New market entrants do not necessarily see the existing business vertical as an integrated unit like the current range of well established companies. Newcomers experiment, simplify and carve out what has value or they redefine the service to what customers really want but never got.

Here follow a few examples of companies following that recipe:

Newcomers carving out “the secret sauce”

A largely unobserved but vital ingredient in Apple’s success with the iPhone was to isolate the regulated part of the functionality. A major contributor to the mobile phone paradigm shift from each-product-its-own-software-variant into the huge app eco systems of iOS and Android releases is attributed to eroding the originally mandatory FCC/ITU (telecom approval bodies) approval for the complete phone including software, menu texts & graphics.  It started in small scale with the shipment of phones with the Java engine encapsulated which created a cradle for small separated apps. Apple’s iPhone however changed the mobile market as the cellular data connectivity from the beginning was a small corner of a general computing device that mainly used WiFi and apps for many other purposes than traditional phones. Thus, the FCC/ITU lost control of the rest of the entity but Apple still certified each radio module proving specification compliance.

Medical equipment going digital 

A similar development may face medical equipment verticals outside FDA’s traditional regulatory control of the industry. Potentially disruption looms from new business models of sensory gadgets – including sending digital data to an already FDA-approved cloud, compliant to harsh data storage regulations in every relevant market.

Industry automation is data analysis

The German company Beckhoff has developed PC-based connectors for PLC’s, industry data busses and proprietary industry software. By offering software updates and a flexible hardware set-up they can virtually take any industry set-up and create centralised, cloud-based data analysis, clear trend visualisation and simplified handling of big data. For a production company this means that they can abstract the otherwise technical and not value-creating discussion about interfaces and protocols to the much more important discussion of faster and better engineering.

The automobile industry is changing 

With Tesla as the prime example, the automobile industry has realised, that the value of service and continuous updates constitute a significant change of customers’ preferences to a car manufacturer’s value proposition.

Tesla has managed to comply to automobile regulations while continuously updating the product in a software fashion. For Tesla customers, this has changed their perception of a car from an “as is” product to a changing entity.

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