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Another research conducted by Kaltenecker et al. (2015) focuses
on the current shift that is taking place in the software industry. In order to
remain competitive and survive, firms are changing the way they deliver
software. Instead of delivering software On-premise, an increasingly amount of
firms are delivering software On-demand. Unlike a couple of years ago when the
potential of cloud computing (CC) was not recognized, the current debate
stresses the potential of CC to disrupt the structure of software industries. By
using Christensen’s disruptive innovation theory and five case studies, the
authors construct strategies for software firms undergoing the transformation.

The research starts by sketching a background in cloud computing technology, the
disruptive innovation theory and strategies for managing disruptive
innovations. Next, the methodology and results of the case study
are discussed. Lastly, the results of the case study are shown.

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The serviced offered by CC can be divided into three
levels: Infrastructure as a Service (laaS), Platform as a Service (PaaS) and
Software as a Service (SaaS). In the first level, providers offer
infrastructure, servers, networks and storage capacity. This leaves the choice
of the hardware to the end-user. The second level offers a platform allowing to
develop and integrate applications without the need to build an infrastructure.

The third level enables the provider to provide the end-users with applications
that can be used trough the cloud. The widest range of applications are


The main theory in this paper is Christensen’s
disruptive innovation theory. The disruptive innovation theory describes
technological changes that enable smaller firms with less resources to gain a
bigger proportion of the market share. While the incumbents focus on optimizing
their products and services for their target group, they often do not consider
investing in products and services that are based on new technologies. The
behavior of the incumbents can be fully related to the preferences of the most
profitable customers. Eventually the new technologies are able to compete with
the current dominant technologies with the likelihood of the smaller firms that
adopted the new technological changes, displacing the incumbents. An example is
the rise of Microsoft, which adapted to new technologies and took full
advantage of the shift to personal computers while the incumbents where focuses
on mainframe.

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