The best book to read to understand the impact of Disruptive Technologies is “The Innovator’s Dilemma” by Clay Christensen. Here, we will capture the key essentials of what these technologies do and how they create dilemmas for companies
In the picture above, the dotted red line is the performance trajectory which the marketplace expects and can use. In computers, for example, our hard disks get bigger, the memory increases, but there is only so much we can do with them for applications like MS-Office.
The green and blue lines represent the performance trajectories from sustaining and disruptive technologies. In the words of Clay Christensen:
The trajectory of technological progress in every market tends to outstrip the ability of customers to utilize it. So it means that a company whose product or service is squarely positioned on what customers in the mainstream are using at one point is prone to overshoot the degree of performance or functionality that those very same mainstream customers are able to utilize at another point in time.The trajectory of technological process almost always outstrips the ability of the customers to utilize it, and it creates this instability of overshooting what customers can use.
The sustaining technologies are on the blue line. Some technologies that sustain this trajectory of technological process are the sort of incremental engineering advances that all good companies are able to grind out.
Then, if you look at that downward arrow, a disruptive technology is something that brings to the market a product or service that is not as good as what historically had been available, and therefore it can’t be valued or used by customers in the mainstream of the market. Yet it takes root in a different application. It isn’t as demanding, but then these trajectories slope upward faster (the green line) and intersect with the customers needs and the mainstream.