The Innovator's Dilemma, and Microsoft's
By STEVE LOHR
William H. Gates complains that everyone at Microsoft pitching a
new project seems to invoke the notion of the innovator's
dilemma. The term, Mr. Gates told Forbes magazine last year, is "a
required slide in every funding presentation."
Still, Mr. Gates might do well to pay attention, says Clayton M.
Christensen, the Harvard Business School professor who coined the
phrase. His book, "The Innovator's Dilemma: When New Technologies
Cause Great Firms to Fail," has been causing a stir at technology
companies since it was published in 1997. It describes how leading
companies are ambushed by new products.
Technology industries, he says, go through life cycles. A large, integrated
company makes sense, in his view, when a technology is young and it is a
formidable task simply to make a product or service that works. In the
days when the national telephone network was being built, Mr.
Christensen said, "a single company would have dominated, even if
AT&T were not created."
Yet as a technology matures, he noted, "it causes the industry to
disintegrate." Then, speed to market and ease of customization tend to
matter more. That is when a technology leader is most susceptible to a
disruptive technology coming up from the bottom.
Today's market for personal computer software, Mr. Christensen insists,
has the characteristics of maturity. "For Microsoft, the mainstream
product lines -- the Windows operating system and Office suite -- are
just huge software programs," he said. "Most users don't use more than
10 percent of their features.
"And Java," Mr. Christensen said, referring to the Sun Microsystems
language for Internet programming, "is coming up." Like many insurgent
technologies, he noted, Java was first developed for another market --
consumer electronics -- but it found its early use on the World Wide
Web.
His prognosis for Microsoft? "No matter what happens in the antitrust
case, Microsoft will go where I.B.M. went in mainframes," said Mr.
Christensen, whose book is being published in paperback by
HarperBusiness. "Microsoft will still be dominant in PC operating
systems but, like mainframes, that will not be the mainstream of
computing anymore.
"Microsoft," he added, "will still be around, but it will not be the
all-powerful entity it once was. This is the mechanism by which markets
destroy monopoly."
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