Researchers at the Australian biotech institute CAMBIA worry that patents owned by multinational firms such as Monsanto are compromising billions of people who can't afford the licensing fees to exploit genetically modified crops. So CAMBIA researchers who are working on solutions to the challenges of food security and agricultural productivity release their results publicly under BiOS (Biological Open Source Licenses). This way they engage a much wider pool of talented scientists in the process of getting solutions to farmers who need them.
Marketocracy employs a similar form of peering in a mutual fund that harnesses the collective intelligence of the investment community. It has recruited seventy thousand traders to manage virtual stock portfolios in a competition to become the best investors. Marketocracy indexes the top one hundred performers, and their trading strategies are emulated in a mutual fund that consistently outperforms the S&P 500. Though not strictly open source, it is an example of how meritocratic, peer-to-peer models are reeping into an industry where conventional wisdom favors the lone superstar stock adviser.
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Coase argued that there were good reasons for the seemingly contradictory structure of the vertically integrated corporation. One of the main reasons has to do with the cost of information. Producing a loaf of bread, assembling a car, or running a hospital emergency room involve steps where close cooperation and common purpose are essential to producing a useful product. In day-to-day practice it was not practical to break down manufacturing and other business processes into a series of separately negotiated transactions. Each transaction would incur costs that would outweigh whatever savings were achieved by competitive pressures.
First, there would be search costs, such as finding different suppliers and determining if their goods were appropriate. Second, there would be contracting costs, such as negotiating the price and contract conditions. Third, there would be coordination costs of meshing the different products and processes. Coase called these "transaction costs." And the upshot was that most corporations concluded it made the most sense to perform as many functions as possible in-house.
All this leads to what we and our colleagues call "Coase's law": A firm will tend to expand until the costs of organizing an extra transaction within the firm become equal to the costs of carrying out the same transaction on the open market. As long as it is cheaper to perform a transaction inside your firm, keep it there. But if it is cheaper to go to the marketplace, do not try to do it internally.
How has the Internet affected Coase's law? Strictly speaking, the law remains as valid as ever. But the Internet has caused transaction costs to plunge so steeply that it has become much more useful to read Coas&s law; in effect, backward: Nowadays firms should shrink until the cost of performing a transaction internally no longer exceeds the cost of performing it externally. Transaction costs still exist, but now they're often more onerous in corporations than in the marketplace.
Take another look at Coase's three kinds of collaboration costs. Henry Ford and Alfred P. Sloan had to physically seek out promising suppliers, inspect their factories, and haggle over prices. In most cases, the costs of sourcing external suppliers were so high that ownership of production processes across the automotive value chain was warranted, even if individual links were thereby shielded from market disciplines. Ford Motor's infamous River Rouge plant, which drew raw rubber and steel into one end and pushed finished cars out the other, was the quintessential example of this. Today's automotive firms type "axle" or "window glass" into any number of industry exchanges, and negotiate the price on the Web. If they want, they can check a supplier's trustworthiness-just scan through the treasure trove of analytic services available online.
How about contracting and coordination costs? Need steel from China, rubber from Malaysia, or glass from Wichita, Kansas? No problem. Online clearinghouses for each of these products enable purchasers to contract for price, quality, and delivery dates with a few clicks of a mouse. An executive can even track each shipment on a virtual map that shows its precise location at any point in the journey.
Coase's law, which once provided such a neat explanation for the development of the gigantic corporation, now explains why traditional corporations are finding themselves thrust aside by an entirely new kind of business entity.
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"Open source is about knocking down those walls," says Polese, "and about actively seeking ways from the very beginning to make your software work better with everybody else's software. This is opening up a huge new wave of innovation, and software is getting much better at an accelerated rate. There are more people pounding on it, more people using it, more people participating in creating it, and more emphasis on collaboration and integration."
As for making money, well, its all about adding value. Polese says, "You keep your customers happy by offering better maintenance and support. You offer interoperability with other software applications. And you're always adding on, you're making it better and better over time."
