InformationSpan presentation July 2010

1. Disrupt or disappear?
questions for Corporate IT
Tony Law
27 July 2010
Disruptive IT: The Shift from Innovation to Commodity
The Corporate IT Forum evening CIO meeting
The image on this page is of Ferrybridge power station cooling towers, which
collapsed in high wind due to the unforeseen funnel effect of the first row of
towers on 1st November 1965.
This document contains notes summarising the presentation. All the referenced
Internet-sourced information is available without subscription.
http://www.knottingley.org/history/tales_and_events.htm#Cooling%20Towers
http://www.informationspan.com/
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2. Different understandings of disruption
Anticlockwise from bottom right:
Weather: can be anticipated in general although unpredictable in detail. Short
term, after which life returns to normal
Oil spill: BP’s 2010 disaster disrupted many societal aspects – and BP’s
business. At this point there is no guarantee of a return to normal
Printing: this technology changed power structures across Europe. This is a
replica of Tom Paine’s press; his publications influenced both the French and
American revolutions. Permanent changes in both the 15th and 18th
centuries, establishing a new normal
Railway travel: major societal change spreading the ability both to travel and
to market perishable goods. The additional unexpected change was the
establishment of a uniform “railway time” which created time zones. These
were also disruptive changes which established a new normality.
http://tompainepress.blogspot.com/
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3. Disruption isn’t always about technology
isn’
Ryanair: like the railways, changed patterns of travel with impact on the
towns now brought within reach. Aeroplanes were a well established
technology, but this model disrupted the whole industry and the change to
this and to society’s expectations of travel have been permanent.
Oxfam’s report and campaign in 2001 regarding the cost of antiretroviral
drugs for HIV in the developing world has changed the rules of the global
pharmaceutical industry permanently. Its impact was partly because of
alignment to the development of the Internet, which changed people’s
attitudes to privately developed intellectual property as well as being able
to rapidly publicise and communicate Oxfam’s concerns.
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4. News media and crowdsourcing
0
Wikipedia
Wikipedia exemplifies the new Internet-mediated approach to content
creation. It wasn’t originally thought of as a medium for topical content.
The linked video is a time-lapse of the first 24 hours of the Wikipedia entry
for the London 2005 bombings. From an initial short posting it rapidly
develops and evolves structure; maps and pictures are added; and at one
point (just short of 2 minutes through) an abusive anti-Islamic message is
posted and, as rapidly, deleted.
This exemplifies the change to the model of news gathering. This was going
on while mainstream news reporters were still trying to find a way to get
their stories back.
Main news media now embrace this perforce, and use it to engage their
user groups “Your pictures”, comment boards. It’s still settling; Premium
content media (FT, WSJ) are going the other way behind paywalls.
http://en.wikipedia.org/wiki/7_July_2005_London_bombings
http://www.youtube.com/v/s8O-hv3w-MU
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5. Where’s the disruption?
Where’
Closer to corporate IT: Dell disrupted the PC market on price point, mass
customisation, and fast response. Corporate IT eventually got on board,
and Dell became corporate supplier
The same has happened to Google
In the case of the iPhone, the effect is partly just the cool (people want
them, corporations find themselves supporting them). But in the consumer
market the new and disruptive element is Apple’s iPhone app store, which
is a new way to get code to market. Smart enterprises are taking
advantage for the right sectors of their user base.
Emergence of “I can do it at home – why not here?” as a user attitude to
corporate IT.
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6. Obligatory references
 Disruptive Technologies: Catching the Wave. Joseph L. Bower &
Clayton M. Christensen, Harvard Business Review, 73, 43-53 (1995)
 Foundations for Growth: How To Identify and Build Disruptive New
Businesses. Clayton M. Christensen, Mark W. Johnson & Darrell K.
Rigby, MIT Sloan Business Review (15 April 2002)
 Clayton M. Christensen, 2003. The innovator's dilemma : the
revolutionary book that will change the way you do business. New
York: HarperCollins.
 The Innovator’s Solution: Creating and Sustaining Successful
Growth. Clayton M. Christensen & Michael E. Raynor. Harvard
Business School Press, 2003. http://www.theinnovatorssolution.com/
 See Wikipedia: http://en.wikipedia.org/wiki/Disruptive_technology
Clayton Christensen is recognised as the source of much of the thinking
about disruption. It’s a key point that Christensen has moved on to talk of
“Disruptive innovation”, no longer of “Disruptive technology”.
The Bower & Christensen paper can be located as a PDF at a number of
locations including
http://apps.business.ualberta.ca/mlounsbury/techcom/readings/disruptive%2
0technologies.pdf. The Wikipedia article is a useful general outline.
