The innovator's dilemma applied to software

Edited by the Engineeringtalk editorial team Feb 3, 2006

A new study of business markets for engineering software is based on the theories of Harvard Business School Professor Clayton Christensen.

Cyon Research has released results from its recent study of business markets for engineering software, based on the theories of Harvard Business School Professor Clayton Christensen.

The white paper, titled "The innovator's dilemma in the context of CAx and PLM vendors: the case for an engineering software components market", examines how current innovations in software architecture affect the competitive landscape.

The study explores the application of concepts in Christensen's "The innovators dilemma" (1997) and "The innovator's solution" (2004, with Michael Raynor) to the engineering software market.

Cyon Research applied Christensen's theory to a competitive issue facing engineering software vendors: the decision to build applications based on commercially available modular software components versus building more-interdependent systems in-house.

The white paper is a summary of its findings, based on numerous interviews and discussions with industry leaders from both user and vendor firms, as well as with Christensen's research team.

Christensen's first book: "The innovator's dilemma: when new technologies cause great firms to fail", resonated with the software community with its startling analysis of computer-user buying behaviour and the market dynamics of innovation.

The book pointed out that technologies that work better or faster do not always gain a competitive edge for their vendors, and explained the dynamics of this counter-intuitive phenomenon.

In 2003, he and Michael Raynor followed up with practical advice in "The innovator's solution: creating and sustaining successful growth".

"I've discussed Christensen's theory with senior executives at dozens of software companies over the past 18 months and it is clear that his theory has had a significant impact on their thinking", said Brad Holtz, President and CEO of Cyon Research.

"What they were uncertain of was the applicability of the theory to the business of software and to the design side of manufacturing and construction".

"This paper removes that uncertainty and discusses some of the implications of the theory's applicability to the software business".

"The conclusions and market trends that Cyon Research has derived from its insightful analysis are precisely aligned with UGS open business model and serve to validate our strategy of supplying world-class software components to the PLM and CAx industry", said Chris Kelley, Vice President of Partners and Platforms, UGS Corp.

"After several years of providing customers including nearly all of our competitors with a variety of open, modular components, our experience bears out the findings of Cyon Research that by leveraging proven component technology, software developers can more efficiently and effectively add value to their applications by focusing on their core expertise rather than reinventing the wheel".