Can proprietary software vendors see the writing on the wall? We sure hope so. Proprietary software spells rapid obsolescence if these companies don't find a way to coexist with the peer producers.
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InnoCentive works a little bit like eBay. Companies-or "seekers"anonymously post R&D problems on the limoCentive 'Web site, while "solvers" submit their solutions in a bid to capture cash prizes ranging from $5,000 to $100,000. InnoCentive chairman Darren Carroll says, "breaking down traditional laboratory doors and opening up an excxung new frontier where solution seekers-well-respected global corporationscan reach beyond their traditional R&D facilities and tap into more of the brightest scientific minds in the world."
The promise for seekers is that a large, diverse network of talent will solve well-defined problems faster and more efficiently than an internal R&D group. Indeed, InnoCentive solvers have been known to yield surprising results that lead companies down paths they would never have considered. CEO AIf Bingham says its a property of making the problem accessible to many, many minds: "It produces a diversity of thought about the problem that can often make the solution rather unique."
InnoCentive is just one example of a growing number of real businesses on the verge of exploding into vibrant virtual marketplaces. NineSigma, lnnovationXchange Network, Eureka Medical, YourEncore, and Innovation Relay Centers offer similar services. The aptly named YourEncore, for example, works much like InnoCentive, except it explicitly recruits retired scientists like Werner Mueller who are looking for some new challenges to pass the time.
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Questions in need of solutions are just that: unanswered problems, queries, or uncertainties that-for reasons related to cost, timing, or lack of expertise-have not been addressed internally. We'll talk about these ideagoras in the next section.
The online technology transfer marketplace yet2.com started out as the former type of ideagora: a place where companies could post underutilized assets they were seeking to license externally. It was founded in 1999 as one of the first marketplaces of its kind. CEO Phil Stern explains that the idea arose as early supporters such as Boeing, DuPont, Honeywell, and Procter & Gamble all reported the same dilemma: They were sitting on mountains of intellectual property that they weren't using internally and looking for ways of monetizing it.
For Procter & Gamble the prospect of listing underutilized assets with yet2.com presented a potential windfall. The consumer products giant is the proud owner of over 27,000 U.S. patents. It would be even prouder, however, if more of these patents were fattening the bottom line instead of its legal costs.
In the late 1990s P&G launched an internal survey and discovered it was spending $1.5 billion on R&D, generating lots of patents, but using less than 10 percent of them in its own products. Yes, that's less than 10 percent! It's a figure that few companies admit to publicly, but Stem figures that this troubling statistic is broadly representative of the state of play in many research-intensive industries.
When the survey results hit Lafiey's desk, they triggered a dramatic change in philosophy. Lafiey saw it as a wake-up call and led the charge to open up the patent portfolio. The company, once renowned for its insularity, now sees external marketplaces for technology as one key pillar of its innovation strategy. P&G now makes every patent in its portfolio available for license to any outsider, as long as it has existed for at least five years or has been in use in a P&G product for at least three years. This keeps everybody on their toes.and encourages employees to constantly replenish the company's stock of IP. And by sending the licensing revenue back to the business units, the strategy provides additional incentives for innovation.
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Customer Co-Innovation Goes Self-Serve
David Pescovitz, senior editor for Make (a magazine and blog devoted to the do-it-yourself [DIY] innovation scene), says the D1Y phenomenon is exploding with prosumer communities that have formed around products ranging from the Toyota Prius to the Apple iPod: "Communities are forming every day in part because the technology enables it." There is no need for users to innovate in isolation or wait for the next monthly amateur electronics meeting to share their customized wares. Pescovitz also
highlights the allure of prestige and the sense of social belonging that develops within prosumer communities. "People get big thrills from hacking a product, making something unique, showing it to their friends, and having other people adopt their ideas," he said.
