Exploring the Limits of the Technology S-Curves – Component Technologies Clayton Christensen

Technology S-Curve Maturity Growth Time or Engineering Effort Product Performance Emergence Time or Engineering Effort

Technology S-Curve It has become a way of thinking about technological improvement over a period of time Theory Early stages improvement in performance is slow As the technology is understood and diffused, rate of improvement increases

Technology S _Curves S-Curve - used at the industry level Incumbent firms are concerned about refining existing technologies They lose their positions of dominance to new entrants

Typologies of technological change Architectural change Rearrangement in the way components are relate to each other Using the motors and fan blades coming up with a table fan Modular change Fundamental change in the technological approach employed in a component where the architecture is left unchanged Changing the type of motor in a ceiling fan

Typologies of technological Change (Contd) Incremental change Improvements in component performance Better quality RAMs, memory chips Radical innovation Change in architecture and new approach in the component level

Using the technology S-Curve at the firm level Why is harder to get performance improvement as a technology reaches maturity? Scale phenomenon (things get too large or too small) System complexity

The Disk Drive industry What is the performance measure for incumbents? Areal recording density When resources spent in engineering improve the performance of a technology, there is less of an incentive to switch to alternate technologies.

Component and Architectural technologies Disk Drive System Component Technology Read write technology on the disk drive Ferrite and Oxide Technologies Vs. Thin Film Heads Incumbents prefer to work on existing technologies and make incremental changes that bring performance improvements Resource Rich companies invest in radical component improvements Thin film heads cost IBM over $1 billion and took over 10 years Architectural technology Cost significantly less and can be developed in lesser time

Timing of adoption Thin film technology replaced the Ferrite heads The time at which different firms switched to the new component technology varied over a 10 year period The extent of performance improvement was also different IBM was one of the early movers (1978) Hitachi and Fujitsu switched much later in the mid 1980s Switching to a new technology did not improve the performance

Timing of adoption (Contd) No relationship between timing of adoption and performance improvement Early adopters no clear improvement in storage capacity Later adopters able to work with the technology and improve performance Companies had different strategies in the way they adopted component technologies Some companies like IBM choose to switch to new technologies HP preferred to improve existing technologies

Incumbents vs. New Entrants and S-Curves Incumbents are more likely to succeed wrt changes to component technologies New Entrants seldom succeed with Component technologies The story is different with architectural technologies Component technologies reinforce existing competencies Architectural technologies look at competencies with a different lens.