Disruptive technology

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A disruptive technology is a way of doing something that drastically changes the marketplace, usually by putting traditional providers of the same product or service at a severe financial disadvantage, either because the newer way of providing that service is cheaper, easier, or better in some fashion. Open source software had a disruptive effect on traditional software companies beginning in the 1990's; many companies had to change their way of doing business as a result. Likewise, Voice over Internet Protocol telephony has had a severe disruptive effect on traditional "landline" Public Switched Telephone Network companies. There are many other examples which can be found in the marketplace for computer- and internet-based technologies.

The term "greenfield" is sometimes used for situations where a disruptive technology is introduced as a completely new enterprise, which has no old systems to be disruptive, and may have an advantage of no obsolete investment. Greenfield companies, however, also have to compete for customers and finance, as well as creating infrastructure, so they have advantages as well as disadvantages.