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.
2.
3.
4.
5.
Background & goal of the study
Propositional framework & concepts
Methodology
Propositional analysis
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
PR 1
Features of
PR 2
a disruptive
PR 3
technology
Disruptiveness
potential of a
new
technology
PR 6
PR 4
PR 5
Strategic
importance
of a new
technology
Changes
in business model
-Customer benefits
-Core strategy
-Resources
-Value network
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)
INVESTIGATED CASE TECHNOLOGIES:
GRID COMPUTING:
dynamic,virtual resource allocation
EXPERTISE IN TECHNOLOGY AND ECONOMICS
(storage, calculations)
Computing power:
product  service
WLAN:
wireless access in public
spaces ~100 m
Low-cost network
access, 3 G?
Vs. centralized clientserver models
MOBILE P2P PARADIGM:
decentralized operating
model
Low-cost cable
replacement, hot spot
services
BLUETOOTH:
Personal Area Networking
~10 m
www.lut.fi
Wired
connection
Wireless, ad hoc
connection
Technology Bluetooth
/National operator
Proposition
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 applicationspecific
Confirmed.
- Mobility, flexibility
- Added value
especially strong in
mobile devices
- No behavioural
changes, except in
recognizing security
risks
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?
3: If the technology
enables or drives
changes in productmarket 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.
- Same functions with a
different operating
mode
- Intelligence to shared
servers
- Increases performance
criteria
- Knowledge needed to
gain trust
Not confirmed.
- Technological
uncertainty not high
(esp. company-internal
systems, clear benefits)
- Market uncertainty
high: Consumer market
more uncertain
Confirmed.
- Fit with current
mission
- As demand for data
security grows, creates
more business
- Risk: commoditization
of security solutions? 
moving to niche
markets
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
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)
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 knowhow and their
integration)
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 codependence, role of
Bluetooth minor
- Role of device
manufacturers
Not confirmed.
- Logical continuation
of current competences
(technical know-how &
data security)
- Risk: used to highly
reliable systems 
attitude limitation?
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 (?)
Technology
Proposition
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