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ARCONIinventedawaytosendmessagesthrough
theair,theItaliangovernmentturneddownhisofferoffirstrightsbecauseitsaw
nouseforthetechnology.Afterall,Marconi'scrudeprototypecouldonlysendsig-nalsahundredyards—hardlyamatchfortheincreasinglypopulartelephone.
Whowouldhaveknownsuchaweaktransmissionmethodwouldpavethewayfor
everythingfromtelevisiontocellularphones?Evennow,100yearslater,wirelessisstill
openingupnewmarketsandchangingthewaygovernmentsandbusinessescommu-nicateandoperate.Marconi’swirelessinventionrepresentswhat’scalled“disruptive
technologies.” These are technologies—the internal combustion engine, transistors
and the personal computer, for example—that not only create new industries, but
eventuallychangetheworld.
Disruptivetechnologiesoftencomefromoutsidethemainstream.Thelightbulbwasnotinventedbythecandleindus-trylookingtoimproveoutput.Ownersofestablishedtechnologiestendtofocusonmakingincrementalimprovements
Count on it. Although the problem is nobody really knows what a
disruptive technology might be until it, well, begins to disrupt. National
laboratories, research institutions and corporations are nevertheless
in the throes of innovation.
by Joab Jackson
Is There a
Disruptive Technology
In Your Future?
SPECIAL REPORT:
Disruptive Technologies
totheirownproducts,avoidingthepotentialthreattotheir ownbusinesses.
Investorsandentrepreneursmustkeeptrackofmove-mentsoutsideestablishedmarkets.Somethingsuchasthe personal computer or the Internet is always just around thecorner.
Two potentially disruptive technologies today are open-sourcesoftwareandnanotechnology.Eachholdsthe promiseofradicallychangingthelandscapeofinformation technology.
The concept of open-source software, for example, challenges many notions about how software should be createdandsold.Linux,developedundertheopen-source license,isalreadyprovokingturmoilinthemarketforoper-atingsystems.
"Ifyouareanentrenchedproprietarysoftwarevendor, thisparadigmshiftcanbealarming,"saidJohnWeathersby, chairmanoftheOxford,Miss.-basedOpenSourceSoftware Institute. However, companies that exploit the growing open-sourcesoftwaremovementingovernmentcancrack new markets, especially in the Department of Defense, wherenumerousofficesareusingopen-sourcesolutionsas low-costalternativestocommercialsoftware.
The same holds true for nanotechnology. Although still a few years out, nanotechnology can be exception-ally destructive as small, cheap computational devices are placed in everything from shoes to unmanned aerial vehicles.
"ItwillcausepeopletorethinkthepotentialofIT,"said James Ellenbogen, senior principal scientist of the nano-systems group at the Bedford, Mass.-based Mitre Corp. "When you make something a thousand times smaller, youcrossatransitionlinewherethingsthatformerlywere impossiblesuddenlybecomeobvious."
OPEN-SOURCE SOFTWARE:
GROWING IN GOVERNMENT
WhenWeathersbyfoundedthenonprofitOpenSource Software Institute in 2001 to promote the idea of open source to government agencies, one of his first tasks was todeterminehowmuchthissoftwareactuallywasusedin thepublicsector.
Useofopen-sourcesoftwareinthegovernmentsector isdifficulttoquantify,becausethesoftwareisusuallynot obtainedthroughregularprocurementchannels.
Under the open-source licensing model, called
the GNU General Pu b l i c
License, a program that is availabletothepublicmust
alsohaveitssourcecodeavail- able.
Thisapproachallowsprogram- m e r s
to modify existing software w r i t
-ten by others, rather than having to write it from
THE ‘FATHER’ OF
DISRUPTIVE TECHNOLOGIES
ClaytonChristensen,a professorofbusinessadmin-istrationattheHarvard BusinessSchool,introduced theprinciplesofdisrup-tiveinnovationinhisbook, TheInnovator'sDilemma: WhenNewTechnologies CauseGreatFirmstoFail (1997).Thebookhelped managersunderstandhow anorganizationthatdoes everythingright—listensto
customers,keepsacloseeyeonthecompetitors,and investsheavilyintechnologicaladvancements—may leaditselfdownaroadtofailure.Whenunderstood andapplied,theprinciplescanguideorganizationsto tremendousgrowth.Thelessonshelearnedfromhis extensiveresearchprovideaframeworkfordetecting andcounteringdisruptivetechnologies.
Dr.Christensenhashisownconsultingfirm, Innosight,LLC.Thefollowingreviewistakenfrom thecompany’swebsite,<www.innosight.com>.
