Microsoft SaaS Disruptive Technology Research Matt Deacon, Microsoft Dr Steven Moxey, Manchester Business School March, 2007 INSIGHT Conference Celtic.

Microsoft SaaS Disruptive Technology Research

Matt Deacon, Microsoft

Dr Steven Moxey, Manchester Business School

March, 2007

INSIGHT Conference

Celtic Manor, UK

To provide input and definition on the potential of SaaS as a disruptive technology

WAX Workshop

20/05/06

Tim O-Reilly What

is Web 2.0?

30/09/05

Ray Ozzie & The

Internet Services

Disruption Memo

28/10/05

SaaS DT Workshops

11/06

Web as a platformCollective IntelligenceData is Next Intel InsideEnd of Software Release CycleLightweight programming modelsSoftware above the level of a single deviceRich User Experience

To examine the intersection of existing and emerging architectures including SOA, SaaS, Web 2.0 and associated technologies.

Three Tenets:The power of the advertising-supported economic model.The effectiveness of a new delivery and adoption model.The demand for compelling, integrated user experiences that “just work”.

Manchester Business School Meeting

13/07/06

Project Background

Research Questions

1. How prevalent are Disruptive Technology Innovations for SaaS?

2. What are the indicators of Disruptive Technology?• Pre-disruption?

• Post-disruption?

3. How can one estimate/measure the impact of Disruptive Technologies?

Manchester University

• Largest University in the UK (Merger in 2005 between

Manchester University and UMIST)

• Turnover £514m 2003/4, more than Oxford or Cambridge

• 35,000+ students, 180,000 alumni in 192 countries

• Strategic plan to be one of the top 25 universities globally by

2015

• Manchester Business School is the largest business school in

Europe, RA 5*, FT rankings:

• PhD programme rated #1 in Europe, #2 in World

• Financial Times #5 in World on International business

Seagate case study

Definitions

Definition (Part 1)

Disruptive technologies introduce a very different package of attributes from the mainstream technology that is currently valued.

Furthermore, and most importantly, the new technology performs particularly badly on one or two dimensions that are currently particularly important to current customers.

Disruptive Technologies

Definition (Part 2)

In addition, to be destructive, the new technology makes rapid strides on the key dimensions, those on which it massively under-performed initially, to the extent that it becomes competitive even on these dimensions.

It thus has the potential to be destructive to the existing technology…

Disruptive Technologies

Perf

orm

an

ce

i.e.

Cap

acit

yi.

e.

Cost

per

un

it

Offered byEstablishedTechnology

Offered byDisruptiveTechnology

Demandedby Users

Disruptive Technology Improves to cut the Demanded Performance Curve

Time

Step ITechnology Introduced

Performs PoorlyCustomers say NO!

Step ITechnology Introduced

Performs PoorlyCustomers say NO!

Step IIEstablished IGNORE

New Entrants Develop

Step IIEstablished IGNORE

New Entrants Develop

Step IIITechnology Performs POORLY

New EntrantsBuild New Markets

Step IIITechnology Performs POORLY

New EntrantsBuild New Markets

Step IVOverdrive!

Performance IMPROVESEnters Original Markets

Step IVOverdrive!

Performance IMPROVESEnters Original Markets

Disruptive Technology Stages

SaaS: A Definition

Saas: Definition

• Software as a Service is …

“A remotely hosted and managed internet-based software service that is charged for on a subscription basis.”

What are the key attributes of a traditional

software product

What are the key attributes of a traditional

software product

Existing Customer

s

Existing Customer

s

Product(ISV)

Product(ISV)

SaaSProduct

(ISV)

SaaSProduct

(ISV)

New MarketNew

Market

B.B.A.A.

D.D.C.C.

11

22

5533

44

What are the key needs from an

existing customer perspective?

What are the key needs from an

existing customer perspective?

What are the key attributes of a SaaS

product

What are the key attributes of a SaaS

product

What are the key needs from a new market customer

perspective

What are the key needs from a new market customer

perspective

SaaS Disruptive Technology Framework

Key attributes of a traditional CRM product

• Market share

• In house retention of data

• Integration with other systems

• Customisation to requirements

• Scalability of system

• Offline capability (smart client)

Key needs from an existing customer perspective• Resilience and scalability, Availability, response time,

• DR

• Business continuity

• International deployment

• International Support

• Brand: “Reassuringly expensive”

• Unique information on business

• Industry coverage/process

• Integration with other LOB Apps

• Fits to ‘my’ process – unique business process

• Data ownership

Key attributes of the Salesforce.com product

• Reduced barrier to entry (cost)

• Scalability of cost “pay as you grow”• Lower TCO

• Consistent & predictable

• Access anywhere

• Speed

• Automatic upgrade

• Customisation limited but easy

• Mash-ups/interface/integration*

• Business continuity

Key needs from a new market customer perspective• SMEs

• Low predictable costs

• No IT

• Scale with/as business scales

• ?

• Training

• Integration out of the box

• Community/ecosystem• Supported by the provider

• Alliances/ sharing of data/ federation of data

• Federated ID

• No consultants

• Run everywhere/anywhere

Votes?

• Do you think sf.com have a disruptive technology?

• Do you think sf.com will develop new markets for their products?

• Do you think SaaS provides a platform for disruptive innovation?

• Do you think your business will create disruption?

• Do you think your business will be disrupted?

Votes?

1. Do you think sf.com have a disruptive technology?

2. Do you think sf.com will develop new markets for their products?

3. Do you think SaaS provides a platform for disruptive innovation?

4. Do you think your business will create disruption?

5. Do you think your business will be disrupted?

Disruptive Technology Conclusions

Next Steps

• Manchester Business School is designing the SaaS Disruptive Technology survey, based on feedback from four ISV/Architect workshops, including SAF and INSIGHT

• Participants from the workshops will be invited to participate in the SaaS Disruptive Technology survey in March-April and will received early feedback on the results in May

• Microsoft and Manchester Business School are considering the options for single company Disruptive Technology Workshops to help early adopters establish Disruptive Innovation plans

• Any further ideas or requirements are very welcome! Please contact Matt Deacon (Microsoft) or Dr Steve Moxey (Manchester Business School)

Microsoft SaaS Disruptive Technology Research

Matt Deacon, Microsoft

[email protected]

Dr Steven Moxey, Manchester Business School

[email protected]

March, 2007

INSIGHT Conference

Celtic Manor, UK

In contrast!Are technologies that sustain the current mix of performance attributes. They can be incremental, but can also be entirely new radical, technologies.

The point is that they provide more of the attributes currently offered and demanded by the existing marketplace…

Sustaining Technologies

SaaS ISV Innovation Model

SaaS

SaaS

ISVISV

ISVISV

1. New MarketDisruptive Innovation

1. New MarketDisruptive Innovation

2. Current MarketRadical/

Incremental Innovation

2. Current MarketRadical/

Incremental Innovation

ISVISV

SaaS creates anInnovation

OpportunityFor Customers &

ISVs

SaaS creates anInnovation

OpportunityFor Customers &

ISVs

Companies can respond by creating

products/services for(1) Disruptive Innovation (2) Radical/Incremental

Companies can respond by creating

products/services for(1) Disruptive Innovation (2) Radical/Incremental

Disruptive Innovation is harder since the Companies know much less about the New Market.BOTH Disruptive and Radical, Incremental Innovation gives a “balanced portfolio” and better strategic growth