Technology Management

Technology Lifecycles
NMIMS - Session 2
Arun Saxena
arun@Saxena.com
+91 98858 21957
What is a life cycle?
What is a technology life cycle?
•What is a life cycle?
• A lifecycle is a chronological sequence of events or processes that
characterize the entire existence of something, encompassing its
birth, growth, peak performance, and eventual decline.
•What is a technology life cycle?
• Represents the stages that a particular technology or technological innovation
goes through from its initial development to its eventual obsolescence or
replacement.
Phases or stages of technology life cycle
• Inception – technology development
• Introduction – technology availability in the market in the form of
products or services
• Growth – increasing number of users adopting the new technology
• Maturity – technology reaches peak of its performance or growth in
number of users slows down
• Decline – a technology becomes less relevant due to availability of
new and better technology or decline in the market demand
• Termination or replacement – technology is phased out
S-curve of technology performance
1. "The S-curve is a graphical
representation of the different
phases of a technology's
performance or adoption over
time." - Rogers, E. M. (2003).
Diffusion of Innovations.
2. "It is a pattern of slow, rapid, and
then slow development of
technology." - Foster, R. N. (1986).
Innovation: The Attacker's
Advantage.
Chip density of Intel Microprocessors

17 billion transistors:
Intel Core i9

• Greater density means more

components on the chip
• More components = More
computing power
2,300 Transistors
S-curves for the different lighting technologies

Source: Chang and Baek (2010)

 Technology audit - step II

Locomotive
Speed S-
curve
 Technology audit - step II
Conventional Train Fighter Plane Mass Produced Car

Maximum speed
of three transport technologies

Source: Chang and Baek (2010)

 The S curve

Physical Limit
Maturity Established
Technology
Performance

New Arrival

Ascent

Intro
T1 T2

Time / Investment
7 | 10
 USB

New Arrival
Performance

Established
Technology

FDD

T1

Time / Investment
7 | 11
Disconnected S-curves

7 | 12
Why does the performance S-curve eventually
flatten out?
 Why does S-curve eventually flatten out
• Technological constraint
• Limits of a paradigm
• Maturity of the technology
• Physical constraints
• Laws of physics
• Material limitations
• Energy constraints
• Economic constraints
• Diminishing returns
• R&D complexity
• Other constraints
• Limited by the dominant design
• Limited by the production technology
• Limited by the problem solving
approach
• Limited by “technological bottlenecks”
What decides the shape of S-curve
• Technological constraints
• R&D investment
• Market demand
• Regulatory environment
• Knowledge diffusion
• Resource availability
Constructing S-curve
• Longitudinal data collection
• Selecting a suitable S-curve model
• Plotting
• Decision-making
Using Growth Curves
• Forecasting by growth curves involves fitting a growth curve to a set
of data on technological performance, then extrapolating the growth
curve beyond the range of the data to obtain an estimate of future
performance.
• This activity involves three assumptions:
• The upper limit to the growth curve is known.
• The chosen growth curve to be fitted to the historical data is the correct one.
• The historical data gives the coefficients of the chosen growth curve formula
correctly.
Popular Growth Curves for Initial Stages and
S-Curve Modeling
Other Popular Growth Curves for Different
Contexts
A closer look at phases of the S-curve
Organizational
Phase Characteristics Innovation Focus Market Behavior
Impact

Low performance R&D focus

Niche markets Early
Embryonic High effort and investment Radical Innovations High risk and
adopters
Technological uncertainty uncertainty

Rapid improvements in
performance,
Scaleup
standardization and Incremental Mass adoption
Growth Marketing and sales
dominant design, Innovations Expanding market
focus
Decreasing effort per unit of
performance improvement
Phases: S-curve of technology performance
Organizational
Phase Characteristics Innovation Focus Market Behavior
Impact

Plateauing of performance
Operational
improvements Market saturation
Maturity Process Innovations efficiency
Minimal gains despite high Price competition
Cost control
effort

