Keynote speakers at SCO Forum '99 last month discussed the potential of new technologies such as the Internet, IP telephony and the open-source movement to bring industry giants to their knees while elevating new companies to leadership.
"Multiple disruptions abound, and in those disruptions are huge opportunities and huge risk," said Doug Michels, president and CEO of SCO, based in Santa Cruz, California.
Clayton Christensen, professor of business administration at Harvard Business School, said historically large companies have failed, not because of bad management, but because the company had overshot customer needs. He explained as marketers target the high-end and very profitable customers, the low end is left in a vacuum needing smaller and cheaper technology. Furthermore, early products tend to be very integrated in design, whereas new versions tend to spawn modular designs.
When a new player in the market comes along to service that low end, and usually with cheaper, modular offerings, the large company can be toppled.
"As IP protocols come at the market from the bottom ... they threaten to disrupt circuit-switched networks," Christensen said by way of example.
"We're likely to see a very big change in the leadership of the telephony market as a result of this disruptive technology ... The way you get ahead of competition in the post-overshoot world ... is to go after smaller niche markets," he said.
For example, he said, Intel put itself in a position to be toppled by servicing the high-end market with increasingly powerful chips. But to block the low-end competition such as AMD, Christensen said, Intel put out Celeron.
However, he said Intel is not completely safe.
"Today, Intel dominates the microprocessor world as an integrated company ... but the chips in hand-held devices, which we all believe will soon populate the world, will be modular in design," Christensen said.
Therefore, he said, those companies that are developing modular microprocessors to be put into hand-held devices will win over Intel.
In another example of modularity, Christensen said Java could be highly disruptive because it is hard to fit into big applications and it is modular in design.
"If history plays out again, I think the modularity of Java will get that company before the Justice Department will," he said in oblique reference to Microsoft.
Ironically, in an interview with Network World Canada, SCO's Michels explained that his company's marketing of Tarantella, a potentially disruptive application brokering technology, is currently being kept tightly integrated and marketed only to high-end customers.
When asked about Christensen's warnings, Michels said SCO's aim is to bring Tarantella to the low end eventually, but he could not elaborate as to how or when.
Michels's keynote address focused more on the disruptive power of the Internet and the open source movement. With the Internet, he cited how it has "demolished" traditional ways of doing business.
"More and more applications are being designed to use that browser interface, and that's a change because it doesn't matter what computer you're using ... It doesn't have to be a PC and it doesn't have to be running Windows," Michels said.
As for open source, Michels said: "There are some people who think it will make software worthless. That's not true ... the real value people pay for software is a reliable vendor."
In support of the open-source movement, Michels announced that SCO's professional services staff will be trained in various flavours of Linux in order to help customers implement the open-source system if desired or needed.
The other main highlight of SCO Forum centred on Project Monterey, SCO's partnership with IBM, Intel and other companies to develop a 64-bit Unix for Intel's upcoming IA-64 or Merced processor.
"We're on time to ship when Intel ships Merced," Michels said in an interview, adding that Project Monterey is well on schedule but not being rushed.
"If we get it wrong, customers will go to Sun ... so we have that pressure to get it right and we're in trouble if we don't. Sun's damned good, so we can't take it easy and go for the tie," Michels said.