Exploring the Limits of the Technology S-Curves – Component Technologies

1. Exploring the Limits of the Technology S-Curves – Component Technologies Clayton Christensen

2. Technology S-Curve Maturity Growth Product Performance Emergence Time or Engineering Effort

3. Technology S-Curve • It has become a way of thinking about technological improvement over a period of time • Theory • Early stages improvement in performance is slow • As the technology is understood and diffused, rate of improvement increases

4. Technology S _Curves • S-Curve - used at the industry level • Incumbent firms are concerned about refining existing technologies • They lose their positions of dominance to new entrants

5. Typologies of technological change • Architectural change • Rearrangement in the way components are relate to each other • Using the motors and fan blades coming up with a table fan • Modular change • Fundamental change in the technological approach employed in a component where the architecture is left unchanged • Changing the type of motor in a ceiling fan

6. Typologies of technological Change (Contd) • Incremental change • Improvements in component performance • Better quality RAMs, memory chips • Radical innovation • Change in architecture and new approach in the component level

7. Using the technology S-Curve at the firm level • Why is harder to get performance improvement as a technology reaches maturity? • Scale phenomenon (things get too large or too small) • System complexity

8. The Disk Drive industry • What is the performance measure for incumbents? • Areal recording density • When resources spent in engineering improve the performance of a technology, there is less of an incentive to switch to alternate technologies.

9. Component and Architectural technologies • Disk Drive System • Component Technology • Read write technology on the disk drive • Ferrite and Oxide Technologies Vs. Thin Film Heads • Incumbents prefer to work on existing technologies and make incremental changes that bring performance improvements • Resource Rich companies invest in radical component improvements • Thin film heads cost IBM over $1 billion and took over 10 years • Architectural technology • Cost significantly less and can be developed in lesser time

10. Timing of adoption • Thin film technology replaced the Ferrite heads • The time at which different firms switched to the new component technology varied over a 10 year period • The extent of performance improvement was also different • IBM was one of the early movers (1978) • Hitachi and Fujitsu switched much later in the mid 1980s • Switching to a new technology did not improve the performance

11. Timing of adoption (Contd) • No relationship between timing of adoption and performance improvement • Early adopters no clear improvement in storage capacity • Later adopters able to work with the technology and improve performance • Companies had different strategies in the way they adopted component technologies • Some companies like IBM choose to switch to new technologies • HP preferred to improve existing technologies

12. Incumbents vs. New Entrants and S-Curves • Incumbents are more likely to succeed wrt changes to component technologies • New Entrants seldom succeed with Component technologies • The story is different with architectural technologies • Component technologies reinforce existing competencies • Architectural technologies look at competencies with a different lens.