Decline in market
Technology becomes
Decline or New technology share; new Focus on new
obsolete, new technology
Ageing innovation technology starts innovation
arrives,
gaining share
• Competition and strategy in different phases
Embryonic phase
• Market demand grows slowly • Strategy to build market share
• Limited performance and poor quality of • Development of distinctive competencies
the first products and competitive advantage
• Customer unfamiliarity with what the • Invest heavily to develop R&D and
new product can do for them sales/service competencies
• Poorly developed distribution channels
• Lack of complementary products
• High production costs
Growth phase
• Mass markets start to develop
• Technological progress makes a product
easier to use and increases its value to
the average customer.
• Key complementary products are
developed that do the same.
• Companies find ways to reduce
production costs allowing them to lower
prices.
• Strategies
• Maintain relative competitive position
• Strengthen business model to prepare to
survive industry shakeout
• Requires investment to keep up with
rapid growth of the market
Shakeout phase
• Fierce competition to establish
dominant design or a standard
or major market share
• Weak companies exit the
industry
• Invest in share-increasing
strategies
• at expense of weak
competitors
Maturity phase
• Companies have stable market share
• Prices are close to the marginal cost
• No investments in improving the
technology / product
• Process innovations continue to
happen
• There is threat of new technology
• Strategy is
• to hold-and-maintain position
• Invest in new technology
• Managing technological change
Role of technology changes…
 Nature of work changes

We need to be
responsive & flexible
Performance

but controlled

Will it work?
Can we make Exploration,
100K of them fun, creativity
and service?

Will it work?
Exploration,
fun, creativity T1 T2

Time / Investment
7 | 29
 Marketing challenge evolves

Stay close to our

customers
Performance

Who needs it?

Do we have any
customers?

Who needs
this?
T1 T2

Time / Investment
7 | 30
 The way you capture value also evolves
…..

We may not be leading

edge, but you better
Performance

buy from us because…

Sell, make, ship Speed, IP,

service - fast Differentiation
First mover

Speed, IP,
Differentiation
First mover T1 T2

Time / Investment
7 | 31
 Org challenges change …..

Coordinate and control

Performance

Being agile and Entrepreneuri

lean al energy

Entrepreneuri
energy
T1 T2

Time / Investment
7 | 32
 What are the dimensions of performance in your
industry?

Managerial
implications - Are there natural limits to performance improvement?

Use technology
S curve to Where are our competitors on the S-Curve? Which
dimensions of performance are they working on?

answer the
following What does the available data tell you about what stage
the industry is at and how much further it can go?
questions
How reliable are your estimates & what are the key
assumptions that justify your opportunity definition?
Many technology lifecycles exist
• Technology life cycle
• Technology adoption lifecycle
• S curve
• Macro TLC
• Gartner hype cycle
Anderson and Tushman (1990) - cyclical
model of a technological life cycle (TLC)
Phase Characteristics Innovation Focus Market Behavior Organizational Impact

Multiple competing designs. High Early adopters.

R&D focused. High risk
Ferment uncertainty and risk. No clear Radical Innovations Fragmented
and uncertainty.
market leader. competition.
A single design or standard
Dominant Incremental Mass adoption. Marketing and sales
becomes prevalent. Market
Design Innovations Reduced competition. focus. Scaleup.
consolidation.

Technology is mature and

Incremental wellestablished. Marginal Market saturation. Operational efficiency.
Process Innovations
Change improvements and cost Price competition. Cost control.
reductions.

New radical innovation disrupts

New early adopters. R&D focus. Strategic
Discontinuity the dominant design. Market and Radical Innovations
Market disruption. reorientation.
technological uncertainty.
TLC based on Product life Cycle (of Levitt)
Phase Characteristics
Technology is new and
Introduction unproven. High costs and
low adoption.
Rapid increase in adoption.
Growth Economies of scale start to
kick in.
Technology is well-
established. Marginal
Maturity
improvements and cost
reductions.
Technology becomes
Decline obsolete. Declining sales
and eventual phase-out.
Organizational
Innovation Focus Market Behavior
Impact
Early adopters.
R&D focused. High
Radical Innovations Limited
risk and uncertainty.
competition.
Expanding market.
Incremental Marketing and sales
Increasing
Innovations focus. Scale-up.
competition.
Operational
Market saturation.
Process Innovations efficiency. Cost
Price competition.
control.
Cost-cutting.
Declining demand.
None Divestment or
Exit of firms.
transformation.
Technology life cycle (Abernathy & Utterbeck)
Phase Characteristics Innovation Type Market Behavior Organizational Impact
Technology is new and
Radical Few competitors. R&D focused. Flexible
Fluid Phase evolving. High uncertainty
Innovations Niche markets. organization.
and experimentation.
Growing
Transitional Standardization begins. Best Incremental Process optimization.
competition.
Phase practices emerge. Innovations Scale-up.
Market expansion.
Technology is mature and
Specific standardized. Focus on cost Process High competition. Operational efficiency.
Phase reduction and process Innovations Market saturation. Specialization.
improvement.
Technology becomes
Declining Declining sales.
obsolete. Decline in demand None Cost-cutting. Divestment.
Phase Exit of firms.
and eventual phase-out.
 Technology life cycles at a glance

