Monday, July 23, 2012

Architecting Disruptive Technology Platforms

Bob Metcalfe, the founder of 3Com and co-inventor of  Ethernet has said:
"Be prepared to learn how the growth of exponential and disruptive technologies will impact your industry, your company, your career and your life."
The term disruptive technology has been widely used as a synonym of disruptive innovation, but the latter is now preferred, because market disruption has been found to be a function usually not of technology itself but rather of its changing application.Wikepedia defines a disruptive innovation (first coined by Clayton Christensen) as:
"An innovation that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network (over a few years or decades), displacing an earlier technology".
Examples of disruptive innovations (and what they have disrupted/displaced) are:
  • Digital media (CDs/DVDs)
  • Desktop publishing (traditional publishing)
  • Digital photography (chemical/film photography)
  • LCD televisions (CRT televisions)
  • Wikipedia (traditional encyclopedias)
  • Tablet computers (personal computers, maybe)
The above are all examples of technologies/innovations that have disrupted existing business models, or even whole industries. However there is another class or type of disruptive innovation which not only disrupts a market but creates a whole new ecosystem upon which a new industry can be created. Examples of these are the likes of Facebook, Twitter and iTunes. What these have provided, as well, are a platform upon which providers, complementors, users and suppliers co-exist to support, nurture and grow the ecosystem of the platform and create a disruptive technology platform (DTP). Here's a system context diagram for such a platform.   

The four actors in this system context play the following roles:
  • Provider - Develops and provides the core platform. Providers need to ensure the platform exposes interfaces (that Complementors can use) and also ensure standards are defined that allow the platform to grow in a controlled way.
  • Complementor - Supplement the platform with new features, services and products that increase the value of the platform to End Users (and draw mor of them in to use the platform).
  • End User - As well as performing the obvious 'using the platform' role Users will also drive demand that  Complementors help fulfill. Also there are likely to be more Users if there are more Complementors providing new features. A well architected platform also allows End Users to interact with each other.
  • Supplier - Usually enters into a contract with the core platform provider to provide a known product or service or technology. Probably not innovating in the same way as the complementor would.
If we use Facebook (the platform) as a real instance of the above then the provider is Facebook (the company) who have created a platform that is extensible through a well defined set of interfaces. Complementors are the many third party providers who have developed new features to extend the underlying platform (e.g. Airbnb and The Guardian). End uers are, of course, the 800 million or so people who have Facebook accounts. Suppliers would be the companies who, for example, provide the hardware and software infrastructure upon which Facebook runs.

Of course, just because you are providing a new technology platform does not mean it will automatically be a disruptive technology platform. Looking at some of the technology platforms that are currently out there and have, or are in the process of disrupting businesses or whole industries we can see some common themes however. Here are some of these (in no particular order of priority):
  • A DTP has a well defined set of open interfaces which complementors can use, possibly in ways not originally envisaged by the platform provider.
  • The DTP needs to build up a critical mass of both end users and complementors, each of which feeds off the other in a positive feedback loop so the platform grows. 
  • The DTP must be both scaleable but extremely robust.
  • The DTP must provide an intrinsic value which cannot be obtained elsewhere, or if it can, must give additional benefits which make users come to the DTP rather than go elsewhere. Providing music on iTunes at a low enough cost and easy enough to obtain preventing users going to free file sharing sites is an example.  
  • End users must be allowed to interact amongst themselves, again in ways that may not have been originally envisaged.
  • Complementors must be provided with the right level of contract that allows them to innovate, but without actually breaking the platform (Apple's contract to App store developers is an example). The DTP provider needs to retain some level of control.
These are just some of the attributes I would expect a DTP to have, there must be more. Feel free to comment and provide some observations on what you think constitutes a DTP.