Sunday, March 05, 2006

Flat is the new open.

I've had Thomas Friedman's book The World is Flat on my bookshelf for almost a year, now. I buy more business books than I read. This one has gotten some very good reviews, though, and I liked Friedman's earlier The Lexus and the Olive Tree an awful lot. I finally got around to reading it this week, and am sorry I waited so long.

There are a few general business books that have swept Silicon Valley over the last years. Shapiro and Varian's Information Rules was one, and Christensen's The Innovator's Dilemma was another. If you're an investor or an entrepreneur in technology these days, you've probably read these. You should add The World is Flat to the list.

Friedman's case is simple to state, and his book argues it compellingly. Technology and economics are eliminating barriers around the world. It is easy to collaborate with people today, no matter where they are. Broadband networking makes it possible to send clerical, accounting, software development and other jobs to the places where they are done most cheaply. The quality of the global workforce is on the rise: India, Pakistan, China, Eastern Europe and South America offer educated and motivated people eager for good jobs. The trend is not limited to desk jobs, either. UPS, for example, has transformed itself from a shipping company to a logistics company, with warehouses and expertise all over the globe, able to help companies with storage and distribution of goods, and with supply chain management.

These forces push in one direction: Companies and individuals must broaden their networks, cooperate with providers and consumers regardless of geography, and open themselves to fast and flexible affiliations that let them do more, more quickly, than ever before.

Friedman, Shapiro, Varian and Christensen all acknowledge that these forces are painful. When jobs are more mobile than people, people suffer. Like the others, though, Friedman makes a key observation: Lower costs and easier collaboration create opportunity as well as pain. If your infrastructure costs go down, you can invest more in innovation on top of that infrastructure. Yes, you need to work harder to find ways to innovate, and yes, you have more competition from other companies in other places. But global collaboration can be -- should be! -- about building new value, and not merely shaving costs. Christensen, in his public speeches, calls this "the conservation of attractive margins."

Tremendously interesting stuff, and well worth reading. But why is free the new open?

Friedman identifies ten trends that are flattening the world. One of them is open source. It's an important trend, but Friedman's description makes clear that it matters most because of the way that the open source community behaves.

After reading his book, I am more firmly convinced than ever of a key truth about open source: The source code is the least important thing about it. Successful open source projects thrive because of the charisma of their leadership, and because of the enthusiasm and dedication of the community members at large.

I believe that open source wins because of easy access to expertise. Most of the key developers of open source are directly accessible to users, and most work hard to stay in close contact with the larger community. That ethic, of low barriers and easy direct communication, is a world-flattener, in Friedman's terminology, and a sustainable advantage to the projects.

Certainly the act of sharing source code makes certain kinds of collaboration easier -- sharing the work of finding and fixing bugs, for example, and giving people the tools they need to add features and extensions. Many in the industry, though, confuse open source with open access. Access to the experts makes software more valuable; access to the source code may or may not.

When I talk about "open", I mean pretty much what Friedman means when he talks about "flat": factors like communication, collaboration, community, feedback, componentization, distribution. I believe that open is strategic, but that source is merely tactical. Competitive organizations need to find ways to be more open and collaborative, to solicit feedback more directly, to work faster and to share more easily. Whether or not there is source code in the pot depends upon the soup.

Many in the open source community deride proprietary vendors for their perceived fear or confusion about giving away source code. Open source projects have pioneered new collaborative strategies that drive success, but those strategies are easily learned. The winners in the future will be those who, like UPS in Friedman's book, transform themselves by adopting openness as a strategy, and who work hard and pay attention to their customers and partners. Proprietary software vendors may well have much to learn, but they not are stupid.

I don't usually post disclaimers on my personal blog, but will break my rule this time.

Because we recently sold Sleepycat to Oracle, some might read this post as a dark prediction on the future of Berkeley DB. It's not. Berkeley DB is tremendously successful. It uses the source tactic to advance the open strategy extremely well. It's open source.

Rather, this post describes -- openly! -- what I think will happen next in the technology industry: Source code will fade in importance, and openness will become critical.

The world is flat, and flat is the new open.


Blogger Geoff Knauth said...

I don't like the notion of the importance of source code "fading." Access to source code is essential. It is where the new generation of experts comes from. Cut that off, and we have patriarchs hoarding their expertise.

5:28 AM  
Blogger meimei said...

I think you mean the importance of proprietary source code "fading", not the source code itself, right?
anyway, like the book you mentioned here... thanks

10:16 PM  

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