Anderson and Abernathy &

Phases Levitt Foster’s S-curve
Tushman Utterbeck
Inception Ferment Fluid Embryonic

Introduction Introduction

Growth Dominant design Growth Transitional Growth

Maturity Incremental stage Maturity Specific Maturity

Decline Discontinuity Decline Decline Decline

Termination
Why do companies engage in process innovation in
the maturity phase of performance S-curve ?
Applications of S-curve
• Identification – forecasting, competing technology analysis, adoption
rate
• Acquisition – lifecycle analysis, investment strategy
• Exploitation – revenue, strategic adaptation
• Threat analysis – potential risk of new entrants
 Case study –
Imitator-to-Innovator S Curve and Chasms
 Subcontracted
Trading/Assembly
Manufacturing

The Five- Independent

Independent
Design and
Phase Model Manufacturing
Development

Innovation
Characteristics
Technological
Phase Characteristics Capability
Primarily involved in

of the five Trading/Assembly

trading or assembly
operations. Import and
sell products in the local
Very Low: No
manufacturing or
design skills.

phases market.

Act as subcontractors for

Subcontracted other companies, often Low: Basic
Manufacturing Western. Manufacture manufacturing skills.
based on client's designs.

Manufacture products
based on own designs, Moderate:
Independent
which are often Manufacturing and
Manufacturing
imitations or slight basic design skills.
modifications.
 Technological
Characteristics Phase Characteristics Capability

of the five Independent

Design and
Design and develop
own products. Start
to invest more in
High: Advanced
manufacturing and
phases Development R&D and aim for
higher-value markets.
design skills.

Become true
Very High: Cutting-
innovators, creating
edge skills in
new products that
Innovation manufacturing,
may set industry
design, and market
standards or open
understanding.
new markets.
The four chasms

Chasm of Licensed/Subcontract
Manufacturing

Chasm of Independent Manufacturing

Chasm of Independent Development

Chasm of Innovation
Three-Level Firm-Level Factors
Factors
Facilitating Industry-Level Factors
Chasm
Crossings Government Factors
 Role of three factors
Chasm
Licensed/Subcontract
Manufacturing to Independent
Manufacturing
Independent Manufacturing to
Independent Design and Development
Industry-Level Government-
Firm-Level Factors
Factors Level Factors
Level of competition,
Technological learning, market segmentation,
Limited role in this
investment in R&D, and and existence of a
phase.
capability building. "good-enough"
market.
Level of competition,
Further investment in R&D, talent market segmentation, Limited role in this
acquisition, and market research. and existence of a phase.
"good-enough" market.
 Role of three factors

INDUSTRY-LEVEL GOVERNMENT-LEVEL
CHASM FIRM-LEVEL FACTORS
FACTORS FACTORS
Level of competition, Direct or indirect
Independent Design and Heavy investment in R&D,
market segmentation, assistance, such as
Development to innovation, and market
and existence of a "good- technical specifications
Innovation understanding.
enough" market. and standards.

