Altimeter’s Take: The Technologies That Matter from SXSW 2013

By Chris Silva (who’s cross posted on his blog) and Jeremiah Owyang, Industry Analysts at Altimeter Group

Technologies are Emerging at an Increased Rate –Making Tracking Harder than Ever
SXSW is no longer about disruptive technologies being launched, instead, it’s a mainstream, it’s a mainsteam festival, actually) and digital leaders at today’s large corporations are already present, and you should be too.  In fact, the amount of data created about the topic had nearly double year over year.   Altimeter Group was well represented with 9 analysts or researchers at SxSWi this year, with a large team in Austin tracking what’s disruptive. Long known for launches of big names such as Twitter and Foursquare, as well as those with more hype that long-term staying power like Highlight – would be past its prime and recycling yesterday’s news.    If you weren’t able to attend, Altimeter has captured the salient highlights to showcase here:

Major Festival Themes

  • Hardware was king.  Hardware was king at an event long vaunted as a software and service launching ground, as evidenced by long lines for keynotes by Makerbot founder Bre Pettis, and Tesla, SpaceX founder Elon Musk who spent a lot of time devoted to how hardware-based endeavours like the recent Dragon rocket launch can disrupt an industry as complex as space and airline transportation.
  • Android curiosity is getting the better of early adopters. We had many conversations with current iPhone users who were openly discussing their desire to “try the other side” and get an Android device. Interestingly, this curiosity was based more on their gripes with iPhone than with specific Android features they sought. Further, most of the users we spoke with were not working for organizations that had adopted Google Apps for Enterprise and were hoping for tighter integration, they simply felt that, as one person put it, “it has to work better than this thing,” while shaking a shiny new iPhone 5 in the air. Granted, as screen sizes on Android devices continue to trend up, Samsung’s battery-wielding bike messengers may be a needed accessory to make it through a day of SXSW with our new Android handsets.
  • Software innovation continued, but mobile enterprise was a star. Software was not forgotten altogether, and from the festival that’s brought us many a fun app and game, this year the interest was in work. It seems the developers and mobile-centric brands are finally on-board the billion-dollar-bandwagon that is enterprise mobile development. Crowds lined up around the block to hear about mobile apps for major brands and to help people do their jobs. The era of Angry Birds millionaires while not quite over, is waning and the future is better tools for work that act like the toys we all enjoy on our mobiles. I’ve never been to a conference in a yoga studio – Austin’s Wanderlust Yoga played host to a packed Mobile Saturday event – no less one that’s populated by contorted bodies and over 100 degrees all due to the high demand.
  • Brands were at SXSW in force –followed by the vendors who seek to cater to them.   A number of brands were present, with sponsored pavilions or lounges including Samsung, Pepsi, Oreos, esurance, GE, American Airlines and Chevy.  While many early adopters criticized the infusion of large brands, this event has gone mainstream as every company is a digital company.  To cater to these brands, there were a number of enterprise software vendors present who had sessions, parties, lounges and concerts, including Oracle, Salesforce, IBM, PR agencies, and social software startups including Hootsuite, Sprinklr, Spredfast, Expion, UrbanAirship, MutualMobile, Dachis, Bazaarvoice, Gigya, ExactTarget, and on.