Even Hollywood is getting involved. The 2006 cult movie Snakes on a Plane engaged its audience in many aspects of the film ranging from scripting to marketing. Fans of star Samuel L. Jackson convinced the producers to insert lines into the dialogue and could create a custom and personahzed voice message from Jackson to send to their friends. This inspired one blogger to proclaim that we're seeing a shift from "heard the ad, seen the movie, bought the video, got the T-shirt, got the fridge magnet"; to "ere ated the ad (co-) shot the movie, mashed the video, designed the T-shirt, made the fridge magnet."7
One of the earliest, and still most vibrant, prosumer communities has formed around Lego products. Lego itself has become a flagship for how to get your customers deeply involved in cocreating and co-innovating products. Though Lego is perhaps best known for making little interlocking plastic bricks, the company is increasingly focusing on high-tech toys. With Lego Mindstorms, for example, users build real robots out of programmable bricks that can be turned into two-legged walking machines, or into just about anything a teenage mind can envision. When the product first made its debut in 1998, marketing officials were surprised to discover that the robotic toys were popular not only with teenagers but with adult hobbyists eager to improve on them.
Within three weeks of its release, user groups had sprung up and tinkerers had reverse engineered and reprogrammed the sensors, motors, and controller devices at the heart of the Mindstorms robotic system. When users sent their suggestions to Lego, the company initially threatened lawsuits. When users rebelled, Lego finally came around, and ultimately incorporated user ideas. It even wrote a "right to hack" into the Mindstorms software license, giving hobbyists explicit permission to let their imaginations run wild.
Today Lego uses mindstorms.lego.com to encourage tinkering with its software. The Web site offers a free, downloadable software development kit; Legos customers in turn use the site to post descriptions of their Mindstorms creations-and the software code, programming instructions, and Lego parts that the devices require. Indeed, Mindstonns enthusiasts are notoriously ambitious. At Lego World 2005 in the Netherlands, one participant revealed a full-size, fully functional pinball machine made from twenty thousand Lego blocks and thirteen programmable microchips.
The company benefits hugely from the work of this volunteer business web. Each time a customer posts a new application for Mindstorms, the toy becomes more valuable. Lego senior vice president Mads Nipper calls it "a totally different business paradigm." "Although users don't get paid for it," he says, "they enhance the experience you can have with the basic Mindstorms set-it'd a great way to make the product more exciting." We've always thought that Lego ought to make its most passionate devotees part of its design department. And when it came time to develop a new version of Mindstorms, NXT, in 2005, that's exactly what the company did, by taking four of its most prolific users on as de facto employees for the eleven-month development cycle.
The Mindstorms experience has proven to be so successful that Lego has transferred its customer-centric development practices to its more conventional Lego brick toys with a service that lets customers design their own custom Lego sets. Users no longer need adhere to the tyranny of Lego's predesigned kits. With the new Lego Factory system launched in 2005, customers get access to a virtual warehouse of Lego elements with which to design, share, and purchase custom models.
It's a bit like open source Lego: Simply download the free 3-D modeling program that lets you design your virtual toy, using as many bricks as you want. Upload your Mona Lisa to Legos Web site and you-and any other Lego fan-can order the kit for your creation, complete with assembly instructions.
Sounds obvious when you think about it, and yet Legos fusion of mass customization and peer production remains rare enough in today's consumer products market to make the idea particularly outstanding. Customers can make whatever they want, and Lego transforms its legion of youthful customers into a decentrallzed virtual design team that invents and swaps new Lego models. Mark Hansen, director of Lego Interactive Experiences, says, "With Lego Factory we can expand beyond our one hundred in-house product designers to marvel at the creativity of more than three hundred thousand designers worldwide." Indeed, with the Lego Factory and Mindstorms combined, the company has moved far beyond customercentricity to harness a full-fledged prosumer community that will help ensure that Lego remains a vibrant source of innovation for many years to come.
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A recent 'poll asked media executives for ideas as to how big media firms could respond to the new "threats" posed by user-generated content. Their responses read like a prosumption playbook.
