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Disruptive Technologies

Geoff Anderson back for the Technology Marketing Center after a much longer than anticipated hiatus.  Last time I was here, I talked about how a disruption in service can lead to opportunities, as well as how over reliance on a particular technology can leave you vulnerable, regardless of how reliable it is.  Today I will talk about disruptive technologies.

As readers of Geoff Moore’s “Crossing the Chasm” we are all familiar with the diffusion of new technologies.  It describes an adoption curve, and process that a technology offering will “likely” follow in the market.  Naturally, there are exceptions, and today we will discuss some of these.  If we look back a decade or more, and recall the world of telephony, that was the dawning of the age of Voice over IP or VoIP.  Lead by Cisco Systems, it was a classic example of a disruptive technology.  Until then, there were two distinct networks in the typical enterprise, a data network, and a phone network.  This meant duplication of wiring, of staffing (as telephony departments were traditionally not part of IT), and connections to the outside world.  The original disruption was to replace the inside the walls telephone wiring with a system that provided the same service over your existing data network.  The foundation for this was well understood, and Cisco, as the premier supplier to companies of their networking gear, had all the pieces in play to deliver on this convergence. 

Clearly, it was a successful play, and today, overwhelmingly organizations are buying and deploying VoIP systems.  Today the trend is once again in the replacement of traditional telephony, but outside the building.  A technology called “SIP Trunking” is replacing the traditional Time Division Multiplexing (TDM) connections to the outside world with essentially an ethernet connection.  Many reasons for this, but primarily to reduce the toll and termination charges of a phone call and replace it with a metered bandwidth connection.  This is playing out rapidly, and causing the carriers (the ILECs and RBOC’s in the US) to adjust their business model and product offering.

Another disruptive technology is also playing out in the computing space.  If you think about the number of pad devices being sold, and the tectonic shift away from full feature computers, it is a remarkable evolution.  In the first 9 months of 2010, Apple sold (not just shipped) 15.2M iPad’s.  While we don’t have numbers for 2011 yet, the introduction of the second iteration is clearly on a similar trajectory, and combined with the smattering of Android based devices, it is clear that the netbook and low to mid range laptop market is bearing the brunt of this climb.  Apple hit a trifecta in their initial release.  It was a compelling package (size/weight/performance), coupled with a strong ecosystem to support it with applications (at launch a ridiculous number of optimized applications were available), and provided the features that a large fraction of consumers use computers for (email, web browsing, media consumption).  While they didn’t invent the space, once again, they released a product that crossed the chasm, and did it in an enormous gesture. 

All legacy markets are ripe for disruptions.  However, as should be obvious, disruptions are difficult to plan for in advance.  Sometimes they are well executed flanking maneuvers, sometimes they are completely unexpected entries, and yet other times, they are technologies that shouldn’t be disruptive to the market (i.e. the existing players should have seen it coming).  However they arrive, they provide opportunities for the leaders, and fast followers, and bewilderment for the entrenched players who are left behind.  Until next time, happy marketing!

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