Level of competition, Direct or indirect

Continuous innovation,
Innovation to Market market segmentation, assistance, such as
global market expansion,
Leadership and existence of a "good- technical specifications
and brand building.
enough" market. and standards.
Technology performance and market diffusion
S-curve
Source: Rogers (1962), "Diffusion of Source: Richard Foster, Innovation:
Innovations" The Attacker’s Advantage

Market Diffusion S-curve Technology Performance S-curve

A comparison –
performance and diffusion s-curves
Criteria Technology Performance S-Curve
Describes how the performance of
Conceptualization a technology improves over time
with R&D investment.
X axis Time, R&D investment
Technological performance,
Y axis
efficiency
Market demand, technological
Other driving factors
constraints
Diffusion S-Curve
Describes how a technology is
adopted within a market or
community over time.
Time, social factors
Adoption rate, market penetration
Communication channels
Relative advantage, compatibility,
complexity
A comparison –
performance and diffusion s-curves
Criteria Technology Performance S-Curve Diffusion S-Curve

Ferment, Takeoff, Maturity

Phases Introduction, Growth, Saturation
Embryonic, growth, maturity
Technology assessment, R&D Market strategy, policy formulation,
Applications
management social impact assessment
Technological performance and Adoption rates and market
Focus
efficiency penetration

Can be shorter-term, focusing on

Often longer-term, focusing on the
Temporal Aspect the adoption phase of a
entire lifecycle of a technology.
technology's life cycle.

Foster (1986), "Innovation: The Rogers (1962), "Diffusion of

Key References
Attacker's Advantage" Innovations"
 Characteristics of adopter categories

Social and
Adopter Risk Interest in
Economic Knowledge Level Other Factors
Category Tolerance Product
Status

High economic
Extremely high, Often serve as opinion
status, well- Expert-level,
Innovators Very High technology- leaders, willing to
connected often specialized
centric experiment
socially

Very
Very high, see Value forward-thinking
High economic knowledgeable,
Early strategic and vision, key in
status, social High though not as
Adopters advantage in opening new market
leaders specialized as
early adoption segments
Innovators
 Characteristics of adopter categories

Adopter Social and Risk

Knowledge Level Interest in Product Other Factors
Category Economic Status Tolerance

Good general
Wait for reviews and
Early Above-average knowledge, rely High, but need
Moderate recommendations, prefer
Majority economic status on proven practical utility
established solutions
benefits

Limited Moderate, adopt

Average or below- Prefer well-established
Late knowledge, rely due to social or
average economic Low products, buy from large
Majority heavily on social economic
status companies
consensus necessity

Below-average
Minimal, often Low, resistant to Skeptical of new technology,
Laggards economic status, Very Low
outdated change very price-sensitive
socially isolated
 Purchase considerations for different categories - Vision and Utility

Early Early Late

Parameter Innovators Adopters Majority Majority Laggards
Aligned
Vision Less Highly Aligned with
with Not aligned
Alignment concerned aligned practicality
necessity
Practical Less
High High Moderate Low
Utility concerned
Preferable
Proof of Often
Not needed but not Required Required
Concept irrelevant
strict
 Purchase considerations for different
categories - Quality and Decision Factors

Early Early Late

Parameter Innovators Adopters Majority Majority Laggards
Quality and Less Extremely
Forgiving Not forgiving Not forgiving
Reliability forgiving cautious
Competitive Less Highly Slightly Not
Concerned
Advantage concerned concerned concerned concerned
Community
Not needed Preferable Required Required Required
and Support
 Purchase considerations for different
categories - Technical and Personal
Factors

Early Early Late

Parameter Innovators Adopters Majority Majority Laggards
Social and
Middle to Middle to
Economic Often high High Low
high low
Status
Risk
High Moderate Low Very low None
Tolerance
Knowledge High High Moderate Low Very low
Market
diffusion of
new
technology
product
Dynamics of Market Diffusion
Differences in Diffusion Rates
Different markets develop at different growth rates.
Electricity
TV Radio Telephone

VCR Car
Cell-
phone

Source: Peter Brimelow, “The Silent Boom,” Forbes, July 7, 1997, pp. 170-171. Reprinted by permission of Forbes Magazine © 2002 Forbes, Inc.

