Exploring the Limits of the Technology S-Curves

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Exploring the Limits of the Technology S-Curves
Component Technologies

• Clayton Christensen

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

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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

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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

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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

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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

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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.

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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

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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

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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

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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.