Looking at my established competitors through the Innovator's Dilemma's lense

Over the holiday weekend, I finally got to read Innovator’s Dilemma by Clayton M. Christensen.  This book has been a must read for entrepreneurs and has been on my own to-read list for months.  In trying to apply what I have learned, I was intrigued at looking at the large established industry players.  As someone who is breaking into the business intelligence space, the understanding of the fast paced disk drive industry should be interesting.  Interesting because I like the disc industry is technical and moved very quickly.   But the excavator example to me is more compelling.  

The business intelligence industry right now is dominated by the large hydraulic excavators with large bucket-size made for  big industry.  Gartner’s magic quadrant is dominated by large enterprise players such as Microsoft, SAP and Oracle.  And their products are really out of reach for smaller business that can’t pay hundreds of thousand of dollars in licenses and maintain IT organizations consisting of half a dozen technical specialists.  Finally, the expensive consultants to implement a business intelligence system in the first place.  

Although these behemoth players have moved to cloud technology and at times tried to simplify their enterprise products for the smaller company, my observation is that they are still serving their established customers- the large enterprise.  Concentrating on these large enterprises, at this time will continue to bring them the growth numbers they need to keep stock prices high.  And the larger margins for incremental technology improvements, continue to work for these big global companies.

Producing downstream to lower margins has seemed nearly impossible for these large enterprise business intelligence firms.  Perhaps this is because of their existing cost structures and investment in licensing operations does not allow them to easily change.  Another resource that would not easily accept selling down market are the extensive and skilled sales representatives, who have been paid healthy commissions on million dollar deals.

It will be interesting if their leadership will be able to address technology disruption through acquisition.