He literally wrote the book on disruption, which I expect, from your comment, you haven't read. http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin... He doesn't need to start a company to prove his point because it's not really about startups, it's about the problems big companies have. He wouldn't be the founder or employee number 1, he would be employee 10,000, the one they get when everything starts going wrong.

The best book I've read in a long time: http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin...

I have to agree with the Chronicle's basic point which is that Microsoft has talked about "cloud computing" for a long time and not delivered anything. Even a bad anything.

Its a very good example of the Innovator's Dilemma [1] in action, you've got some smart folks who see a future problem, and start creating interesting technology and vision around that problem, and then the reality that the company doesn't "need" it now gets in the way of pushing it from concept into the product stream. So it never gets to the 'commit' point where everyone is on board with shipping it to customers and trying to support it.

Why? Because that is "risky" but just tweaking the current product stream and adding a few features or targeting an adjacent market is much lower "risk."

As Clayton points out in his book innovation always loses in the 'risk' evaluation. So companies that are 'managed' always strive for optimum returns, and since you can't predict the future they are risk averse. Companies that are 'lead' on the other hand have the capability to ignore the risk in order to get to the rewards on the other side.

Startups have the risk meter pegged so it doesn't enter into their management decisions, instead they are focussed on execution and they flame out or succeed as they will and when they succeed they clarify the risk around their idea (if it flops the managers can pat themselves on the back for avoiding that land mine, if it takes off the managers wring their hands and wonder if they should have been able to forecast that success.

I think Apple may have combined some protocols and services into a useful adjunct to their product strategy. We won't really know until later when we see how it fairs. From the presentations and markitecture that Microsoft has espoused it seems like they could have done something similar but they didn't. It does reflect badly on how they are being managed, and that buck does stop at Ballmer. So it will be interesting to see how this affects his future there.

[1] http://www.amazon.com/dp/0060521996

Hmm... a few that jump to mind for me would be:

The Art of the Start - Guy Kawasaki http://www.amazon.com/Art-Start-Time-Tested-Battle-Hardened-...

Outside Innovation - Patricia Seybold http://www.amazon.com/Outside-Innovation-Customers-Co-Design...

Unleashing the Killer App - Larry Downes & Chunka Mui http://www.amazon.com/Unleashing-Killer-App-Strategies-Domin...

Wellsprings of Knowledge - Dorothy Leonard Barton http://www.amazon.com/Wellsprings-Knowledge-Building-Sustain...

The Innovators Dilemma - Clayton Christensen http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin...

Crossing the Chasm - Geoffrey A. Moore http://www.amazon.com/Crossing-Chasm-Geoffrey-Moore/dp/00605...

The Startup Game: Inside the Partnership between Venture Capitalists and Entrepreneurs - William H. Draper http://www.amazon.com/Startup-Game-Partnership-Capitalists-E...

Some of these aren't necessarily about startups, but I think they all have something valuable to offer. YMMV.

To answer #1, three books I would consider must-reads are:

Crossing the Chasm by Geoffrey Moore He discusses the Technology Adoption Lifecycle and hi-tech marketing. http://www.amazon.com/Crossing-Chasm-Geoffrey-Moore/dp/00605...

The Innovator's Dilemma by Clayton Christensen This Harvard business professor discusses what makes a disruptive innovation. http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin...

Guerrilla Marketing by Jay Levinson He discusses some scrappy techniques for promoting your businesses. Not all are applicable to web or hi-tech companies, but it can still spark some great ideas. http://www.amazon.com/Guerrilla-Marketing-4th-Inexpensive-St...

The Innovator's Dilemma explains why. The response "I don't get it -- I read through the entire review and I was hard pressed to find where ________ shined" is exactly what entrenched companies said a year or two before they were destroyed by the lower capability (but growing) competitors.

In The Innovator's Dilemma, Christensen spends quite a bit of time on the disk drive case study, where over several generational transitions the entrenched bigger-faster-better companies when under because they could not match their lower capability (smaller, but more expensive in the case of hard drives) competitors. When the competitors broke out of their niches and into the mainline with size competitive products, they destroyed the entrenched companies with their cost advantages.

ARM owns the low power niche and now it is threatening to catch up with Intel - being "good enough" - in low value moderate performance market. The traditional response of an entrenched company is to retreat to "higher ground," in this case more complex, faster desktops and servers. The problem is, "higher ground" has limited height and the low areas of that high ground keep eroding. Intel is addressing the threat with lower power (and slower) chips - the Atom.

It will be very interesting to see if Intel can stave off their dilemma and become competitive with ARM on the low power, moderate performance, extremely low cost front... and that last part extremely low cost is both the key and Intel's Achilles heel.

References:

* http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin...

* http://en.wikipedia.org/wiki/Disruptive_technology

The Innovator's Dilemma by Clayton M. Christensen (http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin...)

If you're interested in this, you should check out The Innovator's Dilemma by Clayton Christensen. He walks you through how large companies (most of his examples are from the hard drive industry) are often structurally incapable of embracing the revolutionary change which will inevitably overtake them.

http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin... (not an affiliate link)

I heard about the concept from Clayton Christensen's Innovator's Dilemma. http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin... The book talks about the buying hierarchy in the context of disruptive innovations. It's highly recommended.

I doubt that could successfully be done more than rare occasions, for some of the problems see Christensen's "The Innovator's Dilemma" http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin...

Better can be enough, if it's ENOUGH better. The rule of thumb is that something has to be at least twice as good to replace a similar but already functioning system (the real costs of retraining and lost productivity during the changeover can almost never be accurately calculated, that's why there is the rule of thumb). For an academic view, see "The Fable of the Keys" http://www.utdallas.edu/~liebowit/keys1.html about qwerty vs Dvorak; and the version that was expanded into a book about Dvorak, Microsoft, and the internet http://www.amazon.com/Winners-Losers-Microsoft-Stan-Liebowit... .

ADDED: And Christensen in "Innovator's Dilemma" http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin... shows how slight improvements can gradually replace something that was originally better.

There is a book you might find illuminating: http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin... also, the essay "worse is better".

I totally agree. This is a classic example of an Innovator's Dilemma incremental improvement (i.e. what big slow companies are really good at)

http://www.amazon.com/Innovators-Dilemma-Revolutionary-Business-Essentials/dp/0060521996/ref=pd_bbs_1/102-9893482-5829762?ie=UTF8&s=books&qid=1176413849&sr=8-1