Suggestions included:
• Give users access to raw content such as interviews as a means of providing greater transparency and accountability.
• Provide tools and become a platform for user-generated rather than firm-generated content.
• Redesign all content to be a conversation rather than a corporate monologue.
• Treat advertising as content too.
• Use new distribution forms, including peer-to-peer networks.
• Adapt content forms and schedules to user demands.
Actions speak louder than words, however, and few of these ideas have been championed. A continued lack of rqsponsiveness will be their ultimate downfall. Media organizations that fail to see the writing on the wall will be bypassed by a new generation of media-savvy prosumers who increasingly trust the insights of their peers over the authority of CNN or the Wall Street Journal.
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Of course, as authors and business people we recognize that rewarding creativity and investment is central to promoting innovation. In theory, intellectual property law exists to do just that. But expansion in the law's breadth, scope, and term over the last thirty years has resulted in an intellectual property regime that is radically out of line with modern technological, economic, and social realities. This threatens the chain of creativity and innovation on which we (and future generations) depend.
In today's economy we need an intellectual property system that rewards invention and encourages openness-one that fuels private enterprise and sustains the public domain. The existing intellectual property system isn't working as well as it could.
Increasingly vocal critics argue that our knowledge economy has become overprivatized. Scholars such as James Boyle and Lawrence Lessig point out that in recent decades intellectual property rights have been consistently strengthened, while the public domain has become dangerously constricted. These voices need to be heard.
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director of eGovernment for the office of the secretary of state Rhode Island, recently observed, 'It is simply unacceptable at this point in history that a citizen can use Web services to track the movies he is renting, the weather around his house, and the books he's recently purchased but cannot as easily monitor data regarding the quality of his drinking water, legislation, or regulations that will directly impact his work or personal life, what contracts are currently available to bid on for
his state, or what crimes have recently occurred on his street."
He's right. Government agencies are one of the largest sources of public data, and yet most of it goes completely unutiuized, when it could provide a platform for countless new public services. Both the private sector and advocacy groups like Greenpeace are much farther ahead in using new technologies to disseminate and leverage information to empower their operations.
Secretary Brown believes that the gap can be closed. Under his leadership, the state of Rhode Island recently began publishing large amounts of government data via an API that is easy to hack. Brown hopes his GovTracker application will at least bring Rhode Island a step closer toward an era of community-developed applications that will make it as easy for citizens to interact with their government as it is for them to interact with the rest of the networked world.
The truth is that the best uses of public data are often made by organizations in the nonprofit sector that are free of the political considerations that hamstring governnient agencies. Governments should move faster to create new platforms for participation and public knowledge. A good start would be making more public information accessible to people and organizations that could put it to productive uses. In the meantime there are a number of great examples for government officials to draw from.
Scorecard, for example, might just be the mother of all mashups. The Environmental Defense Fund (EDF) launched the application in 1998 (that's right, a full seven years before the term Web 2.0 was even invented) to aggregate hundreds of sources of public data to create a powerful nationwide tool for assessing environmental risks. Then there's Neighborhood Knowledge California (NXCA), an ingenious tool that harnesses public data to help citizens and policy makers spot and improve troubled
neighborhoods. It was created by researchers at UCLA who joined up with community groups in Los Angeles to empower low-income neighborhoods like Vernon-Central to reclaim and rebuild their neighborhoods.
These and other strategies should become part of a more concerted effort by governments to explore and leverage new forms of value from public information. To some extent, the sophistication of these efforts gives even the most dyed-in-the-wool Web 2.0 aficionados something to learn. For a window into these insights, let's look at Scorecard and NKCA in turn.