WHAT YOU SHOULD KNOW
ABOUT DISRUPTIVE TECHNOLOGIES
• Technology just keeps getting better .Ineverymar-ket,technologyadvancesandimproves—drivenby asetofbehavioral,economic,regulatoryandinsti-tutionalfactors.Companiestakeadvantageofthis byofferingbetterproductsathigherprices,andby listeningtoandtargetingmainstreamandhigh-end users.
• Customers will use a technology, up to a point.
Technologicalprogressinevitablyreachesapoint whereitisfarabovewhatcustomersactuallyneed anduse.Forexample,Microsoft’sExcelisaveryuseful pieceofsoftware,buthowmanyofususeallofthe bellsandwhistlesthatarepackagedinittoday?Many ofusprobablyonlyneedthebasicfunctionalitythat enablesustocreatesimplespreadsheetsandperform non-complexcalculations.
• Overshooting customer needs enables disruption. Whentheleveloftechnologicalprogressisfarabove whatcustomersactuallyneedandcanuse,thephe-nomenaofovershootingcreatestheopportunityfor anupstarttocomeinwithsomethingthat’scheaper, simpler,andgoodenoughforasetofcustomerswho don’tneedtheadvancedtechnology.Oncetheentrant carvesoutapieceofthemarketonthelowend,they
Clayton Christensen
12
TechComm the national journal of technology commercialization | December 2003-January 2004scratch.Italsoallowsprogramstobeeasilycustomizedfor endusers.Mostimportantly,thisapproachhasapowerful cumulativeeffectthathasresultedinalargepoolofhigh-quality,freelyavailablesoftwarethatcantaketheplaceof sometimesexpensivecommercialsoftware.
Weathersby's organization worked with the Naval OceanographicOfficeunderaNavyCooperativeResearch Development Agreement to find where open source was used within the service. Preliminary findings found that useofopen-sourcesoftwarewasextensive.
"IT departments were using free and open-source software...butforthemostpart,thepurchasingorpolicy-makershadnoideathat[opensource]waspartoftheir ITstructure,"Weathersbysaid.
The institute's findings were reinforced by an Oct.28reportthatidentifiedmorethan115 open-sourceprogramsbeingusedin251 tasks. Results were compiled from e-mail surveys. Open-source software programsthatareheavilyused withinPentagonorganiza-tions include the Apache Webserver,thePerlscript-inglanguage,theLinuxoperating systemsandtheSendmailmailtransfer agent,accordingtothereport.
Governments in other countries are taking notice as well. Red Hat Inc., which sells a version of the Linux operating system, hascountedmorethan50countrieswith policies in place to consider the use of open-source software, said Michael Tiemann,chieftechnologyofficerfor theRaleigh,N.C.,company.
Tiemann named Britain,
Venezuela,SwedenandSouthKoreaasexam-ples. Some governments, such as China, deliberately use open source as an alternative to becoming depen-dent on U.S. commercial software companies. Having the source code on hand, officials can be more assured the software has no back-door entrances to allow spying or disablement. "If a country is building an information technology infrastructure from scratch, and it has an alternativeofbeingcompletelyindependent,whywouldit becomedependent?"Tiemannsaid.
Not that such enthusiasm hasn't met with resistance but commercial software vendors may find it difficult to compete with an identical product available for free, or onethatallowsformorecustomization.
With the growing popularity of Linux, for instance, companies are getting the message that "operating sys-tems aren't tremendous value-adds," said Chris Willard, research vice president of International Data Corp., Bedford,Mass.
Not surprisingly, software giant Microsoft Corp. has mounted a campaign to discourage use of open-source softwareinthefederalgovernment.
"We consider Linux a competitive threat, but we are
happy to compete," said Keith Hodson, a spokesman for Microsoft Federal. Because free software still needs to be supportedwithservices,Microsoft'scommercialproducts mayhavealoweroverallcostofownership,hesaid.
Many companies have been looking for other ways to workwiththeopen-sourcemodel.Forexample,thebulkof RedHat'srevenuedoesnotcomefromsoftwaresales,but fromservicesitofferstosupportthesoftware.
InDecember2000,IBMCorp.announcedthatitwould spend$1billionindevelopingandmarketingLinux-based servers, middleware and new technologies, such as grid computing.
"Whydidwedevote$1billiontosomethingwecan-not control? It wasn't philanthropy. Our cus-tomersweredemandingit,"saidDanielFrye, who is director of IBM's Linux Technology Center.
