wawc workshop 4.8.2005 how to evaluate the disruptiveness potential of new wireless technologies –...
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TRANSCRIPT
WAWC Workshop 4.8.2005
How to evaluate the disruptiveness potential of
new wireless technologies –
perspectives of ICT industry players
Liisa-Maija Sainio, Senior Lecturer
Themes of the presentation
1. Background & goal of the study
2. Propositional framework & concepts
3. Methodology
4. Propositional analysis
5. Conclusions
Background
- Doctoral dissertation project; 4 cases:
1) Bluetooth – national operator
2) WLAN – local operator A
3) Grid computing – software company
4) Mobile Peer-to-peer paradigm – comparison between device manufacturer and local operator B
Goal of the study
- How do firms interpret potentially disruptive technologies or operating models in their own strategic context
- Themes of the framework:
PR 1) Product characteristics and added value
PR 2) Technology and market uncertainty
PR 3) Changes in product-market positions
PR 4) Competence destruction
PR 5) Changes in value network positions
Amount of radical changes in business model?
Propositional framework
Disruptivenesspotential of anew technology
Strategicimportanceof a new technology
Changesin business model-Customer benefits-Core strategy-Resources-Value network
Features of
a disruptive
technology
PR 1
PR 2
PR 3
PR 4
PR 5
PR 6
Disruptivenesspotential of anew technology
Strategicimportanceof a new technology
Changesin business model-Customer benefits-Core strategy-Resources-Value network
Features of
a disruptive
technology
PR 1
PR 2
PR 3
PR 4
PR 5
PR 6
Concepts
Disruptive technology: (vs. technical operating model)
- Different value proposition
- Rapid improvements in performance; ultimately meets the needs of mainstream markets
- Destroys the competences of existing industry players
Business model: Unique combination of activities, resources and strategies with which the company delivers value to customers and captures profit from the market.
Methodology
- Combination of technology forecasting and strategic analysis
- Firm-level qualitative analysis and cross-case analysis (how did the framework function?)
- group discussions with ICT industry experts- Why group discussions?
- Efficient way of gathering rich data- Quick feedback (evaluation & control)
EXPERTISE IN TECHNOLOGY AND ECONOMICS
www.lut.fi
Wiredconnection
Wireless, ad hocconnection
GRID COMPUTING: dynamic,virtual resource allocation
(storage, calculations)
BLUETOOTH:Personal Area Networking
~10 m
WLAN:wireless access in public
spaces ~100 m
MOBILE P2P PARADIGM:decentralized operating
model
Computing power:product service
Low-cost networkaccess, 3 G?
Low-cost cable replacement, hot spotservices
Vs. centralized client-server models
INVESTIGATED CASE TECHNOLOGIES:
Technology Proposition
Bluetooth /National operator
WLAN / Local operator A
Grid computing / Software company
Peer-to-peer paradigm /device manufacturer
Peer-to-peer paradigm / Local operator B
1: If the technology enables changes in product characteristics and added value, it is potentially disruptive.
Confirmed. - Convenience - Changes application-specific
Confirmed. - Mobility, flexibility - Added value especially strong in mobile devices - No behavioural changes, except in recognizing security risks
Confirmed. - Same functions with a different operating mode - Intelligence to shared servers - Increases performance criteria - Knowledge needed to gain trust
Confirmed. - Interesting new features (e.g., gaming), but difficult to determine their significance in markets
Partly confirmed. - Low-cost/free services for different types of communities - Competitive advantage not always clear compared with centralized approach
2: If the amount of uncertainty relating to markets and technology is high, the technology is potentially disruptive.
Confirmed. (excl. cable replacement where there is low uncertainty) - Service application market more uncertain
Confirmed. - Unreliability, natural disturbances, problems with security - wireless networks vs. 3G?
Not confirmed. - Technological uncertainty not high (esp. company-internal systems, clear benefits) - Market uncertainty high: Consumer market more uncertain
Not confirmed. - Technological uncertainty low: already established technologies, but lack of standardized approach and problems with security - Market uncertainty high: how to provide expected low-cost services, fragmentation of P2P solutions
3: If the technology enables or drives changes in product-market positions, it is potentially disruptive and of strategic importance to the firm.
Partly confirmed. - Better usability of existing applications - Effect on mission complementary - Customer trust a benefit in service market
Not confirmed. - Strong link to mission, but complementary, “something extra” - Needs the support of cable network
Confirmed. - Fit with current mission - As demand for data security grows, creates more business - Risk: commoditization of security solutions? moving to niche markets
Partly confirmed. - No effect on mission - Certain changes in product concept, scale? - Smartphones with p2p gaming as a market test
Confirmed. - Certain threat to mission; some cannibalization of SMS market, problems with service quality - Hard to create profitable service concepts (local usage, low volumes)
Technology Proposition
Bluetooth /National operator
WLAN / Local operator A
Grid computing / Software company
Peer-to-peer paradigm /device manufacturer
Peer-to-peer paradigm / Local operator B
4: If the technology is competence destroying, it is potentially disruptive and of strategic importance to the firm.
Not confirmed. - Logical continuation of current competences (service management, technological know-how and their integration)
Not confirmed. - Logical continuation of current competences (technical know-how & data security) - Risk: used to highly reliable systems attitude limitation?
Not confirmed. - Enhancement of current competences (distributed systems, CRM, wireless PKI)
Not confirmed. - No signs of competence disruption (competences: user interface, design, branding)
Partly confirmed. - Strong competence in voice & data traffic in different networks - If p2p reflects paradigm change, then disruption might occur
5: If the technology drives or enables changes in the positions of players in the value network, it is of strategic importance to the firm.
Not confirmed. - General development of mutual co-dependence, role of Bluetooth minor - Role of device manufacturers
Partly confirmed. - Electricity companies as potential new players. - WLAN to mobile phones what will happen?
Confirmed. - May increase dependency (more actors & partners) - Fragmentation of activities? - Role of operator controversial
Partly confirmed. - Changes in operators’ positions expected
Confirmed. - Growing role & bargaining power of customers! - Changes in device manufacturer’s role (?)
Different dimensions of disruptiveness:
• Improvements in performance criteria (Bluetooth)• Not taken seriously in its initial stages (”WLAN is
a bit of joke technology”)• May change pricing structures (P2P)• May change the product concept and distribution
model (Grid computing)• New functions to existing applications
Conclusions
- Results not generalizable!- The value in the process itself; providing a holistic
perspective on a new technology- Cross-case analysis result: Proposition 4 possibly not
reliable! - Contradiction between changes in product characteristics
and uncertainty vs. strategic response! Knowledge structures enforce the belief in current
competences Sign of vulnerability in the face of potentially disruptive
technologies