6 | 64
Drivers of Diffusion
• Relative advantage
• Compatibility
• Complexity / simplicity
• Trial ability
• Visibility / observability

Diffusion of Innovations, Everett M. Rogers

Diffusion Factors of LED lights –
Rogers five factors

Factors LED Light Bulbs Incandescent Light Bulbs

80% more energy-efficient, lifespan of up
20% energy-efficient, lifespan of 1,000 hours,
Relative Advantage to 25,000 hours, emits 200-300 lumens
emits 10-17 lumens per watt
per watt
Compatible with most existing fixtures; Compatible with existing fixtures; no smart
Compatibility
smart home integration home integration
Easy to install; some offer app-based
Complexity Easy to install; no additional features
controls

Available in single units; average cost was Available in single units; average cost $0.50-
Trialability
Rs.300 per bulb that came down to Rs.38 $1.50 per bulb

Energy savings can be up to $300 over the

Observability Higher energy costs; no long-term savings
bulb's lifetime
Diffusion Factors of LED lights -
Social System, Communication Channels, Time, Nature of the Social System

Factors LED Light Bulbs Incandescent Light Bulbs

Adopted by environmentally conscious

Social System Adopted widely before LEDs became popular
consumers, businesses

Communication Online reviews, social media, in-store

Traditional advertising, in-store displays
Channels displays

Time Rapid adoption in the last decade Dominant for many decades

Nature of the More prevalent in developed countries

Prevalent worldwide
Social System due to higher initial cost
Diffusion Factors of LED lights -
Change Agent's Promotion Efforts, Type of Innovation-Decision,
Innovativeness, Rate of Adoption

Factors LED Light Bulbs Incandescent Light Bulbs

Change Agent's Strong marketing focus on energy

Limited recent promotion efforts
Promotion Efforts efficiency and sustainability

Type of Innovation- Optional, individual households and

Optional, but was the default for many years
Decision businesses can choose to adopt
Seen as innovative due to energy
Innovativeness Seen as traditional, less innovative
efficiency and smart home compatibility

Rate of Adoption High rate of adoption in recent years Declining rate of adoption
Gartner’s hype cycle
Gartner’s hype cycle Source: Gartner Research
(May 2003)

• The cycle tracks the public

perception, market adoption,
and maturity of emerging
technologies over time
• X-axis: time or lifecycle stage
• Y-axis: level of public
interest, expectations or
hype
 • X-axis: years
DVD Hype cycle • Y-axis: No. of articles in Electronic
Engineering Times

Year GHC Phase

1994 Technology trigger
1997 Peak of inflated expectations
2001 Trough of disillusionment
2001 – 2002 Slope of enlightenment
Plateau of productivity
GHC of Autonomous vehicles
• Xxx
2016

2017

2018

2019
 Gartner’s
hype cycle –
how it works
 Gartner’s
hype cycle –
one among
many life-
cycles

Source: Gartner Research (May 2003)

How the hype cycle
works
• Technology Trigger: A potential
technology breakthrough kicks
things off. Early proof-of-concept
stories and media interest trigger
significant publicity. Often no usable
products exist and commercial
viability is unproven.

Source: Gartner Research (May 2003)

How the hype cycle
works
• Peak of Inflated Expectations: Early
publicity produces a number of
success stories — often
accompanied by scores of failures.
Some companies take action; many
do not.

Source: Gartner Research (May 2003)

How the hype cycle
works
• Trough of Disillusionment: Interest
wanes as experiments and
implementations fail to deliver.
Producers of the technology shake
out or fail. Investments continue
only if the surviving providers
improve their products to the
satisfaction of early adopters.

Source: Gartner Research (May 2003)

How the hype cycle
works
• Slope of Enlightenment: More
instances of how the technology can
benefit the enterprise start to
crystallize and become more widely
understood. Second- and third-
generation products appear from
technology providers. More
enterprises fund pilots; conservative
companies remain cautious.

Source: Gartner Research (May 2003)

How the hype cycle
works
• Plateau of Productivity: Mainstream
adoption starts to take off. Criteria
for assessing provider viability are
more clearly defined. The
technology's broad market
applicability and relevance are
clearly paying off.

