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Strategies for an Evolving IoT Market – Hyperscale, Build Value, or Exit?

The IoT connectivity market is at a key point of evolution. TecFutures sees two main strategies emerging. The first is to build a high volume /hyperscale business through organic growth, and acquisition and the second is to focus on value differentiation as a competitive advantage. The third option is to leave the market altogether.

We analyse these strategies further depending on how a provider is addressing the market. Our analysis summarizes competitive positioning based on a supplier’s market focus and competitive advantage.

There are challenges and opportunities associated with each of these four headline strategies.

Wide market focus / High value proposition:

o   High value but limited shelf life as competitors will seek to move in

o   Rapid need to build ‘hard to copy’ features, re-invent the solution and create new high value markets

o   Options to create niche solutions to leverage

o   Option to create lower price version


Narrow market focus / High value proposition: 

o   Hard to easily compete against / copy

o   But not so easy to broaden the market focus (Not so easy to broaden market focus)

o   Constant need to invest to maintain niche advantage

o   Temptation to offer lower price version / reduce prices to stay in the game


Wide market focus / Cost advantage proposition:

o   Hard to add value by specializing to a narrow market focus without significant investment

o   The much talked about ‘race to the bottom’ on price means that strategic options are more likely cost reductions, or market exit

o   Not all organizations are able to achieve the volume of customers to truly hyperscale and enjoy true cost advantages


Narrow market focus / Cost advantage proposition:

o   Limited options to add value without significant investment

o   Strategic options are more likely to target wider market on cost

o   Market position that is hard to defend in the medium to longer term

o   Become a takeover target from larger low cost players

o   Inability to achieve economies of scale


Read more in our latest report at It is free to download and explores how to build lasting competitive advantage.

To find out more about TecFutures- reach out to Phil Todd and Andrew Parkin-White.

And follow TecFutures for more content and views on successful market strategies to drive revenue and growth.

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