The Technologies That Matter from SXSW 2013

Technology Showcased Example Disruption What it Means
Our rating system includes: Watch, Experiment, Invest, Ignore. Who’s doing it today? Who will be impacted by this new technology if it comes to fruition. Insights and forecasts from our perspective.
Gesture Based Interfaces. (Leap motion, Microsoft Kinnect)Our Call: Experiment Leap Motion, a small, $79 USB device launching in May allows users to control their computers using hand gestures in mid air. It’s able to sense individual finger movements for fine manipulation of objects and apps on screen Leap controllers have the potential to change the way we interact with our computers and will launch for Mac OS and Windows, immediately making the tech available to a wider audiences than Microsoft’s Kinect. Being able to physically interact with the digital will disrupt many software markets. They key to this disruption taking hold is developer support. High levels of developer support, though, or a major buy in from a CE vendor like Samsung for TV use will make or break Leap. Expect to see heavy interest from software vendors in the creative space like Adobe; Corel was running live demos at the event.
3D Printing and Replicators (Makerbot, Call: Ignore A number of 3D printers were on display both in the demo hall, and including one brave entrepreneur who wore one on his neck at parties while it was successfully printing.  Among the vendors include MakerBot, and others. Every brand involved in electronics, consumer package goods, transportation, packaging, supply chain and beyond will be impacted as consumers start to act like producers. Although Altimeter is investing in a demo unit to trial, this market is still very young.  We’ve identified business model opportunities for brand marketers, IP creators and owners of CAD diagrams, and supply chain of the composite and plastic materials needed to print. We believe a significant ecosystem is required before this is a ready market.
Proximity Based Communications, Near Field Communications (NFC, Samsung)Our Call: Invest Austin was awash in proximity based interaction points this week such as the Samsung tectiles; one can imagine that these same pieces of real estate were occupied by QR codes in years past, though the QR was also readily present this as well and not dead. NFC-enabled badges, stickers and posters were everywhere. NFC, due to the potential for quick, almost passive interaction with a mobile device means potential for higher uptake, the problem? Not many devices yet support it and fewer users know what it does. This is still education time. Companies with NFC-enabled products hawked them hard – see Samsung entry below – but users’ have yet to process the idea that, beyond payments, using NFC as an event control point or trigger can usher in instrumented environments. This is a key Android differentiator that we’d like to see more manufacturers support.
Collaborative Economy (Airbnb, Uber, Lyft, Sidecar)Our Call: Experiment Sidecar, Uber, and Lyft were in full force in Austin this year showing how shared resources can make getting around. A great deal of attendees we spoke to used AirBNB to find local rooms and houses to rent, as many Austinites skipped down to avoid the fray. Austin, traditionally short on taxis and public transit – not to mention woefully unprepared for 20k+ visitors, is a perfect market to breed affinity for these tools. These services are disruptors to the taxi service, and hotel and hospitality space. We’ll see many, many more of these services before the market shakes out. If transport, a leading industry in terms of getting to market early, is an indicator, users will have more and more need for distinct value props as many more “me too” services come online.   At SXSW Tesla made motions to offer their car as part of the Uber fleet.
Android’s Rise (Samsung, Google)Our Call: Invest The Samsung marketing machine was working overtime at SXSW attempting to show that a superior experience is possible to the still-ubiquitous iPhones many were carrying. This is good for Samsung and arguably drives Android awareness and interest.  Samsung demo’d their TV and Phones were interconnected. The awareness and interest in Android is great news for Google except that it comes from Samsung and, therefore, muddies the Android brand. That said, when users are shown extremely high levels of service – to wit, bike messengers delivering fresh batteries to Samsung device users – it’s hard to argue with this approach. The Samsung brand is beginning to define Android. This will be difficult for other brands playing in the Android ecosystem like HTC and even Google itself. We can see why there’s some concern from Mountain View around Samsung’s reign in Android. Not investing in Android as an app player or a hardware concern is no longer an option.
Space Exploration (SpaceX)Our Call: Ignore One of the highlights of the show was Elon Musk’s keynote where he demonstrated the privatization of space flight.  His famed quote resonated throughout the event: “I want to die on Mars, just not on impact” The obvious disruption is the impact to commercial airlines as well as government space programs.  That said, the technology is out of reach for all but a very few, though the promise is inspiring. The featured Grasshopper had VTOL capabilities meaning these space capable vehicles could land and depart from regular airports. While exciting, there’s little brands can do to interact with this trend, unless you’re a direct partner.
Augmented and Virtual Reality (Google Glass and Occulus Rift)Our Call: Watch We had many discussions about Google Glass and its implications with many individuals at SXSW. Main concern? How will it work and what will the etiquette be? Everyone from mobile device manufacturers to the purveyors of content on those devices will have to figure out how to play in the AR realm, we have not talked to anyone yet, either mobile developer, hardware player or content magnate that has a plan in mind. Too soon, they all say. We’re bullish on Google Glass and, while we’ve not yet received our Explorer units to demo, we think the market will be very receptive to technology that augments daily tasks and does it in a lightweight way. We see a market emerging for AR-centric content and interactions and brands should be ready to play.
MicroMedia Video (Vine, Memoto)Our Call: Experiment One emerging technology, that could grow is the Vine app that enables iPhone users to create 6 second video clips and share online.  To experience this yourself, see this real time gallery. We also saw a lot of discussion on the Memoto camera. Now that journalism has extended to all consumers and citizens, the simple addition of video can extend a rich media format to micro communications. Expect marketers to enable Vine related campaigns and marketing to condense from the 30 second spot, to the 6 second spot.  Then again people may simply adopt it as a way to “lazy tweet” as videos are so short. Twitter’s backing will certainly help
Quantified Self (Google Shoe, Nike)Our Call: Watch Last year Nike debuted FuelBand at SxSW, this year the technology was everywhere, including a show that quantified activity tracking and encouragement, including a hotly discussed show by Google Shoe that gave recommendations on your fitness activity. The traditional athletic manufacture industry is now inundated with tech companies getting involved.
To a lesser degree, health and fitness services and facilities now find that consumers are self-managing their health by using Google.
We think this market is real and growing, but, much like we see in the enterprise space, a lot of data is getting created and the use cases for that data are lagging behind; further, this is a series of walled gardens that don’t talk with one another yet, and require user-lock in.  Right now the data is dirty and not being aggregated into a way that can be digested.
Memes (Grumpy Cat, Harlem Shake, Meme Generator)Our Call: Ignore Grumpy Cat live appearance, a number of meme generators, popular from the website Reddit.  In particular, Edelman exec David Armano was prolific. Traditional marketing communication may not resonate in the high churn of digital conversations.Harlem Shake, pretty much over with this hip cool kid crowd. Our take?  Good riddance. Real time marketing, while a buzzword, requires modern communicators to morph, bend, and make topics of the moment their own through curation or creation.