IBM'sstrategywithLinuxisto"sellthehard-ware under it, the softIBM'sstrategywithLinuxisto"sellthehard-ware over it and the
services around it," Frye said. Linux was a key component in the compa-ny's 2001 win of the National Science Foundation's three-year, $53 million grid computing project to tie together
laboratoriesaroundthecountry.
NANOTECHNOLOGY: MAKING IT REAL
Nanotechnology may be best known in works of fic-tion—Michael Crichton's latest novel, Prey, features
swarmsofmicroscopicmachinesrunningamuck— buttheU.S.governmentisinvestingveryrealdol-larsinnanotechnologyresearchanddevelopment.
Thepresident'sfiscal2003budgetcallsfor$710 millionfornanoscalescience,engineeringandtech-nology, according to the National Nanotechnology Initiativeprogramoffice.[Thebillthatwaspassedinthe SenateandHouseinthecurrentsessionputstheNational NanotechnologyInitiativeintolawandauthorizes$3.7bil-lionoverthenextfouryearsforthecreationoftheNational Nanotechnology Coordination Office and the funding of federalgovernmentnanotechnologyprograms.]
Firstenvisionedinthe1960sbyphysicsacademicians, nanotechnology is the technique of building devices on nanometerscale,orabillionthofameter.
"The laws of physics are completely different at that level," said Philip Kuekes, chief architect at the research labsofHewlett-PackardCo.,PaloAlto,Calif.
Building devices from individual atoms promises no end of inventions. In his book,The Investor's Guide to NanotechnologyandMicromachines, GlennFishbineenvi-sionsapostage-stamp-sizechemicalanalysismachinewith protein,DNAandchemicalsensorsthatcantakeasample ofbloodandreturnacompletegeneticanalysis.
DISRUPTIVE,fromPage12
aerial vehicles to gather environmen-talinformationinatheaterofcombat.
Although much nanotechnology researchaimsatenhancingtheprop-erties of clothing and other materi-als through molecular-level design, some researchers are developing tiny electronic devices that ultimately will extendthereachofinformationtech-nology.
The Defense Advanced Research Projects Agency, or DARPA, is one of the prime movers in bringing nan-otechnology-based computational devices to fruition. Its nanometer-scale molecular electronics program, which relies on universities and the private sector, has set an ambitious timetabletobringsomebasiccompo-nentsonline.
Mitre Corp. is performing design, simulation and integration tasks for the program. It is part of a team that plans to deliver a nanocomputer memoryin2004.Thisworking16kilo-bitnanomemorywillbe10micronsby 10 microns, or about 30 to 100 times the density planned by the comput-er industry for its memories in 2004, accordingtoEllenbogen.
"This is not simply literature researchandwritingaboutnanocom-puters. We're collaborating directly withgroupsthatarefabricatingnano-memory systems," Ellenbogen said. "Fromthatexperience,wecanseethat thisprogramisgoingtosucceed."
At the same time, the company also has begun developing a proto-typeofamillimeter-scalerobot,about the size of a housefly, which will be driven by seven nanoscale comput-ers, Ellenbogen said. "The goal is to see if you can have a nanocomputer networkonaverysmallplatform,This networkhastoworktogethertomake therobotwalk."
Raytheon was part of a team that also included MIT and DuPont that won a $50 million contract from the Army to establish the Institute for Soldier Nanotechnologies, an organi-zation that will take basic nanoscale research and apply it to developing smartuniforms.
These uniforms, applied with
nano-scaled sensors and coatings withuniquelycustomizedproperties, willbeabletohealwoundedsoldiers, saidNedThomas,directoroftheinsti-tute.
"YOUWANTTOKNOWwheretheguys
are,what'swrongwiththem.Youcan evenimaginethesuitbeingactivated to do something," Thomas said. "A soldier has a wound but is uncon-scious,soyousendasignaltothearm of the suit to close down and make a tourniquet. "We're looking at the soldier as a system, even a system of systems,"Thomassaid.
"If you go look at MIT's vision of the suit, it really is the integration of a large set of different technolo-gies," said Bruce Snider, director of scienceandtechnologyinitiativesfor Raytheon'sTactical Systems Business Unit and program manager for the institute'swork.
Other companies are jumping into the game with research into the manufacturing processes that will be needed to mass produce nanotech-nology devices. Many companies see nanotechnologyasanaturalsolution for the rising cost of a chip fabrica-tion.
Today, according to industry experts, it costs a chip manufacturer an average of $3 billion to build a factory for a new line of computer microchips—a cost that is expected toexceedmorethan$10billioninthe comingyears.