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7. Bower & Christensen
This chart is from the paper by Bower and Christensen (it’s simpler than
the one usually reproduced, from The Innovator’s Dilemma).
Two key quotations, relevant for the way corporate IT is managed:
“Managers must beware of ignoring new technologies that don’t initially
meet the needs of their mainstream customers”.
“Every company that has tried to manage mainstream and disruptive
business within a single organization failed”.
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8. Obligatory definitions
a disruptive technology Disruptive Technology: High
one that causes major change in potential for disruption to IT or
‘the accepted way of doing the business, the need for a
things’, including business major financial investment, or the
models, processes, revenue risk of being late to adopt.
streams, industry dynamics and Séminaire Cloud Montpellier
consumer behaviour March 2010
from a press flyer for Emerging
Tech roadshow
These are alternative definitions from respected sources. Note especially
the IBM reference to the risk of being late to adopt.
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9. Where do we look?
 Insight services
• Gartner the “natural” source, better on emerging tech and trends
• CIO Executive Board and its cohort
• Corporate IT Forum??
 Tech gurus like Ian Pearson (Futurizon)
 Tech mavericks and leaders like Euan Semple
 Vendors who invest substantially in research
• IBM
• Microsoft
• CSC, through Leading Edge Forum (with its Study Tours)
 University research
• a vendor may be a better gate; going direct demands commitment
 Providers with a different angle
• like BT in early Internet days
 Blogs and similar (like Horizon Watching)
 Go and see!
These are sources culled from personal experience and contacts. Among
the recognised insight services, Gartner are pre-eminent (and deservedly
so) in reviewing emerging technologies and trends; but they have perhaps a
lesser track record in identifying disruptive changes early.
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10. Search results: Gartner
 Virtualization
 Data Deluge (Forrester’s “X Internet”)
 Energy & Green IT
 Consumerization & Social Software
 Unified Communications
 Mobile & Wireless
 Complex Resource Tracking
 System Density
 Mashups and Enterprise Portals
 Cloud Computing
This list of “ten disruptive technologies 2008-2012” was published in 2008
and (in the absence of visible evidence to the contrary) does not seem to
have been updated. The list was monitored and re-reported by Horizon
Watching in July 2009 and is still current in the publicity for a July 2010
webinar.
http://horizonwatching.typepad.com/horizonwatching/2009/07/gartners-
latest-list-of-disruptive-technologies.html
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11. Search results: IBM
Despite the positive technology investment outlook, Wall Street professionals cite lack of IT
staff and high implementation costs as the biggest inhibitors for technology implementation –
which remains consistent with findings obtained in 2009. To overcome some of these
challenges, the [financial] industry is showing a larger appetite for disruptive
technologies such as cloud computing (61 percent) to force business model
change.
[press release 23 Jun 2010: SIFMA Financial Services Technology Expo]_
Two examples from IBM. The first is from the proceedings of a quasi-
academic conference and it’s an open question whether desktop
supercomputing is truly a disruptive technology (outside the niche areas
where high powered processing is important).
The interesting point about the second example is not that it refers
explicitly to Cloud Computing, but that its impact is seen as changing
business models (presumably, of IT provision) and also that the event from
which this report came is a financial services industry one. Disruptive
possibilities are being recognised within the business community.
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12. IBM Global Technology Outlook
IBM’s GTO is updated regularly. It focusses on societal as well as
technology issues, including those of relevance to the developing world.
Possibly a useful source to scan.
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13. Search results: CIO Executive Board
Demand-Side Changes Trends that are important
1. Rise of the Knowledge Worker but will likely not
significantly change IT’s
2. Ubiquitous Data
value drivers, structure, or
3. Social Media skills include
4. Emerging Market Growth  green IT
5. Efficiency Shortfalls  greater government
6. Tech-Savvy Workforce intervention in the
Supply-Side Changes economy.
7. Technology as a Service
8. The Industrialized,
Externalized Back Office
9. A Blueprint for Service
Delivery
10. Desktop Transformation The Future of Corporate IT, cio.executiveboard.com, 2010
This information was serendipitously discovered.
CIO Executive Board (and its sister groups in the Corporate Executive
Board team) operate a model midway between the analyst-led working of
major insight firms such as Gartner, and the user-led workshop format of
the Corporate IT Forum. Information is researched and structured by
Executive Board staff, but the information comes from clients.
The CIO Executive Board itself focusses strongly on strategic issues.
Although reports are not generally available without subscription, this
document is currently linked behind a marketing graphic at
http://cio.executiveboard.com/
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14. http://www.timtim.com/
Disruptions get tamed.
Disruptive innovations follow one of three paths, in all cases ceasing to be
disruptive.
