Response to disruptive innovation with hybrid products: transition of Oracle's business applications to cloud computing

Abstract

Success and failure of the incumbent's response to disruptive technologies have been in the focus of innovation and strategy research for decades. Recent papers have suggested that developing a hybrid product, which combines old and new technology, can be a stepping stone towards fully embracing new technology. This paper explores the role of hybrid products in the response of Oracle Corporation, to cloud computing, a disruptive innovation. The development of a hybrid product allowed Oracle to successfully transition its business applications to a cloud offering while not abandoning the needs of its customers with respect to traditional products. The findings show that changing the positioning of a hybrid product by moving the focus from old technology entirely to the new can support an evolving response to disruptive innovation. The paper also considers the implication of cloud computing on Oracle's business in emerging countries.