Platforms for Public Disclosure
One look at Scorecard and its easy to see why it's every industrial polluter's worst nightmare. But to fully appreciate the significance of Scorecard, its worth briefly retracing its history. The story begins with a tragedy in Bhopal, India, where a chemical explosion in a Union Carbide plant in 1984 killed over 3,500 people and acutely injured tens of thousands of others. As public awareness of the dangers posed by toxic chemicals grew-spurred by domestic events like Love Canal-policy makers came under intense pressure to protect the American public from a similar public-health disaster. Community leaders from across the country became increasingly vocal in demanding access to information about nearby environmental hazards.
In 1985, members of the U.S. Congress responded with a bold new plan to inform the public and put the spotlight on polluters. They drafted the Emergency Planning & Community Right to Know Act, which contained a provision called the Toxic Release Inventory (TRI) that empowered the Environmental Protection Agency (EPA) to collect emissions levels on 328 deadly chemicals in use in commerce. With considerable foresight, Congress required the TEl data to be made available to citizens via computers (of course there was no public Internet then).
The bill met furious opposition from industry, and even from some EPA officials, but narrowly passed. The first report, released in 1989, showed that billions of tons of toxic waste were being released into the environment. Observers credit this report with spurring the chemical industy to intensify the search for low-pollution technologies.
Around the same time, environmental groups were gaining valuable new ammunition to deploy in their war against industrial polluters. Geographic information systems (GIS), Web, and computer simulations, for example, gave them the ability to collect, manage, and distribute large volumes of environmental data in a way that only elite government agencies could manage in the past. When the Internet came online in the early 1990s, it provided everyday citizens with the most powerful platform ever to find out, inform others, and organize.
Environmental groups soon recognized the enormous power of the Intemet and began building Web-enabled systems to harness the TEL. Of the many that have emerged, Environmental Defense Fund's Scorecard is by far the most sophisticated. Scorecard combines data from over four hundred different scientific and government databases to profile local environmental problems and the health effects of toxic chemicals, making it one of the most advanced sites on the Web in terms of informatics.
Visitors to the site can type in their zip code and get instant access to a wealth of information about pollution sources in their region. Want to know, for example, which company is the biggest source of air pollution in the state of California? Scorecard's database says itsi an ExxonMobil refinery located at 3 700 West 190 Street, in Torrance, California, with an annual release of 1,659,872 pounds of toxic stew. Or perhaps, as you plan that next real estate purchase, you care to avoid the country's most polluted communities. Scorecard says you better sidestep Humboldt Count» Nevada, where a staggering 350 million pounds of carcinogens are released annually.
It took more than a year to develop Scorecard, with more than a million dollars worth of programming time-much of it donated. Its iinmediate popularity surprised the EDF-the site received more than a million hits in its first two days in April 1998. Today interested users can access Scorecard from over five thousand community portals, municipal Web sites, real estate brokers, and the homepages of countless environmental organizations.
Scorecard's strengths lie in its powerful but highly accessible interface to complex datasets. One innovative application, called the Pollution Lo-
cator, harnesses a Web-based map server to generate environmental data charts dynamically, as the user's cursor crosses geographic areas. Users can zoom out to compare data between counties or states, or zoom in to examine neighborhood environmental problems at the street level.
PLATFORMS FOR PARTICIPATION
The creators of Scorecard built an easy-to-use tutorial that steers users to information about environmental hazards in their community. The site offers lay explanations about each type of pollutant it tracks and their associated health effects-turning raw information from TRI and other sources into practical knowledge. Visitors to the site can also personalize the way Scorecard displays information, and send e-mails and faxes directly to polluters. For those inclined to organize communitywide action, it has an online forum where concerned citizens post questions, give advice, find other concerned people in their community, and network with those who have had similar experiences. A list of polluters even includes the plant supervisor's phone number.
Platforms for Neighborhood Knowledge
While Scorecard is largely about naming and shaming polluters, Neighborhood Knowledge California (NKCA) is empowering residents to improve their communities. The cornerstone of the project is an online tool that provides easy access to a vast collection of public data about properties and neighborhoods facing urban decay. Here's the dilemma. Spotted early enough, a community's decay could be reversed through a combination of well-targeted public programs and private sector investment. But although the danger signals are all on public record, they are effectively inaccessible to the public, buried deep within the bowels of city hall. NKCA illustrates what can be done when simple Web-based tools transform raw public data into formats that are meaningful and useful to community residents and local-government policy makers.
