Transcript Open Standards, Open Source, and Open Innovation

Firm Strategies for Open Standards,
Open Source, and Open Innovation
Joel West
www.JoelWest.org/openblog
Designing Cyberinfrastructure for Collaboration and Innovation
National Academies, Washington, DC, January 29, 2007
Lens: A Firm’s Business Model
Firms need a business model to support
innovation:
Value creation
Value capture
Value network
Openness is a tension of value capture
vs. value creation across value network
Typical IT Value Network
aka “business ecosystem”
Innovator
Technology
Component
Integrator
Users
Systems
Adoption
Component
Complements
Component Rival
Complement Provider
Contrasting 3 “Open” Strategies
Open standards
Open source
Open innovation
When firms are involved, these are
neither fully open nor fully proprietary
Open Standards
Two ways to measure openness
Process openness
Open meetings, transparent voting …
But firms steer standards to overlap IP
Market outcomes
Buyers want multivendor competition
Hope for lower prices, avoid lock-in rents
Standards Rarely 100% Open
Standardization must be paid for
Subsidy by SSO or by participants
Various ways to capture value
Increasing conflict over IPR & standards
Firms jointly maximize creating vs.
capturing value (Simcoe 2006)
Policies starting to fail (e.g. RAND)
Open Source
Unpack “open source” to 3 dimensions:
Intellectual property policy
Virtual distributed collaboration
Community governance
Considerable variance: community,
consortia, sponsored; also gated
Role of Firms in Open Source
Firm resources majority of key projects
Some sponsor & control OSS, using it as
price discrimination
Others contributed to produce shared
goods, capturing value in other ways
Transparency is easy
Surrendering control is hard
What’s “Open” About OI?
Open Innovation: antonym see vertical integration
Innovation spanning firm boundaries
Not about shared public goods
Value capture motive is explicit
Share value creation within value network
Provides for new forms of shared R&D
What Do These “Open” Share?
Collaboration in providing shared output
May be a complex system sold a la carte
Often firms “competing on a common
platform” (O’Mahony 2005)
Not necessarily a public good
Openness aligns firm interests
Provides external check on opportunism?
Openness Attracts Participation
Brings in potential contributors
Adopters/users
Complementors & rest of network
OSS licenses are existence proof
IP license provides a credible commitment
“Open” Infrastructure
Open is best choice for commodity, nonappropriable technologies
Shared implementations reduce
redundant investment
How do you partition it?
One firm’s infrastructure is another’s core
business
Let’s Not Ignore the “P” Word
Open is not just about public goods
Profit is without honor (except to owners)
Open parts allow selling closed parts
Sometimes cross-subsidies less obvious
IBM Global Services welcomes complexity
Participation is market signal
Firm Strategies for Open Standards,
Open Source, and Open Innovation
Joel West
www.JoelWest.org/openblog
Designing Cyberinfrastructure for Collaboration and Innovation
National Academies, Washington, DC, January 29, 2007