Technologies on Life support
So what’s going away? We found that QR code will quickly be disrupted by NFC.  While we saw a few QR codes  present for marketing giveaways, we don’t believe this will persist year over year.  This year, wifi and cellular networks were able to stand the high demand of network, as a result the stunt to make homeless wifi spots, will not re-occur.  Location based apps, such as Highlight, Sonar, and Banjo were not the talk of the town, unlike the year before.

Next Steps
Altimeter identified a number of new technologies and tried to centralize in one comprehensive document.  We will continue to follow these technologies and reference them in our upcoming research of disruptive technologies, for additional coverage, we found the coverage from Verge, of the highest quality, see their 2013 greatest hits.  Companies who want to leverage and take advantage of these new technologies should do the following:

  1. Assemble teams to review the preceding list
  2. Weight, re-rank and rate the technologies as they may apply to your company
  3. Integrate into your existing roadmap for marketing, customer experience, and product roadmap
  4. Don’t try to do it all; many of these technologies will have a long “watch” period, some may never matter to your vertical. However, if you’re spending budget making office Harlem Shake videos, perhaps it’s time to re-allocate some budget to R&D on these new disruptors. Only, of course, if you’re interested in being ahead of what’s new.

We’d love to hear your point of view, what technologies and trends did you see that could matter, let’s start a dialog.


32 Replies to “Altimeter’s Take: The Technologies That Matter from SXSW 2013”

  1. Interesting. When Apple launched the pc, it was a big important company. Then it wouldn’t allow other people to make the hardware and for a long time, languished as a not-so-big-important company.

    That time, incidentally, didn’t have Steve jobs at the helm.

    Even though Apple will be an important company without the iPhone, one wonders if it is deja vu all over again.

    Thanks for the report.

  2. So glad to hear QR codes are phasing out. If I had a dollar for every QR code coaster, car decal, or direct mail piece that I completely ignored…

  3. Always fascinating to see an industry observer do an analysis on “most of the users we spoke with”. How many people did you talk to, 10, 100? Out of how many iPhone users?

  4. Definitely true that – at least in mobile – we’re just seeing the beginnings of market change. Nowhere near a long-term bet in this market yet as it’s super-volatile. Just look at what a company nearly unknown in the market for devices (Samsung) has accomplished and one that seemed infallible after a near 10-year domination in enterprise (RIM) ended up?

  5. Definitely worth noting that our findings here are anecdotal, however, based on 50 or so conversations at the event – some of which were direct feedback, some of which were word-of-mouth, the data trends we’ve seen from the likes of Nielsen and IDC that show massive growth in Android shipments and preference from Samsung in particular are supported “on the street.” I’d posted links to said data before but the commenting engine did not like it, but I’m happy to provide them offline if it’s of interest. chris (at) altimetergroup (dot) com

  6. There are so many problems from the marketer side beyond educating the consumer on how to use. As a consumer, how many times would you keep snapping QR codes if the end result was unsatisfying?

    I snap every QR code I see just as an experiment and have yet to see a single result that wowed me. I’ve seen 404 errors, sites/pages and were not optimized for mobile (duh) and offering that were not in any way unique to the customer experience.

  7. In this Altimeter company gets more success in every stage of their business. All of their business they became gainer from QR code. it was so grateful for them for income..

  8. Glad to know that Altimeter Group was well represented with 9 analysts or researchers at SxSWi this year. Long known for launches of big names such as Twitter and Foursquare, as well as those with more hype that long-term staying power like Highlight.

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