In Technology Matters – Just Not At The Top Of Funnel, I argued that technology matters at the MOFU and BOFU stages of the sales funnel (though not at the TOFU stage).
In this post, I up the ante of this argument and posit that disruptions in B2B technology are caused by paradigm shifts in technology – and not JTBD, features or functionality.
For as long as I can remember, which is around 40 years,
- SAP is #1 ERP
- Oracle is #1 RDBMS
- Dell, HPE and IBM are the Top 3 IT Infra Vendors
in the world, and in every major individual market like USA, Germany, Japan, UK, and India.
To that extent, disruptions are rare in the B2B technology space.
But they’re not zero. I can think of at least two disruptions in B2B tech during these four decades:
- Salesforce
- Datadog
Both were caused by new technology paradigms rather than superior functionality.
1. Salesforce et al
When Salesforce CRM entered the market in the late 1990s, Customer Relationship Management was a mainstream enterprise applications product category, which was dominated by Siebel, Oracle and SAP.
Siebel was a pureplay CRM company whereas Oracle and SAP added CRM to their suite of onprem enterprise applications.
All the incumbents were Commercial Off The Shelf software, the only type of software in vogue at the time. COTS was licensed and installed on the customer’s infrastructure, ergo it was also called onprem software.
Salesforce CRM was hosted on the cloud and is widely regarded as the first ever SaaS software.
The first version of Salesforce was functionally inferior to the incumbent COTS CRM products. However, it outflanked the COTS incumbents with its cloud pedigree.
Salesforce coined the phrase “No Software” to project that its CRM was different. To a career software industry professional like me, this GTM messaging sounded misleading. Salesforce’s CRM was as much software as the CRM incumbents of the time, except that it did not require any downloads or installs as it was deployed on cloud infrastructure whereas Siebel, Oracle, and SAP CRM had to be downloaded and installed on onprem infrastructure.
Still the GTM worked. With its messaging around a paradigm shift in technology, Salesforce was able to dislodge the CRM incumbents and rise to the #1 spot in CRM, which is a positon that it continues to occupy even after 30 years.
Ditto Workday in the HRMS space.
I see a parallel with AI. The enterprise AI stack comprises infra, foundation model, scaffolding, harness, tooling, and applications. All of them are installed onprem or rented over the cloud. But AI postures to kill software, as though it’s not software! Furthermore, the largest AI company makes a bulk of its revenue from its $20/month/user subscription. But AI postures to kill seat-based pricing and follow outcome-based pricing!! Go Figure!!!
eBook hasn’t killed print book.
EV hasn’t killed ICE.
Fintech hasn’t killed Bank.
Digital Payment hasn’t killed Cash.
Crypto hasn’t killed Fiat.
But that hasn’t stopped the creation of trillions of dollars in value by spreading the propaganda that they will. #GoFigure.— SKR (@s_ketharaman) January 27, 2022
2. Datadog et al
IT Operations Management software has been around for over 35 years. The market leaders in the 1990s and 2000s were CA Unicenter, HP OpenView and IBM Tivoli. They were all onprem aka COTS software.
The advent of cloud brought with it a new crop of cloud native SaaS monitoring and observability tools like Datadog, Dynatrace, and Splunk. They rode the cloud boom to gain share of voice and of market in the product category.
While the incumbents absorbed their technologies into their modern observability products, they de-emphasized the legacy brands.
- CA Unicenter was broken down into separate product families such as CA Infrastructure Management, CA Service Desk, and so on. The Unicenter brand was diluted progressively. Then the company was acquired by Broadcom. After the acquisition, Broadcom focused heavily on large enterprise customers, many mid-market customers moved away, marketing around legacy ITOM products declined, some products were sunset or deprioritized, so the Unicenter brand visibility dropped significantly.
- HP OpenView was rebranded as HPE OneView and folded into HPE OpsRamp monitoring and observability suite of products.
- IBM repositioned its monitoring software into newer portfolios, de-emphasizing the Tivoli branding.
The onprem incumbents are still around but they’ve ceded much of the monitoring and observability ground to the new age cloud-based products.
It’s not only B2B technology.
There are other examples from allied industries of disruptions caused by paradigm shifts in technology:
- China EV. China was a nobody in ICE automobiles but has become #1 in EV
- Apple iPhone Smartphone. The first version of iPhone, launched in 2007, had many missing features that were standard in Nokia, the incumbent leader at the time e.g. no SMS Forwarding. But the iPhone rode the touchscreen paradigm shift to unseat Nokia.
A successful disruptor does not necessarily do a better job than the incumbent. It does a different job, which tends to render the incumbent irrelevant (or drastically diluted).
ATM automated the tasks of human tellers; mobile banking made them irrelevant. Paradigm Shift is what unlocks the latent power of a technology. https://t.co/lIRYNJMD40
— SKR (@s_ketharaman) April 5, 2026
Sometimes, the successful disruptor does not even know the incumbent’s job fully!
Reid H once said, had he known about credit card chargeback rules, they’d not have founded PayPal.
— SKR (@s_ketharaman) February 20, 2024
As you can see, in all the above examples, the new entrant leveraged a paradigm shift in technology to dislodge the incumbent leader. Not superior functionality.
That said, technology paradigm shift is no guarantee of disruption.
- SAP is still the #1 ERP (see footnote 1)
- Oracle is still the #1 RDBMS (see footnote 2).
The shift in technology paradigm from onprem to cloud has not succeeded in disrupting the ERP and RDBMS market leaders.
To that extent, technology paradigm shift is a necessary, though not sufficient, condition of disruption in the B2B technology space.
In closing, I’d be remiss if I didn’t bring up AI, arguably the greatest technology paradigm of modern times. One of the hottest questions in Silicon Valley is whether AI will disrupt SAAS. Wall Street and SaaSpocalypse Maxis think it will. SaaS Maxis think it won’t. According to my conspiracy theory, AI will kill point SAAS solutions but it will not seriously impact integrated SAAS suites. Time will tell…
FOOTNOTE(S):
- SAP sells both onprem and cloud versions of its latest SAP S4/HANA ERP product.
- a16z, a key investor in Databricks, envisages the startup to be the cloud-based disruptor of Oracle in the RDBMS space. Let’s see how that movie plays out.