(Bloomberg View) — These haven't been the best of times for Clay Christensen's theory of disruptive innovation. Yeah, it's more famous than ever, but it's become so widely used and misused as to invite a major backlash, and occasionally drive even the Harvard Business School professor and his faithful disciples to protest. There is also, for all the talk, little evidence of a wave of disruptive innovation right now in the macroeconomic data. Worst of all, the most remarkable business story of the past decade-plus, the rise and continued supremacy of Apple, has come in the face of repeated warnings from Christensen that this whole iPhone thing was bound to fail.

So it's nice for those of us who value Christensen's work to see a market still following the script laid out in his 1995 Harvard Business Review article, "Disruptive Technologies: Catching the Wave," and subsequent book, "The Innovator's Dilemma." It goes like this: an upstart product maker or service provider rolls out a new technology to a low-end or niche market that the incumbents ignore, and steadily moves upstream to eat those incumbents' lunch. That's what's been happening in cloud computing services, with the upstart being Amazon. This is from the fascinating new Bloomberg Business account by Jack Clark and Ashlee Vance (in the following passage "Jassy" is Andy Jassy, head of Amazon Web Services): 

"Amazon began using its improved system internally and saw that it could go after a much wider audience than a handful of retailers. "We wanted to enable any individual, in his or her dorm room, to have the access to the same price and cost structure and scalability and infrastructure as the largest companies in the world," Jassy says. Other companies ignored this market and instead pointed their products at top executives in large, traditional business organizations.

 
"Since Amazon was aiming at developers, rather than CIOs [chief information officers], it felt free to roll out an imperfect service and add new features as it went along. "Large tech companies usually wait to launch until they've built all the bells and whistles their development team can imagine," says Jassy. "We thought it was very important to be first to market." By July 2006, just four months after launch, Amazon's S3 storage service held more than 800 million files. The next year, startups such as Dropbox based businesses on cheap Amazon hosting. By 2013, giants like Netflix, which accounts for about one-third of the network traffic in North America on a given night, had committed to the Amazon cloud.Of course, even a giant like Netflix is a new sort of giant. Big, established companies that have been running their own data centers for decades have been warier about making the leap to the cloud, especially Amazon's cloud. Microsoft, which already had deep ties with enterprise clients, has emerged as Amazon's main competitor in cloud services."

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.