Plants now coming online can carve out features in silicon with a resolution of less than 100 nanome-ters, but, thanks to the industry's competitivedrive,featuresetsonthe chipssoonwillbescaleddowntothe levelofindividualmolecules(approx-imately3nanometers).
As the level of required pre-cision increases, so will costs. Nanotechnology would provide an alternativetothisincreasinglyexpen-siveproposition.
IBM's research in nanoscaled technologies,ifsuccessful,woulddis-rupt the entire semiconductor fabri-cation business with a cheaper way of building microchips, said Philip Wong,aseniormanagerofnanoscale materials, processes and devices at IBM'sResearchdivision.
"We're interested in developing new ways of building devices using molecular self-assembly. There are a lot of techniques that the chemistry worldhasbeenusingthatallowmate-rials to assemble themselves," Wong said. By relying on natural chemical forces to forge components, the cost ofproductioncanbecutradically.
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TechComm the national journal of technology commercialization | December 2003-January 2004• But it’s not really about the technol-ogy. It’saboutthebusinessmodel. Small,nimble,disruptivefirmscan
“Identifying disruptive footholds for products means connecting with specific jobs that people—your future custom-ers—are trying to get done in their lives. The problem is that in an attempt to build convincing business cases for new products, managers are compelled to quantify the opportunities they perceive, and the data available to do this is typi-cally cast in terms of product attributes or the demographic and psychographic profiles of a given population of potential consumers. This mismatch between the true needs of consumers and the data that shapes most product development efforts leads most companies to aim their innovations at nonexistent targets. The importance of identifying these jobs to be done goes beyond simply finding a foothold for a new product. Only by staying connected with a given job as improvements are made, and by creating a purpose for your brand so that custom-ers know what to hire, can a disruptive product stay on its growth trajectory.”
—TheInnovator'sSolution:Creating andSustainingSuccessfulGrowth, byClaytonM.Christensen andMichaelE.Raynor(Harvard
BusinessSchoolPress,2003).
“A dearth of good ideas is rarely the core problem for established companies. Potentially innovative new ideas seem inexorably to be recast into attempts to make existing customers still happier. We believe that many of the ideas that emerge from this packaging and shaping process as me-too innovations could just as readily be shaped into business plans that create truly disruptive growth."
—TheInnovator'sSolution
“The disruptive technology almost always takes root in a very undemanding application, and the established market leaders almost always try to cram the disruption into the established applica-tion. In so doing, they spend enormous amounts of money and fail.
"’Does this technology innovation constitute a threat to me or is it in fact a great growth opportunity?’ If you look back in history, the disruptees always viewed new technology as a threat. In reality, they were all poised on the brink of a big growth opportunity. But because the way they reacted was first to discount this innovation as meaningful and second to frame it as a threat, they ended up getting killed. So the first thing is to look at disruptive technology as a growth opportunity and not as a threat.
“Now, there's a problem with this. There's a lot of work in cognitive psy-chology that suggests that if you take a phenomenon to somebody and pose it to him as a threat, it elicits a far deeper response than if you take the very same phenomenon and pose it as an oppor-tunity. So there are deep reasons why people frame change as a threat. In fact, if a manager hopes to elicit an aggressive response, framing it as a threat is almost
critical.” —Inc.Magazine, February2002
“A disruptive innovation is a technologically simple inno-vation in the form of a prod-uct, service or business model that takes root in a tier of the market that is unattractive to the established leaders in an industry. Very often this occurs at the low end of a market —that is how Toyota attacked General Motors, for example. Or it takes root by providing a simple and inex-pensive product that enables a new population of custom-ers to begin participating in a new application in the market—as was the case with personal computers.
“I don't feel that this concept of disruptive technology is the solution for everybody. But I think it's very important for innovators to understand what we've learned about established companies' motivation to target obvious profitable companies— and about their inability to find emerging ones. The evidence is just overwhelming.”
—Inc.Magazine,February2002
“There are many methods for search-ing for innovative new products and ser-vice ideas. While each has its strengths and weaknesses, in our experience most senior managers’ assessment is that the weakness of many methods outweigh their strengths. We believe that a funda-mental, underlying cause of the weakness in so many innovation efforts is that inno-vators’ view of customers, markets and competitors is formed from the supplier’s perspective. They have not worked to define the world in the ways that custom-ers see it. In our experience, trying to understand what jobs customers hire particular products and services to do for them is a method that has a much higher probability of creating exciting, market share-changing new products and ser-vices—because when it is executed cor-rectly, it focuses innovators on developing precisely the attributes and functionality that the precise job that the customers need to have done.”
