By Simon King
In the article "Disruptive Innovation Comes to Healthcare" Thomas Lee, Professor of Medicine at Harvard Business School, suddenly realizes that the emperor has no clothes.
"We instantly understood that our heads had been in the sand."
In seeing how other industries have been completely transformed by lower cost options for what look like simpler needs take hold and expand to command significant market share.
This has happened many times before. A good example is what happened to the US steel industry in the 70's when the innovation of minimills started to take hold.
Initially the minimills targeted the lower quality segment of the market with a much lower cost product. Then they gradually improved the quality and volume of their product to serve the high quality and higher margin segments of the market. In time they totally changed what had been an industry controlled by large vertically integrated steel manufacturing.
"1% shifts in market ... trivial .. compared to possible 20% movement ... to lower cost disruptive innovations."
With Salesforce and Amazon driving tremendous innovation, Cloud and SaaS are looking like the next major disruptors for the software industry. What are your plans to avoid unpleasant surprises and to be ready to take advantage of the opportunities they offer? Please share your thoughts in the comments.
In the article "Disruptive Innovation Comes to Healthcare" Thomas Lee, Professor of Medicine at Harvard Business School, suddenly realizes that the emperor has no clothes.
"We instantly understood that our heads had been in the sand."
This has happened many times before. A good example is what happened to the US steel industry in the 70's when the innovation of minimills started to take hold.
"It was like World War I trench warfare, where a 1% shift in market share was a big deal. "
Initially the minimills targeted the lower quality segment of the market with a much lower cost product. Then they gradually improved the quality and volume of their product to serve the high quality and higher margin segments of the market. In time they totally changed what had been an industry controlled by large vertically integrated steel manufacturing.
"1% shifts in market ... trivial .. compared to possible 20% movement ... to lower cost disruptive innovations."
With Salesforce and Amazon driving tremendous innovation, Cloud and SaaS are looking like the next major disruptors for the software industry. What are your plans to avoid unpleasant surprises and to be ready to take advantage of the opportunities they offer? Please share your thoughts in the comments.
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