Disruptive Technologies, Services, or Business Models?

Abstract

Convergence in the realm of media, consumer electronics, computer technologies, and telecommunications has contributed to societal changes in terms of individual expectations and behavior leading to the re-appraisal of traditional market segments. Key innovations like the internet create a global platform that provides for new means in product and services configuration. This expands opportunities and threats in the business environment contributing to increased competition in a dynamic environment where traditional boundaries are shifting. In a world of converging technologies, increasing marketplace dynamics and rapid technological advances, new upcoming "disruptive technologies" such as Voice-over-IP (VoIP) pose threats to traditional telecommunications companies. Business leaders in order to succeed need to be "thinking outside the box". We introduce the concept of a business model as a tool in crafting strategy for the purpose of achieving sustainable innovation in the face of the reshaping of the industry and the market. We apply this model to the VoIP market and in particular the Skype technology and service. The significance of this contribution is that it highlights the importance of developing an innovative business model to take advantage of disruptive technologies. Our analysis of the dimensions of innovations shows that the more dimensions the greater the impact. ICT convergence is leading to a paradigm shift with innovation effects that are both effective and disruptive. Thus, leading to equally disruptive business models reshaping innovation strategy.