Is cloud computing a final disruptive innovation?

Clayton Cristensen's "Innovator's Dilemma" (Innovator's Dilemma) theory still applies until 2011, and his fans should not be surprised. Obviously, innovation is still important. To understand the role of innovation, look at your computer desktop. Think about how many desktop apps you use on weekdays, and compare it to the amount of cloud services you and your company uses. If you're like most business people, you've been working with slow, painful, cumbersome applications for the past 20 years because you need them to help you run projects, manage customers, and share files. Sometimes it takes months to install software, and sometimes it costs more to maintain than the original product. Sometimes unexpected delays and downtime lead to a noticeable decline in productivity. But with the advent of cloud computing, everything has changed.

The corporate solution provided by cloud computing coincides with Christensen's "disruptive innovation" theoretical framework. They provide a cheaper, simpler and more versatile alternative to traditional enterprise computing patterns. They tend to play the role of a low-end spoiler at first, relying on cost and performance advantages to attract customers who have already been overly serviced. But as the reliability and complexity of these technologies matures, they begin to spread rapidly across the enterprise and begin to address the most important problems of some enterprises. The development of cloud computing coincides with this process. Christensen must have smiled proudly.

All this has created huge trouble for traditional enterprise software giants. These software giants are also well aware of the need for leap-forward innovation, but they lack innovative business models and DNA, and lack the urgency to bite. The world spends more than 270 billion dollars a year on corporate software, but so far only a small portion of that money has been put into the pockets of cloud-computing firms. There is also a lack of clear incentives to push traditional software vendors into the cloud. If these software companies suddenly change, it may confuse customers, disrupt channels, the company's economic imbalances, or lead to ineffective implementation. So the dilemma arises.

Why is cloud computing a disruptive innovation?

Of course, not all innovation is subversive. If a technological advance merely reinforces the position of the existing firm in a particular field, it can only be regarded as a sustainable innovation, not a disruptive innovation. If a technological advance has little to do with the current business model or the mainstream market strategy, or if this technological advance is only a non-linear technology, then other players in the market can be said to be safe. For example, in the storage business area, the performance improvements made by leading storage providers (within a certain range) are often sustainable. The advent of new technologies, such as flash memory, will enable new players on the market to take advantage of the opportunity to make more money faster and to commercialize new technologies. It can be asserted that this situation will continue to occur.

In response to the advent of the Internet, Dell has also followed suit with the launch of the dell.com Web site, but the latter is only a new channel for Dell, selling the product. If you can use the Internet effectively, you will find no significant difference between Dell's previous product catalog and its new Web site (dell.com). However, each market is different. For example, as the entire world to the direction of the transition, reviews the Web site Yelp fills the Yellow pages of the blank, and achieved success. This is not because the web itself is a disruptive innovation that can connect to local information, but because Yelp's user-generated comments provide a new way and experience to provide users with local wizards. Yellow Pages This kind of product lacks the community concept, is meaningless to today's world.

In today's world, nothing is certain, except death, taxes, and the destructive effects of corporate software. In the 90 's, the industry underwent a drastic change after the "user-server" model replaced the mainframe. The New York Times, in the 1995 review of the PeopleSoft and user-server model, said: "The task is redistributed between the user computer and the large host, and is more or less balanced between the two." "This new standard, of course, is now obsolete, represents a drastic change in value, since the application becomes more powerful, more modern, more centralized, and runs at a fraction of the mainframe age, with the use of PC standards."

Fast forward to 15 years later, this large-scale change is staged again. This time, most of the core business applications were moved to the web. So why is cloud computing a disruptive change, rather than an innovation that traditional software vendors can quickly implement?

This is because the cloud software sales, marketing, distribution and application aspects are not the same as before. The sale and marketing of cloud services is bundled with end-user services rather than the managed, top-to-bottom deployments of traditional enterprise software. Cloud computing technology is distributed through the network, the technology acquired by a market leader enterprise is not inherently more advantageous than the technology acquired by a start-up. That is, the distribution of the network is completely democratic, and in the past, software was delivered primarily by partners or software vendors through the most decentralized sales force. Finally, the product itself is almost entirely different. Cloud solutions are faced with a collaborative, mobile, open world.

Traditional vendors in some hardware and software categories are more or less forced to lose the ability to support customers through cloud computing. For example, you can put yourself in the place of a well-known storage vendor, selling hardware primarily to it buyers and service providers. Let's say Amazon is now producing its own storage products and providing it to existing developers and customers because they have reached a considerable scale. So are you going to decide to launch a cloud storage service to compete with Amazon? Most businesses in the storage area don't do this because they have to compete directly with other customers. In this way, many manufacturers will be disadvantaged, must carefully adjust their business model, which became a risk game.

In short, cloud computing has enabled startups to have a unique set of value drivers that allow them to compete at a safe distance with traditional industry strongmen.

Just as MySQL has not even competed with Oracle for customers, bloodless has defeated the latter, and many of today's cloud solutions have taken the same approach to erode the turf of traditional big companies. They have just come out of the quiet, quietly in the "Enough" camp, and then their product roadmap became clearer and began to provide customers with more important services. Unconsciously, "Make it" becomes "very good", "very good" has become "better". Take Salesforce.com (CRM) For example, if you focus on the sales system for more than 10 years, people will find an alarming trend. In the 2002, the fledgling Salesforce.com only accounted for 2% of the Global Customer Relationship Management (CRM) market, and analysts often ignored it. They said: "(Salesforce.com) and Hipolito (Siebel) and PeopleSoft (PeopleSoft) and other large CRM companies in the service is completely not comparable." They are always deficient in function. "However, by the year 2011, Salesforce.com has achieved 2 billion dollars in revenue, customers have grown to more than 100,000, the company is rapidly developing into one of the world's largest software companies."

The same scenario is happening in other new generations of corporate software competitors in the cloud computing world. Many of the cheaper, and fundamentally simpler, applications that have emerged from cloud computing are eating away at the sites of traditional corporate software companies. For example, the ERP cloud solution provider, workday, is no longer just focusing on the midrange market, its market expands very quickly, and recently a contract with Time Warner and Thomson Reuters, which is bound to make Oracle and SAP deeply stressed. Another cloud solution provider, GoodData, recently raised 15 million dollars, as more than 2,500 of its corporate clients realized that the price of corporate intelligence software provided by GoodData was only a fraction of IBM's and Oracle's. As for our box service, customers can store content on box, often at a price equivalent to one-fifth of the traditional system, and customers can access the content on any device that is impossible for any prefab application.

Similarly, many emerging cloud computing companies offer services that are not easy to implement, impossible, or even unnecessary for previous generations of software. Zendesk and assistly, for example, have a more relaxed integration with a large number of systems and play a role as a customer contact point, thus subverting the entire customer support market. Their service is that prefabricated manufacturers have neither the technology nor the funds or the means to do so. Jive and Yammer use an intangible social and streaming model to handle traditional e-mail and collaboration systems, which, of course, are not available to Microsoft, which lacks social skills. Okta and Snaplogic help companies interconnect their identities and application data separately. What is the common denominator of these services? That is the problem they solve, traditional software companies are not only unable to solve, not even start to understand. Before the traditional software companies came back, the startups had grabbed a lot of market share and started to push into the hinterland of corporate apps.

These new methods and disruptive marketing strategies have enabled emerging enterprise software companies to expand at an extremely rapid pace that has only been seen in the area of consumer technology before. 20 years ago, the last wave of computing was the dominant position of SAP, Microsoft and Oracle today. Today, we will also see many emerging companies emerge as top software vendors. At the same time, the overall information technology landscape will change.

(Responsible editor: Songtao)