Despite technological advances, some things remain constant in our ever-changing world. I shared the story a while back about how customer feedback led to the establishment of our now global, multi-billion dollar OEM business. 22 years on, customer feedback is as important as ever. We’re always keen to understand changing market trends and what we can do better.
Listening to OEM decision makers across EMEA
True to form, we recently commissioned the analyst team at Futurum Research to conduct an independent, global OEM Partnership Survey which included canvassing the views of 272 senior decision makers in OEM-type business models across EMEA, mainly in the UK, France, Germany and Spain. 94 percent of those surveyed were either primary decision makers or key influencers.
The survey included the full spectrum of businesses from 500 to 50,000 plus employees with the majority coming from the category of 1,000 to 4,999 employees. In line with our diverse customer profile, industry sectors included Consumer Products, Healthcare/Pharma, Defense, Energy and Utilities, Banking and Finance, Industrial plus Media and Technology.
Key EMEA takeaways
As we move into 2019, I believe that the report provides valuable insights into current trends and provides a window into the future of the OEM market. My marketing colleague Ethan Woods has already shared his views on the overall survey here. Today, I want to share the key EMEA takeaways.
Overcoming barriers to innovation
What jumped off the page for me? As head of Dell EMC OEM in EMEA, it’s gratifying to see that over 80 percent of respondents in the region say that OEM relationships and solutions have helped them overcome barriers to innovation.
Faster time to market
In the competitive marketplace, it’s no surprise that decision-makers say time to market matters more than ever and that finding the right technology can make the difference between winning and losing. How do you keep up with complex and rapidly evolving technology? Well, 82 percent say they’ve been able to empower their business and embrace new and emerging technologies by outsourcing development efforts to OEM partners.
At present, over a quarter of businesses have leveraged OEM partnerships to deploy Augmented and Virtual Reality solutions (currently the single largest area of focus), but I anticipate that Artificial Intelligence and Machine Learning (currently at 24 percent), IoT (currently at 13.5 percent) and Blockchain (currently at 16 percent) will grab more of the spotlight this year.
How much faster?
Drilling down, the ultimate question is, how much faster do OEM partnerships help in translating ideas into market offerings that can drive business value? While 55 percent said their incremental increase in deployment was between 11 and 30 percent faster, it’s great to see that 21 percent cite between 31 percent and 50 percent faster time to value.
Moreover, the majority of EMEA respondents cite OEM partnerships as either very or critically important in achieving measurable business goals centered around competitive advantage, increased revenue and improved customer experience.
Partnership speeds internal transformation
Faster to market for customer-facing products and services is great but being innovative within your business is equally important. When asked, if OEM relationships had specifically helped “your organization accelerate product/service innovation efforts”, 89 percent give a resounding yes. However, the value of OEM partnerships doesn’t stop there.
In fact, over two-thirds say OEM partnerships are very or critically important to improving or accelerating their efforts in digital transformation (82 percent), IT transformation (75 percent), security transformation (74 percent), and workforce transformation (68 percent). Relatively speaking, while workforce transformation lags at 68 percent, I believe this is largely due to the complexity of it being a technology, people, and physical asset play and I believe this will increase over time.
Cost reduction benefits
In terms of cost reductions, the results highlight a clear “OEM over internal” benefit with at least 35 percent of respondents estimating a 21 to 40 percent cost reduction for initiatives in customer service, manufacturing, sales & marketing, distribution & logistics, plus research & development.
The right technology matters most
And now, we come to the burning question – what matters most for customers? Respondents rate product performance and features, scalability, cost reduction and business unit requirements as the most critically important decision drivers when choosing to go with an OEM partner, highlighting a common theme in technology today: more for less.
And while custom engineering and contractual flexibility are currently ranked behind these factors, I believe that this will change over time to reflect the growing importance of emerging technologies. In my experience, customers are already beginning to opt for more flexible contracts along with financing options as this enables them to be more agile and adopt new solutions faster.
OEM partnerships set to increase
Looking ahead, over 71 percent of respondents say they expect their use of OEM partnerships in EMEA to increase over the next year with 12 percent predicting a dramatic increase while only 23 percent predict that it will remain steady.
Huge opportunity for sales growth and cost reductions
Interestingly, the report predicts that the global market opportunity for adoption of OEM partnerships is significant, indicating that it could grow by a CAGR of 20 to 25 percent over the coming decade. The good news is that Futurum also believe that companies that engage in above-average levels of OEM partnerships can accelerate sales growth and cost reductions by an impressive 35 and 45 percent by 2025.
Finally, according to the report, as emerging technologies, such as AI, Blockchain, AR/VR, mature, they will become increasingly “table stakes” for businesses looking to establish long-term trust with their customers – if you don’t have them you won’t find a seat at the table.
Are you in the OEM business in EMEA? What do you think about the market? I’d love to hear your comments, predictions and questions.
Learn more about this survey! A summary global infographic is available here or you can access the survey report here.
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