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Technology Tales & Tails

Technology Tales & Tails. Stories of Techno-evolution Steve Kiely Chairman, Cray, Inc. September 21, 2010. VS. VS. VS. Does the best answer always win?. …If not, how do we pick the right horse to ride?. Technology Tails. Late life cycle. Life cycle: early phases.

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Technology Tales & Tails

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  1. Technology Tales & Tails

    Stories of Techno-evolution Steve Kiely Chairman, Cray, Inc. September 21, 2010
  2. VS. VS. VS. Does the best answer always win? …If not, how do we pick the right horse to ride?
  3. Technology Tails Late life cycle
  4. Life cycle: early phases “Innovator’s Dilemma”
  5. “Innovator’s dilemma”: Clayton Christensen Technology evolution  Disruptions! Disruptions occur at low-end price points High-priced product’s managers won’t react… They’d lose margin! They don’t feel threatened! Buyers moved by price for NEW USES If milk cost a penny per gallon, we’d water our lawns with it…. Disrupt yourself before somebody else disrupts you!
  6. Paradigm shift: low-cost replacement 1980’s: Mainframe Model 1990’s: Distributed Model DISRUPTION!
  7. Tale: IBM vs. Intel & Microsoft 1982 2000 INTEL & MICROSOFT IT PRODUCT MKT SHARE IBM IT PRODUCT MARKET SHARE IBM exited PC business in 2005 PC business dominated by Intel & Microsoft
  8. Tale of 1982: The Birth of The Industry Titans… IBM Funds Intel’s R&D for microprocessors Intel faced financial ruin from Japanese RAM dumping IBM chooses Microsoft to supply the OS for IBM PC Microsoft had no meaningful business at that time
  9. TALE: iPad vs. PC: Disruptive Technology? iPad Paradigm PC Paradigm Simpler (touch vs. type) Killer graphics Task-focused Reading Playing Lower cost Getting better Smaller Faster Cheaper More portable KB/Mouse Large Storage (HD)
  10. iPad and the Laptop, WSJ
  11. Tale: Low Cost Replacements, Round 2 Apple vs. Microsoft, Round 2 Apple’s market value (stock) now exceeds Microsoft’s (!) Apple has attacked the low-price segment iPod, iPhone, iPad enjoy significant user simplicity advantage Microsoft has four failed entries in consumer segment Zune, Windows phones don’t compete XBox: only hardware differentiation; uses software from game industry Intel vs. the world, Round 2 Intel has no answer for low cost hardware engines ARM, Snapdragon dominate smartphones, specialized devices like iPod and iPad DSP’s (Digital Signal Processors) dominate mobile devices – no Intel answer
  12. Life cycle: MID phases “Crossing the Chasm”
  13. Crossing the Chasm: Geoffrey Moore Build the whole product Your product, plus… The “Value Chain” Hardware, software, network, distribution, service, etc. … Target early adopters Users who have NO CHOICE Users that DRIVE THE BUS As volumes peak, change your approach to the market shift investment to the next big thing change marketing (e.g., coupons vs. advertising)
  14. TALE: Apple vs. Android Apple iPhone approach: Premium priced within its category Proprietary product design, even for applications Steve Jobs’ philosophy: design beauty via total control Side-effect: limited value chain (e.g., Flash Applications) Exclusive network (AT&T only) - #2 behind Verizon Google Android approach: Supply the key element = the mobile OS Let the industry provide hardware platforms & networks Result: lots of price points, hardware innovation & competition, broad network adoption 2010 Year-to-date: Android sales > iPhone sales Market prediction: Android dominates by 2014
  15. SOME IMPLICATIONS for USERS… Pioneershave arrows in their chests…. Be an early adopter when you have no other choice If you’re an early adopter, realize if it’s for the thrills… Laggardswalk a tightrope… There’s a lot to be said for the stability of maturity Laggards put themselves at a competitive disadvantage Mainstream Majorities seldom stick out in a crowd…. “Nobody get’s fired for buying IBM”… …But does your business require a technology advantage?
  16. Life cycle: Late Phases “Technology in decline?”
  17. Cost Wars: Hard Drives vs. DRAMs VS
  18. Tale: Hard Drives vs. DRAMs LESSON: Competition  technology improvements! Consumer hard drives priced below $0.01 per GB Consumer Flash RAM priced over $2.00 per GB LESSON: Competition technology differentiation! Hard drives – best capacity Flash RAM – best access times
  19. Beware the “Next Big Thing”… Blade servers Office of the future Cloud computing Client-server virtualization …Consultants don’t always get it right…
  20. Closing Thoughts… Don’t be the first to buy unless you see no choice (or you are a thrill-seeker) Don’t sell an old technology short while it’s still delivering Don’t make your organization a dinosaur by riding one Don’t forget to look for the WHOLE product Don’t forget to look for the shiny new toy at price points below the mainstream product’s

  21. Technology Tales & Tails

    Stories of Techno-evolution Steve Kiely Chairman, Cray, Inc. September 21, 2010
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