New Productivity Suite in the Mobile Era – Who will be the Winner ?

In this blog post, I discuss the applicability of Christenson’s framework as outlined in his book “The Innovators Dilemma” to productivity suite market represented by products such as Word, Excel, Powerpoint. My analysis leads me to believe that the conditions are ripe for another disruption in the productivity suite, though it remains to be seen who will be the winner of productivity suite in the mobile era.

Christenson, in his book,  discusses product evolution model in which the basis of competition moves from functionality to reliability to convenience and then price. He shows when functionality from multiple vendors overshoots the market demand, and customers can no longer differentiate based on functionality, the basis of competition moves to reliability. Similarly, when two or more vendors have highly functional and reliable products, customers choose based on convenience. He uses examples from multiple industries to make his point but the most interesting and closest to productivity suite is Intuit’s “Quickbooks” example.   He applies the model to Quickbooks that changed the basis of product competition from functionality to convenience and captured 70% of the small business accounting software market within 2 years of its introduction.

Let us try to apply this model to productivity suite.

From the late 1980s to 2000, Microsoft ruled the world with their Desktop/Office suite. A series of sustaining innovations kept Microsoft in the leadership position when the basis of competition was still functionality.

The widespread adoption of the web in the late 1990s and early 2000s allowed companies such as Google to disrupt Microsoft by creating a new productivity suite that was designed to leverage the web as a delivery medium.  Google designed a “good enough” productivity suite that met the functionality needs of its mainstream market (consumers). The basis of competition therefore changed from functionality to convenience. Simplicity of function, access from anywhere, ease of content sharing and collaboration enabled by “cloud” were “convenience” differentiators that allowed Google to start capturing Microsoft’s consumer market. However, the consumption end points that the suite was designed for were still primarily desktops. Microsoft soon responded with its own offering that now competes with Google’s.

Since the introduction of the iPhone in 2007, we have seen a massive shift from computing devices such as PCs to alternatives such as tablets and mobile phones In addition, the desire to stay socially connected can be clearly seen as new apps such as WhatsApp, WeChat, and Vine gain viral adoption.

Mobility and Social Networking is driving a new behavior where people want to get things done quickly in small chunks. Chris Dixon, a serial entrepreneur and investor, in this blog “The internet is for snacking” puts it succinctly – The successful products took big meals and converted them to snacks. The Internet likes snacks – simple, focused products that capture an atomic behavior and become compound only by linking in and out to other services. This has become even more so with the shift to mobile. People check their phones frequently, in short bursts, looking for nuggets of information.

This brings up the question whether conditions are ripe for another disruption in the productivity suite that redefines how people would like to be productive on tablets and phones. Simple, quick, in short bursts, socially enabled, are just a few of the new “convenience” attributes that would likely be the basis of competition.

The fact that we are beginning to see some new productivity tools in the marketplace having some of these convenience attributes is indicative of a potential disruption. For instance, a new social word processor for mobile such as Quip was designed from ground up for mobile devices with social collaboration built in. Some Google folks who saw an opportunity to reimagine productivity in a mobile and social world started this company. They began with a word processor, but have a mission to create the modern productivity suite for the mobile era. Another example – Box recently announced a new product Box Notes that takes a similar approach and builds upon the assumption that existing word processors have overshot the market.

BTW, the impact of this paradigm shift in computing isn’t just limited to consumers. The confluence of cloud, social and mobility forces is not only transforming organizations culturally (e.g from hierarchical to flat, from silos to open and connected, and from closed workspaces to flexible work styles) but also driving us to a new era of continuous productivity where the work lives and personal lives are intermixed and, to quote from the blog post, where  “People have the ability to time slice, context switch, and proactively deal with situations as they arise, shifting from a world of start/stop productivity and decision-making to one that is continuous”.

To sustain this transformation, we need to challenge fundamental assumptions baked into the productivity suite written decades ago for desktop environment. Retrofitting the old stack in the new world of socially connected people with mobile devices is a band aid which will last only till the industry is able to create a new modern stack that meets the functionality and reliability needs and has most of the convenience attributes discussed earlier.  The modern tools that would enable these new experiences in enterprises would in most cases be adopted/derived from consumer apps and in a few cases may need to be designed exclusively for enterprises. As an example – Cotap is a startup that was funded to bring WhatsApp type capabilities to the enterprise.

Given this paradigm shift in end user computing, it appears a disruptive change in productivity software is inevitable. However, it remains to be seen who creates the new modern productivity software for the mobile era. Would it be startups like Quip or Box or the incumbents such as Microsoft and Google?

Christenson describes five laws of disruptive technology for companies to understand so they can deal with the disruptive changes appropriately. The laws are listed below.  A detailed explanation of these laws is beyond the scope of this blog post, but the reader is advised to read their description in the book.

1)      Companies Depend on Customers and Investors for Resources.

2)      Small Markets Don’t Solve the Growth Needs of Large Companies

3)      Markets That Don’t Exist Can’t Be Analyzed

4)      An Organization’s Capabilities Defines Its Disabilities

5)      Technology Supply May Not Equal Market Demand

If the incumbents understand these laws, and can harness the forces underlying the laws rather than fight them, they may be able to maintain their market position in the productivity space in the mobile era.

So who do you think the winner will be?


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