Contrary to common beliefs about the picket-fence approach, a good patent portfolio doesn't really protect a technology. In business terms (see below), the technology doesn't matter. Instead, patents enable the portfolio holder to screw up create intolerable risks for the competition's business model.

What disrupts incumbent firms in Christensen's story is not their inability to conceive of the disruptive technology: like Amit and Zott, he identifies the root of the tension in disruptive innovation as the conflict between the business model already established for the existing technology, and that which may be required to exploit the emerging, disruptive technology. Typically, the gross margins for the emerging one are initially far below those of the established technology. The end customers may differ, as may the necessary distribution channels. As the firm allocates its capital to the most profitable uses, the established technology will be disproportionately favored and the disruptive technology starved of resources. Christensen quotes Andy Grove, former CEO of Intel, ‘Disruptive technologies is a misnomer. What it is, is trivial technology that screws up your business model’. The root of tension [is] the conflict between the business model established for the existing technology, and that required to exploit the emerging, disruptive technology.

Henry Chesbrough, Business Model Innovation: Opportunities and Barriers, Long Range Planning, Volume 43, Issues 2-3, Business Models, April-June 2010, Pages 354-363, ISSN 0024-6301, DOI: 10.1016/j.lrp.2009.07.010.
(http://www.sciencedirect.com/science/article/B6V6K-4X0MPJN-2/2/06b7077564ed4d7c6266cafac731df5d)

tags: technology, competition, system, business, model, control point, risk, quote, innovation,