The_Innovators_Dilemma__Clayton

procure the component flash chips; they design and have fabricated an interface circuit, such as SCSI,
to govern the drive’s interaction with the computing device; they assemble them either in-house or by
contract; and they then market them.
In other words, flash memory actually builds upon important competencies that many drive makers
have developed. The capabilities viewpoint, therefore, would lead us to expect that disk drive makers
may not stumble badly in bringing flash storage technology to the market. More specifically, the
viewpoint predicts that those firms with the deepest experience in IC design—Quantum, Seagate, and
Western Digital—will bring flash products to market quite readily. Others, which historically
outsourced much of their electronic circuit design, may face more of a struggle.
This has, indeed, been the case to date. Seagate entered the flash market in 1993 via its purchase of a
25 percent equity stake in Sundisk Corporation. Seagate and SunDisk together designed the chips and
cards; the chips were fabricated by Matsushita, and the cards were assembled by a Korean
manufacturer, Anam. Seagate itself marketed the cards. Quantum entered with a different partner,
Silicon Storage Technology, which designed the chips that were then fabricated and assembled by
contract.
The Organizational Structure Framework
Flash technology is what Henderson and Clark would call radical technology. Its product architecture
and fundamental technological concept are novel compared to disk drives. The organizational structure
viewpoint would predict that, unless they created organizationally independent groups to design flash
products, established firms would stumble badly. Seagate and Quantum did, indeed, rely on
independent groups and did develop competitive products.
The Technology S-Curve Framework
The technology S-curve is often used to predict whether an emerging technology is likely to supplant
an established one. The operative trigger is the slope of the curve of the established technology. If the
curve has passed its point of inflection, so that its second derivative is negative (the technology is
improving at a decreasing rate), then a new technology may emerge to supplant the established one.
Figure 2.7 shows that the S-curve for magnetic disk recording still has not hit its point of inflection:
Not only is the areal density improving, as of 1995, it was improving at an increasing rate.
The S-curve framework would lead us to predict, therefore, that whether or not established disk drive
companies possess the capability to design flash cards, flash memory will not pose a threat to them
until the magnetic memory S-curve has passed its point of inflection and the rate of improvement in
density begins to decline.
53