The NKCA project integrates databases containing information about public (city, county, state, federal) and private (i.e., investment, toxic release notices) activities that can be tracked at the neighborhood level to develop an interactive Neighborhood Electronic Monitoring System (NEMS). NKCA's evolving information system uses a mapping interface to plot near real-time information on city maps posted on the Web site. Rather than having to look at each database separately, public officials, citizens, and businesses can search by zip code or other parameters to view comprehensive information on one property, or see at a glance which communities might be headed for trouble.
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Blogger and media consultant Jeff Jarvis (who we first met in Chapter 5), points out that even a simple act of consumption in this new world is now an act of creation. Acts like searching on Google, tagging bookmarks with del.icio.us, and sharing photos on ffickr all have private benefits, but these acts create collective benefits as well. These collective benefits yield a richer Web experience and enhance "the wisdom of crowds." This new wisdom, says Jarvis, can be useful in helping people discover content, in organizing the Web around topics, in improving search results, and even in improving ad performance.1°
"So who owns that collected wisdom of the crowd?" asks Jarvis.
Obviously, the crowd does. Platforms like Googlc, Technorati, and Yahoo (including their new subsidiaries fiickr and del.icio.us) merely borrow it. And they can only borrow it, says Jarvis, "if they continue to have the trust of the crowd and if they pay dividends back to that crowd. And those who try too hard to control that wisdom, to limit its use and the sharing of it. . . risk turning away the crowd that creates this value. "
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Share the costs and risks
Sharing the risk of large development projects with partners spreads the cost and ensures that everyone is properly motivated. Boeing got this right by asking suppliers to share the up-front financial burden of developing the 787 Dreamliner. In return for sharing risk, Boeing's partners share in the upside. Cost savings all around make sure that everyone makes money.
As companies share costs and risks they should be prepared to share decision making as well. In the past, Boeing gave orders like a drill sergeant, and suppliers complied. Rarely did it matter if the supplier had a better idea-Boeing wanted the components built exactly as specified. This time, Boeing has given all its major partners a vote on matters that affect them. Engineers from Japan, Italy, and elsewhere are stationed in Seattle and participate in top-level decision making. Others routinely hook up via teleconference from around the world. Boeing and its partners are reaping the benefits as they work together on solutions and adapt the plan as needed to realize unexpected efficiencies.
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When Robert Stephens graduated from the University of Minnesota with a degree in computer science in 1994 he wanted to start a business consultancy. The problem was that good consultants cost a lot of money to hire, and Stephens had little, so he went into computer repair
instead.
Stephens recognized early in his venture that the do-it-yourself crowd is a dying breed. From coping with the annoyance of computer viruses and spyware to the trauma of setting up a home network, a growing number of consumers trade cash for peace of mind by having a technician do the job. Stephens's answer to this consumer desire was Geek Squad, a cheekily branded service company that helps consumers navigate the increasing complexity of electronic gadgetry.
From very humble origins, Geek Squad grew and grew. Then, in 2002, the company was acquired by consumer electronics giant Best Buy after nearly a decade of profitable operations. Stephens had 60 employees at the time, and was booking $3 million in annual revenue. Today Geek Squad has grown to 12,000 service agents, and under Best Buy's umbrella the division clocks nearly $1 billion in services from over 700 locations across North America, and returns $280 million to Best Buy's bottom line.
At age thirty-seven, Stephens is now leading the company in a bold effort to move Best Buy away from products and into services. Best Buy anticipates high-double-digit Geck Squad revenue growth in 2007 as the service offering benefits from volume and scale. CEO Brad Anderson describes Stephens's impact as huge, and says, "Robert Stephens has been at the heart of our service culture that we're building across our company."
