A term coined by Harvard professor and businessman Clayton Christensen, this refers to the idea that successful, well-established companies sometimes fall behind their less-established competitors in the face of disruptive innovation. This happens when an established enterprise (incumbent) perceives that a next-generation product or innovation delivers little value to its customer base, at least at the early stages of adoption. When, at a later time, the innovation finally generates interest within the incumbent’s customer base, early-adopter competitors already have established a foothold in the market, putting the incumbent at a disadvantage.

In the context of the technology space, today’s channel is facing an Innovator’s Dilemma of sorts. Having been built to sell and support legacy products that are increasingly less valuable and costlier to deliver through conventional routes to market, the channel is at a crossroads as new technologies and business models come to light and cause widespread disruption. Both vendors and partners need to adapt while maintaining legacy revenue models.