Have you ever wondered why innovation in the technology sector seems to be never-ending? How do companies like Microsoft, Apple, and Google manage to consistently come up with newer and more innovative versions of their products and services each year? Well, a big part of it is due to Moore’s Law, which states that “The number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every two years”. This means that the capabilities of many digital electronic devices like processing speed, memory capacity, and storage will continue to improve at exponential rates, and this trend will consistently open up new oases of opportunity with respect to the features and functionality of technology products.
I recently read a high-tech marketing book titled ‘Inside the Tornado‘ by Geoffrey Moore; highly recommended for anyone interested in marketing technology products. A key takeaway from that book for me is an understanding of the concept of Tornadoes. A tornado is created when the demand for a technology product far outstrips supply. This usually occurs when the product wins massive consumer adoption, or adoption by pragmatic buyers like the corporate IT departments of large corporations. The IT industry has witnessed a number of tornadoes in the past. Some include:
- The Distributed Computing Tornado which led to the rise of technology giants Intel and Microsoft.
- The Desktop Printing Tornado which led to the rapid growth of HP’s Printing and Imaging Services Business.
- The Relational Database Management System (RDBMS) tornado which led to the golden age of Oracle.
Tornadoes are inherently disruptive in nature. They replace existing technologies in a discontinuous process, creating enormous wealth for the new technology vendors, and making old vendors irrelevant in the marketplace.
What is the role of IT in tornadoes? Well, organizations find the inherent opportunities and threats of tornadoes very disturbing. They don’t want to be left behind in terms of the competitive advantage to be gained from the new technology. However, they also don’t want to adopt an immature technology that provides more issues than value. It is therefore the job of IT to help their organizations out in two important ways:
- Performing cost benefit analyses to determine the optimum time period for adopting the disruptive technology
- Implementing the new technology in a manner that would provide the most benefit, in terms of competitive advantage, with the least cost in terms of disruption to existing business operations and systems.