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Firm Strategies for Open Standards, Open Source, and Open Innovation

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Role of Firms in Open Source. Firm resources majority of key projects ... Open Source, and Open Innovation. Joel West. www.JoelWest.org/openblog ... – PowerPoint PPT presentation

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Title: Firm Strategies for Open Standards, Open Source, and Open Innovation


1
Firm Strategies for Open Standards,Open Source,
and Open Innovation
  • Joel West
  • www.JoelWest.org/openblog
  • Designing Cyberinfrastructure for Collaboration
    and InnovationNational Academies, Washington,
    DC, January 29, 2007

2
Lens A Firms 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

3
Typical IT Value Network
aka business ecosystem
Integrator
Users
Innovator
Component
Systems
Adoption
Technology
Complements
Component
Complement Provider
Component Rival
4
Contrasting 3 Open Strategies
  • Open standards
  • Open source
  • Open innovation
  • When firms are involved, these are neither fully
    open nor fully proprietary

5
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

6
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)

7
Open Source
  • Unpack open source to 3 dimensions
  • Intellectual property policy
  • Virtual distributed collaboration
  • Community governance
  • Considerable variance community, consortia,
    sponsored also gated

8
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

9
Whats 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 RD

10
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
    (OMahony 2005)
  • Not necessarily a public good
  • Openness aligns firm interests
  • Provides external check on opportunism?

11
Openness Attracts Participation
  • Brings in potential contributors
  • Adopters/users
  • Complementors rest of network
  • OSS licenses are existence proof
  • IP license provides a credible commitment

12
Open Infrastructure
  • Open is best choice for commodity,
    non-appropriable technologies
  • Shared implementations reduce redundant
    investment
  • How do you partition it?
  • One firms infrastructure is anothers core
    business

13
Lets 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

14
Firm Strategies for Open Standards,Open Source,
and Open Innovation
  • Joel West
  • www.JoelWest.org/openblog
  • Designing Cyberinfrastructure for Collaboration
    and InnovationNational Academies, Washington,
    DC, January 29, 2007
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