Source: Gartner Research (May 2003)

Gartner hype cycle of emerging technologies 2012
 Gartner hype
cycle of
emerging
technologies
(2014)

Source: Gartner Research (2014)

 Gartner hype
cycle of
emerging
technologies
(2015)

Source: Gartner Research (2015)

 Gartner hype
cycle of
emerging
technologies
(2016)

Source: Gartner Research (2016)

 Source: Gartner Research (2017)

Gartner hype cycle of emerging technologies 2017

Expectations

Tech Peak of Inflated Trough of Slope of Plateau of

Maturity
Trigger Expectations Disillusionment Enlightenment Productivity
 Source: Gartner Research (2018)

Gartner hype cycle of emerging technologies 2018

Expectations

Tech Peak of Inflated Trough of Slope of Plateau of

Maturity
Trigger Expectations Disillusionment Enlightenment Productivity
 Source: Gartner Research (2017)

Gartner’s
hype cycle
India 2017
• Classifying technology
Many classifications exist
• By stage of development:
• conceptual, prototype, emerging, mature, legacy, and
obsolete
• Embryonic, growing, mature and aging (S-curve)
• By competitive potential:
• base, critical, pacing, emerging
• By impact:
• disruptive, sustaining
Technology classification by stage of
development
Type of Technology Description Example
Conceptual These are ideas or theoretical designs that have Quantum teleportation (still largely
Technology not yet been developed. theoretical)
Prototype Technologies that exist in a preliminary form for Flying cars (prototypes exist, not
Technology testing and experimentation. commercially available)
Technologies in the early stages of adoption that
Emerging Blockchain (beyond prototype, not
have passed the prototype phase but are not yet
Technology yet mainstream)
widely used.
Technologies that are fully developed and have Smartphones (ubiquitous, mature
Mature Technology
been widely adopted. ecosystem)
Older technologies that are still in use but are Fax machines (still used, being
Legacy Technology
being phased out or replaced. replaced)
Technologies that have been largely replaced and Pagers (largely replaced by mobile
Obsolete Technology
are no longer in widespread use. phones)
Lindsay (2000) technology classification based
on their competitive potential
Technology Classification Description Examples Justification
Widely used across
Essential for basic 1. ICE engine industries and well
Base/Enabling business operations but 2. LCD/LED understood by
Technologies offer low competitive 3. 3G competitors; do not
impact. 4. Big data provide a competitive
advantage.

1. Google page-rank Help firms differentiate

Well-embodied in algorithm their offerings either in
products and processes, 2. Amazon's cost or in
Critical/Key Technologies
offering high competitive Recommendation feature/performance;
impacts. Algorithm source of competitive
3. Tesla's Electric Battery advantage.
Technology
Lindsay (2000) technology classification based
on their competitive potential
Technology Classification Description Examples Justification
Have big competitive
Under experimentation 1. Blockchain
impact and often displace
Pacing Technologies and have the potential to 2. CRISPR Gene-Editing
key technologies; often
redefine the industry. Technology
come from new entrants.
Competitive impact is
In the early research stage
1. Quantum Computing unknown, but they are
or emerging in other
Emerging Technologies 2. Autonomous Vehicles expected to become
industries; competitive
tomorrow's pacing
impact is unknown.
technologies.
Lindsay (2000) CLASSIFICATION OF THE COMPETITIVE POTENTIAL FOR TECHNOLOGIES

technology
classification Low,but
essential
ENABLING
TECHNOLOGIES

based on their PRESENT

Competitive
Impact High, a driver
CRITICAL
competitive
Of cost or
differentiation TECHNOLOGIES

potential TECHNOLOGY

Proven and
Could be high
PACING
TECHNOLOGIES
Potential
FUTURE Competitive
Impact
Unproven but EMERGING
promising
TECHNOLOGIES
Technology classification based on role or
strategic importance
Type of Technology Description Example (Technology)

Foundational technologies critical for the functioning and

Core Technology Internal combustion engine
competitiveness of an organization.

Technologies that enable the development of other Semiconductor

Enabling Technology
technologies or products. manufacturing technology

Differentiating Technologies that give a product or service a unique

PageRank Algorithm
Technology feature or capability.
Technology classification based on role or
strategic importance
Type of Technology Description Example (Technology)

Technologies that support or enhance the core

Peripheral Application Programming
technology but are not central to the primary product or
Technology Interface (API)
service.

Older technologies that are still in use but are generally

Legacy Technology Steam engine
being phased out.

Disruptive Technologies that have the potential to significantly alter

5G Networks
Technology industries and markets.

Transitional technologies that serve as a bridge between

Bridging Technology Compact discs
older and newer technologies.
Thank you