A lesson, The Innovator's Dilemma

Microsoft has just announced a partnership with 6 server vendors to roll out "private-cloud" offerings. "Private-cloud" is a new marketing term given on-premise technologies in order to take advantage of an industry trend towards Cloud Computing.

The "private-cloud" allows vendors to maintain the status quo. How does a customer obtain a "private-cloud"? It's very easy and it fits perfectly with their current vendor list and upgrade cycles - all the customer has to do is invest more capital in new software, hardware and professional services.

Harvard Professor Clayton Christensen wrote a great text in 1997 called the Innovator's Dilemma.

The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials)

Clayton was trying to capture the nature of disruptive innovation and the challenges they present to incumbent vendors. A disruptive innovation is essentially a product, service, or business model that disrupts the status quo and therefore the market built on those assumptions. Classic examples include the transistor replacing the vacuum tube; the mobile phone replacing land lines; and the client/server architecture replacing mainframes/minicomputers. There are thousands of examples of disruptive innovations across every industry.

By definition disruptive innovations change their specific market. However, sometimes they change an entire planet. Electricity falls into this category as does the combustion engine and aviation. These innovations fall into an important category known as General Purpose Technologies. In short, they change everything for everyone.

The most recent General Purpose Technology is the Internet. The Internet is more than pictures of funny cats, personal email, and Facebook. It is a network of networks that connects billions of people in a system of information and services. Visualizing parts of these networks is reminiscent of the neural connections of the human brain and the universe itself.  For everything we do on the Internet today, it is still in its infancy and will continue to change our lives.

For more than a decade there have been companies who have operated under the assumption that as a culture we will leverage the Internet for our technology services both personally and professionally. We've all heard of these firms: Amazon, eBay, Facebook, Salesforce.com, Google and many more. These firms created purpose built multi-tenant architectures and business models for our Internet-enabled world.

What does the disruptive innovation of the Internet have to do with "private-cloud"? Absolutely nothing and that's really the point. Microsoft's profits, products, and business model have nothing to do with the Internet and that's their dilemma.