Stephens is also teaching the old guard a thing or two about &w to use the new universe of collaborative technologies to get the most out of Best Buy's employees. Geek Squad employees use wikis, video games, and all kinds of unorthodox collaboration technologies to brainstorm new ideas, manage projects, swap service tips, and socialize with their peers. They even contribute to product innovation and marketing. And all this makes Geek Squad a great place to work, and contributes to its stellar service record.
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War on the Open Internet
When it comes to the Internet, Hollywood and many telecommunications companies are brethren-they both face the innovator's dilemma, and they both see the Internet as a wild beast that needs to be tamed.
Telecommunications is in a state of disarray. In a world of free Internet telephony a major source of revenue is set to disappear altogether. Upstarts like Skype are ascendant, and though landlines will not disappear overnight, the writing is on the wall. Telephony will be free. It's just a matter of time.- -
Telecommunications companies are understandably remiss to hasten the transition by offering free phone service in an attempt to wipe out Skype. But failing to do so could mean losing the ability to compete with Skype in the future. Skype already operates at a mere fraction of the cost of a traditional telecommunications carrier.
There is no doubt a strong hint.of irony when the very baby that telecommunications firms like AT&T helped to birth is now a source of great pain and upheaval. Like the media industries, telecommunications firms face a genuine business problem. They need to recoup their investments in maintaining and upgrading the telecommunications infrastructure. But with free services cutting into their revenue they have deemed the service fees they charge consumers and businesses for Internet connections too paltry by way of compensation: So they want to create a tiered Internet with different levels of service akin to first class, business, and coach.
William Smith, chief technology officer of BellSouth, has already proposed to charge fees in exchange for giving one Web vendor's traffic priority over the traffic of a competitor. If Yahoo pays the freight, BellSouth users will find Yahoo's search engine works faster and better than Google's. So, in effect, BellSouth becomes a gatekeeper for the types of services that will thrive on the Internet-an Internet where bandwidth and content-delivery tights are auctioned off to the highest bidders.
This poses a grave threat to the Internet-a threat that could extinguish the fire of innovation that has spurred countless new businesses, including most of the examples discussed in this book. This is not just a war against the open Internet; its a war against economic development, a war against competitiveness, and a war against innovation. In short, its a war against the future.
Internet pioneer Vint Cerf reminds us that the remarkable social impact and economic success of the Internet is in many ways directly attributable to the architectural characteristics that were part of its design. The three golden rules-nobody owns it, everybody uses it, and anybody can add services to it-are what distinguish the Internet from any previous communications medium.
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Not every company wants to be an open platform and not every company should be. Apple doesn't want to open up the iPod. It's fighting the French government, which has launched a legal challenge to force Apple to make music purchased from iTune's competitors playable on the iPod. The French fear that a Microsoftlike monopoly is in the making, while Apple argues that it shouldn't be compelled to open the playing field to competitors. Opening the platform to customer innovation, on the other hand, could create more value for all customers and further enhance the versatility and popularity of the iPod. Perhaps then opening the playing field wouldn't be so threatening, and both the French and Apple would be happy.
It goes to show, in any case, that openness isn't easy either. Think back to what Shai Agassi, SAP's president of product and technology group, said about their decision to open up thirty thousand APIs to its enterprisesoftware platform: "It's almost like you're taking down your borders and opening up for no tariffs, no tax competition. You need to know that your core assets and your skill sets allow you to continue to innovate fast enough as a corporation."
Thanks for your mention on InnoCentive. I wanted to suggest one factual corrections if I may. You quoted Alph Bingham. He is a Founding Member and member of the Board, but he is not the CEO. Our current CEO is Dwayne Spradlin.
Regards
Liz Moise
Marketing Manager
InnoCentive
Scritto da: Liz Moise | 28/07/08 a 17:58
Thanks for your comment. I just quoted an excerpt from Wikinomics..
Scritto da: Stefano Quintarelli | 28/07/08 a 18:17