There is a good article over at Re-Code by ex-Microsoft VP Steven Sinofsky called "The Four Stages of Disruption". It describes the evolution of products and markets through disruption, drawing from Sinofsky's own insights and also building on the work of Everett Rogers ("The Diffusion of Innovations") and Clayton Christensen ("The Innovator's Dilemma.") There are few software industry execs with as much experience in shipping billion dollar software products as Sinofsky. And he understands how brutal it can be to manage large teams. In my view, Sinofsky is always worth reading, though he can be a bit, ah, verbose at times.
There are dozens of examples of disruptive technologies and products. And the reactions (or inactions) of incumbents are legendary. One example that illustrates this point would be the introduction of the “PC as a server.” This has all of the hallmarks of disruption. The first customers to begin to use PCs as servers — for application workloads such as file sharing, or early client/server development — ran into incredible challenges relative to the mini/mainframe computing model. While new PCs were far more flexible and less expensive, they lacked the reliability, horsepower and tooling to supplant existing models. Those in the mini/mainframe world could remain comfortable observing the lack of those traits, almost dismissing PC servers as not “real servers,” while they continued on their path further distancing themselves from the capabilities of PC servers, refining their products and businesses for a growing base of customers. PCs as servers were simply toys.
At the same time, PC servers began to evolve and demonstrate richer models for application development (rich client front-ends), lower cost and scalable databases, and better economics for new application development. With the rapidly increasing demand for computing solutions to business problems, this wave of PC servers fit the bill. Soon the number of new applications written in this new way began to dwarf development on “real servers,” and the once-important servers became legacy relative to PC-based servers for those making the bet or shift. PC servers would soon begin to transition from disruption to broad adoption, but first the value proposition needed to be completed.
Sinofsky makes a number of good observations on how markets and products evolve through disruption. But there is a certain irony to reading about disruption by a Microsoft exec. Is Microsoft a disruptor or a disruptee? I'd say Microsoft has been on both sides of the disruption equation.
In the early days, Microsoft was a pioneering company that created vast new markets where none existed. If Microsoft products were not initially the best in their categories, their persistence and steady release cycles gave them the features they needed to beat competitors in just about every category in which they competed, whether operating systems, applications, or networking software. There were some notable exceptions, such as Microsoft's failure to beat Quicken in personal finance software. But in general, Microsoft was the 800 pound gorilla in the market and few were brave or foolish enough to tackle them head on.
The most clear example of Microsoft being a disruptor was it's entry into "back office" markets for server software as Sinofsky described. The "Wintel" combination of Windows server software and Intel X86 architecture had a profound effect on redefining the server market. It enabled large corporate Enterprise customers to move server workloads off expensive proprietary Unix systems for a fraction of the price. You could argue that SQL Server was not as good as Oracle or that NT was not as good as Unix, but for many users it was "good enough." And Microsoft was smart enough to add Enterprise DNA to the company to help them build this new class of software. I'm sure in some cases the incumbents saw what Microsoft was doing, but dismissed it's solution as mere "toys." And by the criteria of the incumbents that was exactly so.
But where did all that disruption mojo go in recent years? The emergence of smartphones and cloud-based software left Microsoft flat-footed. New versions of Windows have been acknowledged failures. It's rebooted it's mobile and cloud offerings several times. And in the last couple of years there's been a steady stream of departures from the executive suite including Sinofsky, Bob Muglia, Hank Vigil, Craig Mundie, Ray Ozzie, Robbie Bach, J Allard, and soon Steve Ballmer.
In the mean time, Apple, Google, Amazon, Salesforce, Box and others have been the innovators coming up with new cloud-based offerings and products that have disrupted incumbents including Microsoft, HP, Dell and others.
So what do you make of Sinofsky's article? How is it disruptors get disrupted? Let me know in the comments.