. Likewise, a farmer who is taking his grain to a wholesale shop can go to wherever he can get the best price. [See “A Gandhian Approach to R&D,” by Abhishek Malhotra, Art Kleiner, and Laura W. Geller, s+b, Autumn 2010.]

The trend toward vertical convergence — a blurring of the boundaries between consumer categories as we have traditionally known them — is extremely significant. In the U.S., Apple is as much a music company as it is a computer company. Similarly, Bharti Telecom is the largest distributor of music in India. This convergence, along with the emergence of new channels, is disrupting existing business models and creating new ones. There is no reason why your mobile phone, two years from now, cannot be your personal health meter for medical conditions that your doctor would like to monitor, sometimes in real time.

This goes back to the concept of our engineering-services team expanding engineering opportunities outside the products and into creating ecosystems around them. For example, we’re helping a telecommunications manufacturer create a next-generation product, designed to allow all of the employees at a company to enjoy the same features and level of functionality, whether they work at headquarters or in a small and distant satellite office. We’re not only building the product, but also building the ecosystem that end-users will log in to.

Another key trend is the adoption of “smart energy.” This is an emerging need felt by industry and political leaders, but it is also being accelerated by the new consumer affection for social causes. Major technological investments are visible in both alternative energy sources and the smarter usage of energy generated from traditional sources. This will affect many devices and services. Energy-consuming devices in homes and businesses will need a lot of embedded technology to tap into energy in a smarter way.

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