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DISRUPTIVE TECHNOLOGIES

In chapter 3 of the textbook Management Information Systems by Kenneth C Laudon and Jane P. Laudon 12th edition, the author mentions the term disruptive technologies which is defined as a technology breakthrough that brings about sweeping change to a business, industry, or market. These innovative technologies force companies to react to market pressures and often result in changes to an organizations strategy and Management Information Systems
By doing a search of the internet or by other research methods, find an example of a company that introduced a disruptive technology (remember to post references).
Ponder these questions:
1) What was the disruptive technology?
2) Why do you think it can be classified as disruptive?
3) What was the impact on all the other companies operating in this particular industry?
4) Who were the winners and losers? Explain why some prospered while others failed?
5) How did this technology change the way we work, live, and play?
What was the disruptive technology?
            Skype used P2P and VoIP technologies, which brought about a new way of delivering products and services (Tushman & Nadler, 1986).   Both VoIP and P2P were extremely disruptive because they each brought about new performance standards in certain niche market contexts. VoIP offered alternative and cheap methods of placing a phone call while P2P offered a faster and a more convenient way of accessing content and files over the internet.
 Why do you think it can be classified as disruptive?
            Skype introduced a number of services by integrating P2P (per-to-peer) computing with VoIP (voice over the internet protocol), which offered an alternative to the existing voice communication. Both of these technologies were highly disruptive, because they promised to fundamentally alter the telecommunication scene. Following the discovery of these technologies, it became clear to innovators and entrepreneurs that voice services and traffic would become the next most important applications to fully capitalize on IP. Separately, innovations in the world of P2P computing made it possible to efficiently distribute data over wide network coverage with little or no centralized control. Skype successfully combined the two disruptive technologies to deliver its exceptional services (Thomond et al., 2004). Skype changed the traditional business model and marketing by developing a marketing strategy that was driven by the customers, which got the message across better and effectively than the more sophisticated campaigns.
What was the impact on all the other companies operating in this particular industry?
             Following the entry of Skype in the industry with its disruptive technology, all the other companies in the industry were forced to seek ways of surviving in the newly competitive industry. Some companies sought strategic partnership with other companies, including Skype, while others had to seek more innovative ways of improving their services to avoid losing customers (Weber & Nof, 2005).
Who were the winners and losers? Explain why some prospered while others failed?
            This technology came together with the excellent voice quality that made Skype stand out from the rest of its competitors – hence the biggest winner. The customers were also winners because they could use Skype’s account to call a traditional phone line at relatively low rate. Some of the other companies that benefited from Skype developments include Siemens AG and Plantronics, which strategically partnered with them to introduce branded accessories and headsets with the aim of facilitating seamless customer switch to their VoIP product, from traditional services. Skype, therefore, penetrated into PSTN market, through its introduction of the Skype Out service and later SkypeIn service, which involved integration of VoIP with the traditional PSTN allowing connection to users who did not have Skype. This innovation disrupted traditional voice carriers such as Verizon, AT&T, and Qwest hence making them big losers. In addition, entry of Skype disrupted other VoIP providers, such as Net2Phone, Vonage, 8×8, FreeWorld and DialPad, forcing them to suffer from very high infrastructure costs (Weber & Nof, 2005).
How did this technology change the way we work, live, and play?
      Skype was a disruptive technology because it altered the way people interact, work and spend their leisure time. When people use Skype to make cheap or free voice call, hence making it possible to see the people they are talking to, this really added a lot of benefits and hence changed the status quo. Since this technology introduced a wealth of offerings, Skype made available free downloadable software from its website, which enhanced instant use of the…………………………………………………….
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