Henry Blodget: “Google’s current offerings–Gmail, Docs & Spreadsheets, etc.–bear all the markings of a classic disruptive technology. As Harvard professor Clayton Christensen observed, disruption begins when a dominant market leader has built so much functionality into its core products that it has begun to over-serve its core customers. Some of these customers, realizing that a simpler, cheaper product will do, abandon the old technology. At first, this does not concern the incumbent, as it maintains a chokehold on the highest margin business–the high-end customers who need most of that complicated functionality and support. But, gradually, as the lower end product gets better, and the incumbent is forced to migrate to even more complex and expensive solutions, more of the overall customer base defects. And, then, voila, one day the incumbent wakes up and discovers that it is DEC, Sears, or AOL…and by then it’s far too late to do anything about it.”