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Supporting Student Notes:

• A disruptive technology or disruptive innovation is a technological innovation that improves a product or service in ways that the market does
not expect, typically by being lower priced or designed for a different set of consumers.

• Disruptive innovations can be broadly classified into low-end and new-market disruptive innovations. A new-market disruptive innovation is often
aimed at non-consumption (i.e., consumers who would not have used the products already on the market), whereas a lower-end disruptive
innovation is aimed at mainstream customers for whom price is more important than quality.

• The term disruptive technology was coined by Clayton M. Christensen and introduced in his 1995 article Disruptive Technologies: Catching the
Wave, which he coauthored with Joseph Bower. The article is aimed at managing executives who make the funding/purchasing decisions in
companies rather than the research community. He describes the term further in his 1997 book The Innovator's Dilemma. In his sequel, The
Innovator's Solution, Christensen replaced disruptive technology with the term disruptive Innovation because he recognized that few technologies
are intrinsically disruptive or sustaining in character. It is the strategy or business model that the technology enables that creates the disruptive
impact. The concept of disruptive technology continues a long tradition of the identification of radical technical change in the study of innovation by
economists, and the development of tools for its management at a firm or policy level.

• The trend of moving to the Cloud is a logical evolutionary step made possible through the mass adoption and capabilities of the internet and
virtualization. Its impact on enterprise Information Technology over the upcoming decade will be enormous given its advantages. We believe it will
prove to be disruptive, changing the game for all actors: software vendors, system integrators, customers, governments and regulators.

• Cloud computing is a disruptive innovation, that has taken root initially in simple applications at the bottom of the market and is relentlessly moving
‘up market’, and will eventually displace established competitors. Today it is only subtly disruptive, but it will impact all IT players over time, both
through "low-end disruption", and "new market disruption":

• Low end disruption: the performance of on premise applications now often overshoots the needs of customers leaving room for Cloud providers to
enter markets by providing sufficient functionality

• • New market disruption: Cloud solutions fit new or emerging needs, creating market segments that were previously not being served by on
premise incumbents