- Intel is purchasing security firm McAfee for over $7.6 billion, aiming to integrate its chips with McAfee's software and services to constantly monitor new threats
- Ford is enabling customized configurations of its cars' software, which could range from transmission preferences to music, GPS software and much more
- Nokia spent over $8 billion to purchase a single company specializing in mapping software, and has supplemented that move with big spending on buying and developing other software and services to differentiate its handsets
- Procter & Gamble has created a string of car washes branded "Mr. Clean" in an attempt to move into this highly fragmented, $35 billion industry
- Scotts has moved its lawn care brand into the lawn services franchise industry
Moving into services has become a hot business strategy. Consider just some recent examples:
Everyone loves innovation. Yet people tasked with starting an innovation program quickly find that there are innumerable roadblocks. Why do these exist, and what can you do about them?
Usually, innovation roadblocks exist because current practices help staff to accomplish certain objectives, and shaking things up will threaten those aims. Perhaps these objectives have not been officially articulated -- and they may create benefits more for individuals than for the company -- but they are quite real, and all the trappings of innovation (one can imagine a vast sea of ping-pong tables and purple paint) will not obscure the fact that the organization adheres to these anti-innovation priorities.
Rather than leaping for the paint cans, or even planning a series of capability-building initiatives, organizations do best when they start an innovation program by following three simple principles:
Today's filing by Skype of a pre-IPO S-1 contains volumes of interesting data about the company's potential to tackle new markets. On top of the company's present accomplishments (among them -- 560 million registered users and 1H 2010 revenues over $400 million), the firm seems to have tremendous growth potential.
That growth will come in ways distinct from how the firm has often touted growth in the past. At 560 million, the company's user base has limits on how much further growth is feasible given the total penetration of PCs/Internet cafes, and limited appeal of the service to people lacking the occasion to call overseas. Rather, growth can come through monetization. With current paying users spending around $8 per month, there is ample potential for these sums to increase, even compared to typical spend of heavy cellphone users in emerging markets. Less than 2% of Skype's users currently provide revenue to the company, providing vast headroom to expand.
Revenue potential lies not only in the ability of Skype users to call from their PC to phones for a small fee, but also in areas such as:
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