Understanding Openness

The choice between closed versus open innovation is not always simple

Many, many years ago I gave a talk at the U.S. Federal Communications Commission. I remember nothing of that day except for a passing comment made by the speaker before me, a software pioneer. He said that the greatest achievement of the computer industry was not the personal computer but the concept of an open platform on which third parties could innovate, and that this open platform was what the telecom industry lacked.

I thought this was a silly thing to say. It had been easy enough for the computer industry to standardize the communications bus in a little steel box, but it would be quite another thing to create an open platform from a worldwide network made up of a myriad of different technologies. This would never happen.

A few years later I realized how wrong I had been. The speaker’s prescient comment had been made before the evolution of the Internet. A simple protocol—TCP/IP—had turned a vast network of networks into the virtual equivalent of a little steel box. Of course, regulatory and legal revolutions were also involved, but the end result was that users were enabled—and even incentivized—to innovate on the telecom network. And they did.

Still later I returned to Bell Labs as an alumnus to give a talk. “Once we controlled the network…,” I began. I looked out on the audience with nostalgia. The room was full of engineers and scientists, but this august assembly was a mere drop in the bucket compared to the millions upon millions of users who were now guiding the evolution of network services. Once we had thought this was our exclusive charter.

I was recalling this chain of events in the context of a discussion about the automotive industry, which is edging toward an open platform as cars become more and more like computers with wheels. Driving an open platform down the highway sounds a little scary, but maybe something similar could have been said about the telecom network, too.

Through the years I have attended and participated in many meetings and conferences devoted to innovation. It seems to me as if the subject is stuck in a do-while loop. Each year, speakers begin their presentations by observing that in the past we had not known how to cultivate innovation. Now, fortunately we do, each speaker will say, and then go on to describe a new organizational paradigm that is sure to increase innovation. Fast forward a year and repeat.

I think that innovation occurs quite naturally and would even be difficult to stop. I imagine an organization putting out an edict that innovation will no longer be tolerated; I can envision the engineers coming in at night and working on ideas quietly by candlelight.

Given that innovation occurs naturally, a sure way to increase innovation is to have more people involved and empowered to innovate, and this is the power of an open platform. However, there are both technical and economic risks involved. Chaos, lack of control, and market loss loom as possibilities. Sometimes it’s a choice between open and innovative and closed and profitable. In his book The Triumph of Ethernet (Stanford University Press, 2002), Urs von Burg also argues that when improvements to a technology can’t be made on an independent, modular basis but require interdependent, systematic changes, closed and proprietary approaches have the edge.

I sometimes wonder if today there are college courses on technology business strategy. When and how, and at what interface or levels, is it advisable to be open? There are many examples that can be studied, and it’s an interesting and important question.

Advertisement
Advertisement