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

2. Project Background 30/09/05 28/10/05 20/05/06 13/07/06 11/06
Tim O-Reilly What is Web 2.0?
Ray Ozzie & The Internet Services Disruption Memo
WAX Workshop
Manchester Business School Meeting
SaaS DT Workshops
To provide input and definition
on the potential of SaaS as a disruptive technology
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”.
Web as a platform
Collective Intelligence
Data is Next Intel Inside
End of Software Release Cycle
Lightweight programming models
Software above the level of a single device
Rich User Experience 2

3. Research Questions
How prevalent are Disruptive Technology Innovations for SaaS?
What are the indicators of Disruptive Technology?
Pre-disruption?
Post-disruption?
How can one estimate/measure the impact of Disruptive Technologies?

4. 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

5. Seagate case study

6. Definitions

7. Disruptive Technologies
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.

8. 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…

9. Disruptive Technology Improves to cut the Demanded Performance Curve
Offered by
Established
Technology
Disruptive
Demanded
by Users
Performance
i.e. Cost per unit
i.e. Capacity
Time

10. Disruptive Technology Stages
Step IV
Overdrive!
Performance IMPROVES
Enters Original Markets
Step III
Technology Performs POORLY
New Entrants
Build New Markets
Step II
Established IGNORE
New Entrants Develop
Step I
Technology Introduced
Performs Poorly
Customers say NO!

11. SaaS: A Definition

12. Saas: Definition
Software as a Service is …
“A remotely hosted and managed internet-based software service that is charged for on a subscription basis.”

13. SaaS Disruptive Technology FrameworkB.
Product
(ISV) 1
Existing Customers
What are the key attributes of a traditional software product
What are the key needs from an existing customer perspective? 3 5 4 D. C.
SaaS
Product
(ISV)
New Market 2
What are the key attributes of a SaaS product
What are the key needs from a new market customer perspective

14. 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)

15. 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

16. 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

17. 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

18. 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?

19. 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?

20. Disruptive Technology Conclusions

21. 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)

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

23. Sustaining Technologies
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…

24. SaaS ISV Innovation Model
SaaS creates an
Innovation Opportunity
For Customers & ISVs
1. New Market
Disruptive Innovation
ISV
SaaS
2. Current Market
Radical/Incremental
Innovation
ISV
ISV
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
Companies can respond by creating products/services for (1) Disruptive Innovation (2) Radical/Incremental