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Technology Innovation and the changing software landscape. Matthew Deacon Chief Architectural Advisor Developer & Platform Group, Microsoft Ltd. Disruption is nothing new. Innovation at the Edge. Organisation/ Enterprise. Markets & Industries. CORE. Geographies and Economies. Generations.
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Technology Innovation and the changing software landscape Matthew Deacon Chief Architectural Advisor Developer & Platform Group, Microsoft Ltd
Innovation at the Edge Organisation/ Enterprise Markets & Industries CORE Geographies and Economies Generations “The edges will become the primary source of business innovation” Opportunities Migrate to the edge “The Only sustainable Edge”, John Hagel & John Seely Brown
Technology Innovation and the changing software landscape Disruptive Technology
General Question Posed by Joseph Bower & Clayton Christensen… 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?
The Answer? Joseph Bower & Clayton Christensen claim to have the answer, in their HBR article and in their book(s): It is because the new technology was or is Disruptive…
Technology Innovation and the changing software landscape Disruptive Technology Scenario: Disk Drives
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 SUSTAININGINNOVATION This can either be RADICAL or INCREMENTAL sustaining innovation • Conner • 3.5” 10MB DDs • Market <$50M Catching the Wave, Bower & Christensen http://harvardbusinessonline.hbsp.harvard.edu/relay.jhtml?name=itemdetail&referral=4320&id=3510
Disk Drive Disruption • SEAGATE • 1980 pioneered 5.25” DD • Revenues $700m by 1986 • MARKET & ATTRIBUTES • IBM & PCs • Capacity 40-60MB • Price (Cost/MB) • Performance Capacity up 50% / year In 1987 met mainstream demand of PC Market 3.5” 10MB DDs DISRUPTIVE • Conner • 3.5” 10MB DDs • Market <$50M • NEW MARKET & ATTRIBUTES • Compaq & portables • Size • Weight • Power consumption Catching the Wave, Bower & Christensen http://harvardbusinessonline.hbsp.harvard.edu/relay.jhtml?name=itemdetail&referral=4320&id=3510
Disruptive Impact Performance Offered by mainstream Disruption Required by market Offered by new technology Initial performance Time
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…
Technology Innovation and the changing software landscape The Era of the Web
The evolution of Architectural Styles Gartner Applied SOA: Transforming Fundamental Principles Into Best Practices. 4 April 2007. G00147098 SaaS Web 2.0 Web GUI PC
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” Community “Software + ServiceS” Management Application License Location Reach http://blogs.technet.com/matt_deacon Six Characteristics of SaaS
Technology Innovation and the changing software landscape SaaS As a Disruptive Technology research
Reseach Questions www.idauser.com/Serrula/ida.dll?ar&sid=7820 • 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?
Disruptive Technology Framework A. B. 1 Existing Product Existing Market What are the key needs from an existing customer perspective? What are the key attributes of a traditional product 3 5 4 D. C. New Product New Market 2 What are the key needs from a new market customer perspective What are the key attributes of the new product
SaaS Scenario Siebel and Salesforce.com • 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
SaaS Scenario • SIEBEL • Complex, commitment • High upfront costs, CAPEX • Maintenance, Support • MARKET & ATTRIBUTES • Large corporations • Reliability, Scale • Unique requirements • Flexibility Online version DISRUPTIVE ?? • 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 Desktop version
Generic SaaS ISV Scenario • EXISTING PRODUCT • Scale • Customisation • Training • Maintenance, support • EXISTING MARKET • Complex integration • Control, consistency • Flexibility • Privacy SUSTAINING?? DISRUPTIVE ?? • 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
Summary “If we cannot necessarily predict [the future] we need to at least anticipate it” Hagel & Brown • 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.
www.idauser.com/Serrula/ida.dll?ar&sid=7820 ThaNK you! Matt Deacon mattd@microsoft.com Blogs.technet.com/matt_deacon