Wednesday, February 08, 2006

When the Disruptor Breaks the Ceiling

The following entry was submitted by InnoBlog reader, Juan Pablo Vazquez Sampere. He is the Managing Director of Stratemic in Spain. He had the following to say about Openoffice and it's impact on Microsoft:


Openoffice.org has gone portable. The open-source office productivity suite has just introduced a sustaining innovation to build on its existing disruptive innovation path and to separate this product from the rest of the software-gadget-like products.

They have introduced a new simplified version of its office software that runs from a USB drive. This innovation allows non-consumers to use the Openoffice.org suite on computers not connected to the internet or that don’t have Openoffice.org installed.

But, why do I say non consumers when a user that wants to use the Openoffice.org software has it already installed in his personal computer? Because, according to the “jobs-to-be-done” theory (see The Innovator’s Dilemma Chapter 3) until now, the consumer was unable to use the software in all circumstances. In addition, this innovation is not like the previous sustaining innovations the open-source community has included in Openoffice.org. It is built upon the convenience differentiation factor allowing Openoffice.org to disrupt Microsoft Office inside its value network for the first time.

Before, Microsoft Office was the only office productivity suite that worked on any computer no matter whether or not it was connected to the internet. Now Openoffice.org can offer consumers this disruptive product in the same circumstances as Microsoft.

What are the possible reactions from Microsoft to this disruptive competitor? The value network has now been broken. Microsoft should make sure the sustaining innovation with on-demand Microsoft Office Live builds on improvements that not only will be valued by more demanding (and hence higher margin) consumers but will also be valued by lower-end consumers. If these two types of consumers are not seriously addressed in Microsoft’s strategy, they could find themselves serving only the very sophisticated upper end tier of consumers with the corresponding market shrinkage and loss of first-mover advantage.

Will Microsoft Office Live up to the challenge? Are infrastructural innovations capable of acting as a platform to introduce a sustaining innovation that will capture the next higher margin consumer and, at the same time, neutralize the disruptive competitor? Will Microsoft’s rigidities prevent them from reacting appropriately with Office Live?

Only time will tell …

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