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Microsoft in Denial: Google Threat is Classic Disruption | |
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| Time: 00:17 EST/05:17 GMT | News Source: *Linked Within Post* | Posted By: Kenneth van Surksum | ||
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To understand why Google is such a threat to Microsoft--and why Microsoft's pooh-poohing of this threat is, at best, a smokescreen--you need to understand how technology disruption works. Disruptive technologies do not destroy existing market leaders overnight. They do not get adopted by the entire market at the same time. They do not initially seem to be "better" products (in fact, in the early going, they are often distinctly "worse.") They are not initially a viable option for mainstream users. They do not win head-to-head feature tests. Initially, they do not even seem to be a threat. Disruptive technologies take advantage of a new manufacturing/business process or technology to provide a cheaper, more convenient, simpler solution that meets the needs of the low end of the market. Low-end users don't need all the features in the Incumbent's product, so they rapidly adopt the simpler solution. Meanwhile, the Incumbent canvasses its mainstream customers, reassures itself that they want the feature-rich products, and dismisses the Disruptor as a niche player in an undesirable market segment. The Incumbent may dabble with the new technology or process, but only in service of its existing business model. Then the Disruptor improves its products, adding more features while keeping the convenience and low cost. Now the product appeals to more mainstream users, who adopt it not because it's "better" but because it's simpler and cheaper. Seeing this, the Incumbent continues adding ever more features and functionality to its core product to try to maintain its value proposition for higher end customers. And so on. Eventually, the Incumbent's product overshoots the needs of the mass market, the Disruptor grabs the mainstream customers, and, lo and behold, the technology has been "disrupted." |
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Read Only Comments Return to News |
Displaying Comments 1 through 2 of 2 |
This is an archived static copy of ActiveWin.com. |
| #1 By 9589 (71.49.188.113) at Monday, December 17, 2007 03:06:52 AM |
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How we recreate ourselves . . .
Henry Blodget, the author of this article, is of "dot bomb" fame. He got run out of Wall Street for simulataneously publicly recommending dot.com stocks that had no earnings or the prospect of same while privately recommending to his customers that they sell if owned, short, or avoid. Blodget drones on and on about the definition of disruptive technologies, but gives little in the way of how Google is doing this to Microosft. Google's "office" suite does not contribute to its bottom line, is fraught with privacy issues, is feature poor, and just doesn't work very well. Meanwhile, Microsoft just finished a terrific quarter, its stock is up (finally), all divisions are profitable, and its litegation worries seem to have abated (or at least the bilking by the EU, etc., has stopped). The above comments take nothing away from Google. It is stupendous in its ability to produce revenue and earnings. I have made some terrific gains on it rising stock price over the last couple of years. In the search market it is without peer. |
| #2 By 3653 (65.80.181.153) at Monday, December 17, 2007 12:16:25 PM |
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while msft gets all the coverage as the main victim of google... there should be a bit better coverage of how google is the disruptive technology behind the further demise of newspapers, classified ads, etc.
ps... i just LOVE how the media goes from one goliath (microsoft) versus another goliath (google this time) story. Every 2 years, the fight changes. Anyone remember how AOL was gonna kill msft? Netscape? Novell? RedHat? ... |
