When the level of technological progress is far above what customers actually need and can use, the phenomena of overshooting creates the opportunity for an upstart to come in with something that's cheaper, simpler and good enough for a set of customers who don't need the advanced functionalities," said Christensen. He terms this trend "disruptive innovation".

He believes once the market entrant takes root in the low-end market, it can then improve on the product and take away market share, or in some cases even kill the leader when it marches upwards.

Q: Which IT companies are nearing the end of the growth curve, leaving them open to disruption?

A: In the computer world, these victims can be plotted in succession. Silicon Graphics (SGI) is the first. In the 90s, they were just the darling of Silicon Valley. They have improved to such a point there just weren't any more complicated problems out there for them to solve.

Hewlett-Packard (HP) is next. HP has a US$14 billion enterprise server business and this has about hit the ceiling with no growth above them. This is followed by Sun Microsystems. Sun's machines at any given point in time aren't as good as SGI's and HP's. There's no volume for them any more. Dell is coming up underneath Sun but they have a bit of headroom left.