Corporates courting startups: entrepreneurship in the enterprise

When we spoke to IBM last year, the world’s largest IT company predicted a decrease in consumer-facing startups. New ventures, it said, will be increasingly targeting enterprise environments.

It’s no longer just enterprise heavy-weights such as Oracle, IBM, Accenture and SAP that can compete in corporate environments. Powerful, cost-effective cloud services and bring-your-own-device (BYOD) policies have opened up an industry ready for disruption — slow-moving corporate environments offer opportunities for nimble startups, that can often tailor make solutions.

Still, it remains harder to build solutions for the enterprise. Startups often end up working on larger, more complex problems with higher quality and security requirements. Consider however, that Enterprise IT is predicted to grow to a US$3.8 trillion industry in 2013, and it’s clear why startups are taking a long hard look at enterprise.

The mega corporations are keeping a watchful eye. Oracle recently acquired enterprise cloud startup Nimbula. Pitching sessions at this year’s Unreasonable at Sea were hosted by SAP. Others are proactively courting entrepreneurs to take their brands to new places. Angus Robinson, Director of Mobile for digital agency NATIVE says that this trend was confirmed during the recent Mobile World Congress in Fira Gran Via, Barcelona.

Mondelez International and Unilever are among the big names putting money aside to get entrepreneurs innovating about their brands. Keith Weed, Chief Marketing Officer of Unilever, said Unilever does not have all the answers for taking its brands into the future and is calling on entrepreneurs to bring innovative ideas focused on its brands to the table.

“This wave of involving entrepreneurs in brand innovation could have a major impact and positive outcome for South Africa’s entrepreneurs,” believes Robinson. “There seems to be two opportunities emerging for entrepreneurs. Firstly organisations are providing the funds for existing entrepreneurs to innovate focusing on their brand/s. Alternatively organisations are providing funds for entrepreneurs to get their startup off the ground by working on innovations for the brand. Either way the entrepreneur can leverage off the expertise of a major brand while aligning with the brand and the organisation gets focused innovation. It makes a lot of sense.” The Mondelez Mobile Futures initiative is an example of this concept in action.

Mobile operators are also calling for innovation and driving it too. “It seems that up to now network operators have not been easy to do business with or open enough to innovate freely with and Carlos Domingo from Telefonica Digital was emphatic in his view about how this needs to change,” says Robinson. “According to Domingo, introducing Lean and Agile methodologies, rolling out the OpenAPI initiative, and partnering with entrepreneurs to take advantage of disruptive new applications of mobile computing are all necessary to deliver on the promises that the future holds.”

Along the lines of innovation, CEO’s from some of the world’s largest network operators said the migration from 2G to 3G to 4G has been the fastest technology innovation and adoption in history. Network operators are being pushed to battle with new market opportunities before the previous generation’s ones have been fully realised. “Randall Stevenson, CEO of AT&T, said that we are moving from the mobile era to the LTE and cloud era, for which there isn’t really an appropriate name yet. He predicts that the mobile cloud is one of the biggest business opportunities and challenges that businesses will face in the next three to five years,” reports Robinson.

The investment in 4G/LTE is now a reality with rapid rollout planned this year in infrastructure, devices and services. “China Mobile already has 200,000 LTE base stations live. And they call it a trial! They plan to have 100 cities covered by 4G/LTE by the end of 2013.”

General Motors made an announcement that all its future cars will have 4G/LTE connectivity embedded in them from the design phase of model development, so it is built-in, and not as a brought-in afterthought. The GM Developer Portal provides details of the application programming interfaces available for app and service development. Developers now have a new platform to innovate for.

With more data consumed in 2012 than in all the previous years combined, data growth continues to cause network management challenges and will have to be an area of innovative thinking for the year ahead. Mobile networks are carrying the equivalent of 330-billion MP3s per month in data traffic. “If only 15% of the mobile subscribers have smartphones and this is the amount of data traffic being consumed, imagine what will happen when the other 85% are smartphones. It’s no wonder we need so many undersea cables,” says Robinson, “An exciting innovation from Vodafone was the discussion about its tariff which allows a single data bundle/contract to be consumed by multiple devices. So gone are the days of trying to remember to top up three different SIMs with data.”

Speaking at the Congress, Stephen Elop, Nokia’s CEO, was optimistic about the pace at which this rollout is going to occur, saying connecting the next billion will occur much quicker than the first billion. It’s interesting to note that Nokia has trained over 10 000 people in Indonesia on how to develop apps, and importantly has also provided the business support toolkits to set up and manage mobile app businesses.

Gary Kovacs, CEO of Mozilla Corporation, said he hopes FirefoxOS will become the catalyst to bring the Internet to mobile in a way that is more appropriate and enjoyable for users. In his presentation he pointed out that the first 2 billion people took 20 years to connect to the Internet. The next 2 billion will take five years and will be coming from emerging markets. “It’s now ‘the next generation’, and two or three operating systems or companies cannot service this next generation. Maybe we need to completely change the mobile ecosystem. We need to move from ‘there’s an app for that’ to ‘there’s a web for that’,” he said.

“There’s no denying that innovation is going to be the buzz word for this year. Organisations that are not investing in, embracing and adapting to these innovations will find themselves playing the catch-up game. It’s an exciting time for entrepreneurs and creative thinkers,” concludes Robinson.