A disruptive technology is one that displaces an established technology and shakes up the industry or a ground-breaking product that creates a completely new industry.
Harvard Business School professor Clayton M. Christensen coined the term disruptive technology. In his 1997 best-selling book, "The Innovator's Dilemma," Christensen separates new technology into two categories: sustaining and disruptive. Sustaining technology relies on incremental improvements to an already established technology. Disruptive technology lacks refinement, often has performance problems because it is new, appeals to a limited audience and may not yet have a proven practical application. (Such was the case with Alexander Graham Bell's "electrical speech machine," which we now call the telephone.)
Here are a few examples of disruptive technologies:
- The personal computer (PC) displaced the typewriter and forever changed the way we work and communicate.
- The Windows operating system's combination of affordability and a user-friendly interface was instrumental in the rapid development of the personal computing industry in the 1990s. Personal computing disrupted the television industry, as well as a great number of other activities.
- Email transformed the way we communicating, largely displacing letter-writing and disrupting the postal and greeting card industries.
- cell phones made it possible for people to call us anywhere and disrupted the telecom industry.
- The laptop computer and mobile computing made a mobile workforce possible and made it possible for people to connect to corporate networks and collaborate from anywhere. In many organizations, laptops replaced desktops.
- Smartphones largely replaced cell phones and PDAs and, because of the available apps, also disrupted: pocket cameras, MP3 players, calculators and GPS devices, among many other possibilities. For some mobile users, smartphones often replace laptops. Others prefer a tablet.
- Cloud computing has been a hugely disruptive technology in the business world, displacing many resources that would conventionally have been located in-house or provided as a traditionally hosted service.
- Social networking has had a major impact on the way we communicate and -- especially for personal use -- has disrupted telephone, email, instant messaging and event planning.
In his book, Christensen points out that large corporations are designed to work with sustaining technologies. They excel at knowing their market, staying close to their customers, and having a mechanism in place to develop existing technology. Conversely, they have trouble capitalizing on the potential efficiencies, cost-savings, or new marketing opportunities created by low-margin disruptive technologies. Using real-world examples to illustrate his point, Christensen demonstrates how it is not unusual for a big corporation to dismiss the value of a disruptive technology because it does not reinforce current company goals, only to be blindsided as the technology matures, gains a larger audience and market share and threatens the status quo.