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Technology Innovation and the changing software landscape
Matthew DeaconChief Architectural Advisor
Developer & Platform Group, Microsoft Ltd
Disruption is nothing new
• Opportunities Migrate to the edge
Innovation at the Edge
Organisation/ Enterprise
Markets & Industries
Geographies and EconomiesGenerations
CORE
“The edges will become the primary source of business innovation”
“The Only sustainable Edge”, John Hagel & John Seely Brown
DISRUPTIVE TECHNOLOGY
Technology Innovation and the changing software landscape
Why is it so often the case that companies that lead their markets
fail to stay at the top of their industries when technologies or
markets change?
General QuestionPosed by Joseph Bower & Clayton
Christensen…
It is because the new technology was or is
Disruptive…
Joseph Bower & Clayton Christensen claim to have the answer, in their HBR
article and in their book(s):
The Answer?
DISRUPTIVE TECHNOLOGY SCENARIO: DISK DRIVES
Technology Innovation and the changing software landscape
Disk Drive Disruption
SEAGATE• 1980 pioneered 5.25” DD• Revenues $700m by 1986
MARKET & ATTRIBUTES • IBM & PCs • Capacity 40-60MB• Price (Cost/MB)• Performance
3.5” 10MB DDs
Conner• 3.5” 10MB DDs• Market <$50M
Catching the Wave, Bower & Christensenhttp://harvardbusinessonline.hbsp.harvard.edu/relay.jhtml?name=itemdetail&referral=4320&id=3510
SUSTAININGINNOVATION
This can either be RADICAL or INCREMENTAL sustaining innovation
Disk Drive Disruption
SEAGATE• 1980 pioneered 5.25” DD• Revenues $700m by 1986
MARKET & ATTRIBUTES • IBM & PCs • Capacity 40-60MB• Price (Cost/MB)• Performance
3.5” 10MB DDs
Conner• 3.5” 10MB DDs• Market <$50M
NEW MARKET & ATTRIBUTES • Compaq & portables • Size• Weight• Power consumption
Catching the Wave, Bower & Christensenhttp://harvardbusinessonline.hbsp.harvard.edu/relay.jhtml?name=itemdetail&referral=4320&id=3510
DISRUPTIVE
Capacity up 50% / yearIn 1987 met mainstream demand of PC Market
Disruptive Impact
Performance
Time
Offered by mainstream
Offered by new technology
Required by market
Disruption
Initial performance
Disruptive Technologies
Definition (Part 1)
Disruptive technologies introduce a very different package of attributes from the mainstream technology that is currently valued. Furthermore, and most importantly, the new technology performs particularly badly on one or two dimensions that are currently particularly important to current customers.
Disruptive Technologies
• Definition (Part 2)
In addition, to be disruptive, the new technology makes rapid strides on the key dimensions, those on which it massively under-performed initially, to the extent that it becomes competitive even on these dimensions. It thus has the potential to be disruptive to the existing technology…
THE ERA OF THE WEB
Technology Innovation and the changing software landscape
PC
The evolution of Architectural Styles
Gartner Applied SOA: Transforming Fundamental Principles Into Best Practices. 4 April 2007. G00147098
GUIWeb
Web 2.0SaaS
Web 2.0
“Far from having crashed, the web is now more important than ever.”
Dale Dougherty, O’Reilly
Principles• Web as a platform• Collective Intelligence• Data is Next Intel Inside• End of Software Release Cycle• Lightweight programming models• Software above the level of a single device• Rich User Experience
http://www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web-20.html
“Software as a Service”
• Six Characteristics of SaaS
Location
License
Managem
ent
Community
Reach
Application
http://blogs.technet.com/matt_deacon
“Software + ServiceS”
SAAS AS A DISRUPTIVE TECHNOLOGY RESEARCH
Technology Innovation and the changing software landscape
Reseach Questions
• How prevalent are Disruptive Technology Innovations for SaaS?
• What are the indicators of Disruptive Technology?– Pre-disruption?– Post-disruption?
• How can one estimate/measure the impact of Disruptive Technologies?
www.idauser.com/Serrula/ida.dll?ar&sid=7820
Disruptive Technology Framework
20
What are the key attributes of a
traditional product
Existing MarketExisting Market
ExistingProductExistingProduct
NewProduct
NewProduct
New Market
New Market
B.A.
D.C.
11
22
5533
44
What are the key needs from an existing customer perspective?
What are the key attributes of the new
product
What are the key needs from a new market customer
perspective
SaaS Scenario
SIEBEL• Complex, commitment• High upfront costs, CAPEX• Maintenance, Support
MARKET & ATTRIBUTES • Large corporations• Reliability, Scale• Unique requirements• Flexibility
SF.COM• Low upfront cost• Simple, low commitment• Subscription•
NEW MARKET & ATTRIBUTES • SMEs • Pays as you grow/mobility• No IT, good enough• Try before buy•
Siebel and Salesforce.com
SaaS Scenario
SIEBEL• Complex, commitment• High upfront costs, CAPEX• Maintenance, Support
MARKET & ATTRIBUTES • Large corporations• Reliability, Scale• Unique requirements• Flexibility
SF.COM• Low upfront cost• Simple, low commitment• Subscription•
NEW MARKET & ATTRIBUTES • SMEs • Pays as you grow/mobility• No IT, good enough• Try before buy•
DISRUPTIVE ??
Online version
Desktop version
Generic SaaS ISV Scenario
EXISTING PRODUCT• Scale• Customisation• Training• Maintenance, support
EXISTING MARKET• Complex integration• Control, consistency• Flexibility• Privacy
SAAS PRODUCT• Pay as u grow• Quick start• No training, IT, Capex• Market driven features
NEW MARKET • Broad reach • No HR Department• No in-house IT• Flexible
DISRUPTIVE ??
SUSTAINING??
Summary
• Technology continues to evolve at an significant rate– Some sustaining & some disruptive
• Software will be about choice– On premise, in the cloud– Or a mix - Software + Services– With an emphasise being on “Service”
• By understanding innovation we have an opportunity to manage it.
“If we cannot necessarily predict [the future] we need to at least anticipate it”
Hagel & Brown
ThaNK you!
Matt [email protected]
Blogs.technet.com/matt_deacon
www.idauser.com/Serrula/ida.dll?ar&sid=7820
