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| 04.13.05
Geoffrey Moore: The Role Of Open Source Computing
 By Ross Mayfield
I'm a little bit of a late arriver at this party. Personally, a late adopter. You want to catch up when you are late, but I don't think sobriety is your strongest suit. Want to talk about what you look like to someone coming late to the open source cultural, personal and technical movement. And why are we where we are now?
What is open source anyway?
Non-proprietary product model, a value added services model (contributed, compensated), a community (self-organizing collaborative, repository of knowledge, forum for sharing best practices -- these dynamics simply work), an altruistic behavior (forgoes proprietary returns to extend reach to all, anti-Microsoft passion, cool hobby, great career development, useful to my job), a capitalistic tactic (put some technologies in the public domain in order to focus resources elsewhere for competitive advantage). As your customers and your customers customers start betting on the economic model they start to get their head around it.
Movement has gotten over competitive and manipulative responses, remarkably resilient. As a person interested in social organizations, strategy and power I'm paying a lot of attention to it.
Where is open source in the category adoption lifecycle (where the technology adoption lifecycle is an early subset, the innovator/early adopter part)? Early main street to mature mainstreet (indefinitely elastic middle period), declining main street to end of life. Linux is out of the chasm because Solaris is being marginalized, which had fought off NT, but can't fight both. Being a manager in the declining phase -- Antonio Perez's Kodak movement of digital photography requires he get in the game.
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Let's be honest, I have milked this model for the last 15 years. Where are we going to put these things on the model? He takes uses audience to place products.
Linux Server OS is passing through tornado.
Linux Client OS is in early adopter phase
Embedded Linux is in Early market
Firefox is in the chasm (this is progress, it means you have achieved a constituency in the early market and you need to appeal to new constituencies, some don't want to go there [e.g. plugin madness])
MySQL is in the Bowling Alley -- a persistent economic entity, which allows people to build out infrastructure on top if it
JBoss -- late market
Apache -- late market
Enterprise Consulting -- main street
Support Services -- main street
The Economic Significance: the Internet was a critical enabler to allow the collaborative behavior to happen. Developed company economies face competition, driving efficiency to sustain the unsustainable lifestyle.
Strategy 101: Competitive advantage is how you create returns above others.
Core: any process that contributes directly to sustainable differentiation leading to competitive advantage to target markets.
Context: All other processes required to fulfill commitments to one or more stakeholders.
Commoditization takes all the earnings of the industry down. Managing core and context is center stage. Core is what you choose to be different about. If you are Dominos, the Pizza is context, 30 minutes is core. If you are Chuck E Cheese the Pizza is context and the animals are core. Tiger Woods competitive capabilities are core, the rest is context -- focus on the game! What ever you have that is core, however, becomes context over time.
We are horrible at managing less differentiated goods. Scarce resources get tied up in context. Context build-up: what once made them great now leads to weakened competitive performance and lower returns on invested capital. Need more healthy processes to extract resources from the context to the core.
 Open source's most important role is to commodities context processes so people can extract them and re-purpose them for the core.
If you build collaboratively, instead of having 1000's of peopled doing competitively -- you can share the burden. That's right share -- say it. Context means you want less context, not more. It minimizes differentiation (a good thing) to reduce risk and lower costs. Provide flexible APIs that offer clean interfaces to a context abstraction layer and support value-adding differentiation atop context. With the net, we have a fast enough backplane to do this.
From computing is free to memory is free to now the bus is free. It changes the economic game, particularly for services businesses. We have gotten a lot of productivity out of other industries, save services. Collaboration extracts productivity from people processes. ATM machines are a perfect example -- and they provide great service! How much contextual tripping complexity snafus of tech have we had, and now through pooling and taking context off of our plate, things can be more efficient.
However, the biggest challenge is mission-critical risk. 2x2 grid: mission critical to enabling vs. context to core. The problem is the high risk context and mission critical area. Where you can't get margin to fund risk management (e.g. the Airline industry is a horrible business to be in, has never returned its cost of capital over any 5 year period). How do we extract risk from this quadrant? De-risk these processes to find lower cost ways of managing them. Five levers:
Read the Rest of the Article.
About the Author:
Ross Mayfield is CEO and co-founder of Socialtext, an emerging provider of Enterprise Social Software that dramatically increases group productivity and develops a group memory.
He also writes Ross Mayfield's Weblog which focuses on markets, technology and musings.
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