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of people now access the Internet
via broadband connections. Worldwide, more than 5 billion people
use cell phones. Of those users, 1
billion have smartphones that provide them with instant access to the
Internet at all times from multiple
locations.
In addition, software programming tools and Internet-based services
allow companies in many industries
to launch new software-powered startups without investing in new
infrastructure or training new
employees. For example, in 2000, operating a basic Internet
application cost businesses approximately
$150,000 per month. Today, operating that same application in
Amazon's cloud (we discuss cloud
computing in detail in Technology Guide 3) costs about $1,000 per
month. In essence, software is disrupting every industry, and every
organization must prepare for this disruption.
Numerous companies have attempted to meet the disruption
challenge: Some have succeeded and some
have failed. Software Disruptions
Let's look at examples of software disruption across several
industries. Many of these examples focus on
two scenarios: (1) industries where software disrupted the previous
market-leading companies and (2)
industries where a new company (or companies) used software to
achieve a competitive advantage.
• The book industry:
A dramatic example of software disruption is the fate of Borders
bookstore. In 2001, Borders agreed
to hand over its online business to Amazon because the bookstore was
convinced that online book
sales were nonstrategic and unimportant. Ten years later, Borders
filed for bankruptcy. That same
year, the www.borders.com Web site was replaced with a redirect link
to the Barnes & Noble Web
site (www.bn.com). Then, in January 2012, Barnes & Noble
warned analysts that it would lose twice