(a) they become mainstream and contribute to a new normality
(b) they retreat into an appropriate niche but have little wider impact
(c) they cease to be relevant
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15. Case study: social media
 email and online forums changed communication lines
• and scared a lot of corporate people in the 1990s
 they did change the culture
• which became the new normality
 blogs, Facebook and twitter are doing it again
• and have changed our attitudes to information sourcing
 good alignment with new business models
• business is disaggregated, the networked business is crucial (LEF)
social media are still in the disruptive phase
In the case of interpersonal communications, history is repeating itself
from about 15 years ago.
In the mid 1990s, many personal email accounts (Compuserve, etc) were
used for corporate business. There was no equivalent corporate facility.
The corporate response was often ignorance: we did not know how many
people were doing this, nor the costs being charged to expenses. Or the
reaction was to point to the risks (possible virus infection, leakage of
intellectual property, damage to company reputation, etc). Of at least
equal significance, but less rehearsed, was the potential of the new
communication lines to cut across and disrupt command-and-control
management structures.
These risks were real, but in the end accepted as manageable. Corporate
(external) email became part of a new normality to the point that we now
receive more email than we can handle.
Current “social media” are re-creating the disruption, the fears, and the
arguments. But today’s business is disaggregated. Interpersonal as well as
inter-business networking is crucial. There is a good fit with the potential
of these new tools, but they are still in the disruptive phase.
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16. Case study: Cloud
 Started in the consumer/small business space
• e.g. AWS (LEF Study Tour, 2005) and Google Docs
 Adopted by enterprises
• small tasks, flexibility, p-o-c, research
• consumer-style business models
 Savvy business users adopted it disruptively
• corporate credit card, IT not involved
• or do it at home!
 salesforce.com brought it into mainstream
 Now it’s just outsourcing
• security models
• compliance and audit
• service levels and dedicated hosting
• long term contracts
Cloud is no longer disruptive
There’s a good case that Cloud Computing, very much the technology du
jour, is no longer disruptive. Discussions in Corporate IT Forum
workshops now centre around service levels, long term contracts, KPIs
and business risks.
Cloud email in particular is handled as a variant of outsourcing; a recent
workshop (20th July 2010) made this point explicitly. More generally, a
recent Forrester report makes the same point:
“Forrester believes that cloud computing is a sustainable, long-term IT
paradigm, and the successor to previous mainframe, client/server, and
network computing eras.” The Evolution Of Cloud Computing Markets,
Forrester Research, Jul 2010
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17. What’s in it for us?
What’
lef.csc.com
Leading Edge Forum observes an increasing disconnect between IT service
users and the services they are using in the enterprise. There has been a
crossover at the point where facilities available to them privately became
more capable, in many ways, than those provided at work; and where their
private expertise (as non-IT professionals) because sufficient to handle a
range of tasks such as installing applications, configuring the machine, and
building and managing networks.
http://lef.csc.com/research/commentary/may/its-role-in-engaging-and-energizing-
employees
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18. Disruption ≠ novel or emerging tech
a disruptive innovation may not be about new
technology
a disruptive innovation is one you don’t see
coming
• otherwise it’s planning!
• unless you’re the person that has the idea
a disruptive innovation is ...
the one people are afraid of!
There can be a strong overlap between identifying emerging technologies
which facilitate innovatio, and identifying technologies and ideas which may
be used disruptively; but it’s important to realise that they are not
necessarily the same.
A good response is to watch developments: scan widely; learn to identify
trends quickly; and plan for disruption as a general scenario, although you
don’t know what the particular will be.
Know how to either facilitate changes or reason them away – in business
terms. But simply to block them because of perceived risk or lack of
understanding is counter-productive both for business opportunities and in
IT’s relationship with its user community.
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19. Origins and evolution
Starts almost anywhere
• today’s mainstream IT companies were garage start-ups
• Facebook was an internal Harvard student idea
• Google was based on a student project
Critical mass can come before funding
Evolution is to mainstream, niche or death
• but all these are control models!
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20. What’s the impact?
What’
Can bypass corporate IT
... or complement services for business benefit
Can change service models
Does change user expectations
Does change the questions users ask
• “I want Skype”
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21. Effects of disruption
 100% dependent on the company’s vision
• disruption ≠ innovation but ...
• innovation can = leverage from a disruptive change
• “never waste a good crisis”
• think about “risk appetite”
 Despite fears, Corp IT is not out of business
• but the shift from controlling to enabling is a hard one
• ... and it is not just about a different outsourcing model
 Remember Bower & Christensen: mainstream and
disruptive businesses don’t sit well together
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22. Disrupt or disappear?
 Disruption is only
disruptive for a while.
 After that: mainstream,
niche or irrelevant ...
 ... and so may we be!
 Catch the wave?
 Or wait for it to pass (it
may do!) and risk being
swept away?
http://www.timtim.com/
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