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James M. Utterback. Willey, Richard Ellert, 1966- Massachusetts Institute of Technology. Management of Technology Program. Management of Technology Program. Sloan School of Management 2005-05-19T15:33:50Z 2005-05-19T15:33:50Z 2003 2003 http://hdl.handle.net/1721.1/16990 54032850 Thesis (S.M.M.O.T.)--Massachusetts Institute of Technology, Sloan School of Management, Management of Technology Program, 2003. Includes bibliographical references (leaves 44-45). This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. The expression "disruptive technology" is now firmly embedded in the modern business lexicon. The mental model summarized by this concise phrase has great explanatory power for ex-post analysis of many revolutionary changes in business. Unfortunately, this paradigm can rarely be applied prescriptively. The classic formulation of a "disruptive technology" sheds little light on potential sources of innovation. This thesis seeks to extend this analysis by suggesting that many important disruptive technologies arise from commodities. The sudden availability of a high performance factor input at a low price often enables innovation in adjacent market segments. The thesis suggests main five reasons that commodities spur innovation: ** The emergence of a commodity collapses competition to the single dimension of price. Sudden changes in factor prices create new opportunities for supply driven innovation. Low prices enable innovators to substitute quantity for quality. ** The price / performance curve of a commodity creates an attractor that promotes demand aggregation. ** Commodities emerge after the establishment of a dominant design. Commodities have defined and stable interfaces. Well developed tool sets and experienced developer communities are available to work with commodities, decreasing the price of experimentation. ** Distributed architectures based on large number of simple, redundant components offer more predictable performance. Systems based on a small number of high performance components will have a higher standard deviation for uptime than high granularity systems based on large numbers of low power components. ** Distributed architectures are much more flexible than low granularity systems. Large integrated facilities often provide cost advantages when operating at the Minimum Efficient Scale of production. However, distributed architectures that can efficiently change production levels over time may be a superior solution based on the ability to adapt to changing market demand patterns. The evolution of third generation bus architectures in personal computers provides a comprehensive example of commodity based disruption, incorporating all five forces. by Richard Ellert Willey. S.M.M.O.T. 45 leaves 233826 bytes 233585 bytes application/pdf application/pdf eng Massachusetts Institute of Technology M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission. http://dspace.mit.edu/handle/1721.1/7582 Management of Technology Program. Many is beautiful : commoditization as a source of disruptive innovation Thesis application/pdf false Publication unknown unknown <Publication xmlns="https://www.openaire.eu/cerif-profile/1.1/" id="076258fd-49bd-47df-a248-856f614760a6"> <Type xmlns="https://www.openaire.eu/cerif-profile/vocab/COAR_Publication_Types">http://purl.org/coar/resource_type/c_1843</Type> <Language>eng</Language> <Title>Many is beautiful : commoditization as a source of disruptive innovation</Title> <PublishedIn> <Publication> </Publication> </PublishedIn> <PublicationDate>2003</PublicationDate> <Authors> <Author> <DisplayName>Willey, Richard Ellert, 1966-</DisplayName> <Affiliation> <OrgUnit> </OrgUnit> </Affiliation> </Author> </Authors> <Editors> </Editors> <Publishers> <Publisher> <DisplayName>Massachusetts Institute of Technology</DisplayName> <OrgUnit /> </Publisher> </Publishers> <License>http://dspace.mit.edu/handle/1721.1/7582</License> <Keyword>Management of Technology Program.</Keyword> <Abstract>The expression "disruptive technology" is now firmly embedded in the modern business lexicon. The mental model summarized by this concise phrase has great explanatory power for ex-post analysis of many revolutionary changes in business. Unfortunately, this paradigm can rarely be applied prescriptively. The classic formulation of a "disruptive technology" sheds little light on potential sources of innovation. This thesis seeks to extend this analysis by suggesting that many important disruptive technologies arise from commodities. The sudden availability of a high performance factor input at a low price often enables innovation in adjacent market segments. The thesis suggests main five reasons that commodities spur innovation: ** The emergence of a commodity collapses competition to the single dimension of price. Sudden changes in factor prices create new opportunities for supply driven innovation. Low prices enable innovators to substitute quantity for quality. ** The price / performance curve of a commodity creates an attractor that promotes demand aggregation. ** Commodities emerge after the establishment of a dominant design. Commodities have defined and stable interfaces. Well developed tool sets and experienced developer communities are available to work with commodities, decreasing the price of experimentation. ** Distributed architectures based on large number of simple, redundant components offer more predictable performance. Systems based on a small number of high performance components will have a higher standard deviation for uptime than high granularity systems based on large numbers of low power components. ** Distributed architectures are much more flexible than low granularity systems. Large integrated facilities often provide cost advantages when operating at the Minimum Efficient Scale of production. However, distributed architectures that can efficiently change production levels over time may be a superior solution based on the ability to adapt to changing market demand patterns. The evolution of third generation bus architectures in personal computers provides a comprehensive example of commodity based disruption, incorporating all five forces.</Abstract> <Access xmlns="http://purl.org/coar/access_right" > </Access> </Publication>