Joel West

Challenges of Open Innovation: The Paradox of Firm Investment in Open-Source Software

Open innovation is a powerful framework encompassing the generation, capture, and employment of intellectual property at the firm level. We identify three fundamental challenges for firms in applying the concept of open innovation: finding creative ways to exploit internal innovation, incorporating external innovation into internal development, and motivating outsiders to supply an ongoing stream of external innovations. This latter challenge involves a paradox, why would firms spend money on R&D efforts if the results of these efforts are available to rival firms? To explore these challenges, we examine the activity of firms in open source software to support their innovation strategies. Firms involved in open source software often make investments that will be shared with real and potential rivals. We identify four strategies firms employ — pooled R&D/product development, spinouts, selling complements and attracting donated complements — and discuss how they address the three key challenges of open innovation. We conclude with suggestions for how similar strategies may apply in other industries and offer some possible avenues for future research on open innovation.

How Open is Open Enough? Melding Proprietary and Open Source Platform Strategies

Computer platforms provide an integrated architecture of hardware and software standards as a basis for developing complementary assets. The most successful platforms were owned by proprietary sponsors that controlled platform evolution and appropriated associated rewards. Responding to the Internet and open source systems, three traditional vendors of proprietary platforms experimented with hybrid strategies which attempted to combine the advantages of open source software while retaining control and differentiation. Such hybrid standards strategies reflect the competing imperatives for adoption and appropriability, and suggest the conditions under which such strategies may be preferable to either the purely open or purely proprietary alternatives.

Getting Clear About Communities in Open Innovation

Research on open source software, user innovation and open innovation have increasingly emphasized the role of communities in creating, shaping and disseminating innovations. However, the comparability of such studies has been hampered by the lack of a precise definition of the community construct. In this paper we review prior definitions (implicit and explicit) of the community construct, and other suggestions for future research.

Contrasting Community Building in Sponsored and Community Founded Open Source Projects

Prior characterizations of open source projects have been based on the model of a community-founded project. More recently, a second model has emerged, where organizations spinout internally developed code to a public forum. Based on field work on open source projects, we compare the lifecycle differences between these two models. We identify problems unique to spinout projects, particularly in attracting and building an external community. We illustrate these issues with a feasibility analysis of a proposed open source project based on VistA, the primary healthcare information system of the U.S. Department of Veterans Affairs. This example illuminates the complexities of building a community after a code base has been developed and suggests that open source software can be used to transfer technology to the private sector.

Managing Distributed Innovation: Strategic Utilization of Open and User Innovation

Research from a variety of perspectives has argued that innovation no longer takes place within a single organization, but rather is distributed across multiple stakeholders in a value network. Here we contrast the vertically integrated innovation model to open innovation, user innovation, as well as other distributed processes (cumulative innovation, communities or social production, and co-creation), while we also discuss open source software and crowdsourcing as applications of the perspectives. We consider differences in the nature of distributed innovation, as well as its origins and its effects. From this, we contrast the predictions of the perspectives on the sources, motivation and value appropriation of external innovation, and thereby provide a framework for the strategic management of distributed innovation.

An exploratory study into open source platform adoption

Research on open source software has focused mainly on the motivations of open source programmers and the organization of open source projects (Kogut and Metiu, 2001 and Lerner and Tirole, 2002). Some researchers portray open source as an extension of the earlier open systems movement (West and Dedrick, 2001). While there has been some research on open-systems software adoption by corporate MIS organizations (Chau and Tam, 1997) the issue of open source adoption has received little attention. We use a series of interviews with MIS managers to develop a grounded theory of open source platform adoption. We contrast this to prior academic and popular reports about the adoption of open source.

Standards and Public Policy: The economic realities of open standards: black, white, and many shades of gray

Open standards have long been popular among buyers of goods and services in the information technology sector. Self-interested buyers and sellers, however, have had incentives to overstate (or understate) the openness of various standards. This paper rejects the simplified view that there is a single model of an open standard, as well as the assumption that a fully open solution is always an optimal (or even a feasible) outcome. The author analyzes various economic and technological forces that make standards more or less open and how these economic forces are affected by the policy choices available to firms, standards setting organizations, and regulators. The author uses this analysis to suggest objective measures for standards openness and a typology of common bundles of standards rights; he also notes the practical limits to open standards. * Joel West is Associate Professor of Technology Management, College of Business, San Jose State University. He can be reached at Joel.West@sjsu.edu ; http://www.joelwest.org. The author would like to thank Donald Deutsch, Phil Gross and Andy Updegrove for sharing their experience and depth of knowledge of standardization processes. The discussions with Ken Krechmer and Tim Simcoe regarding their own evolving ideas on open standards, and comments on earlier versions by Scott Gallagher and Kai Jakobs were also greatly appreciated. Finally, the author thanks the editors for their invaluable guidance, encouragement, and patience.

Value Capture and Value Networks in Open Source Vendor Strategies

Firms involved in open source software face inherent limits on their ability to appropriate returns from technological innovation. Here the author examines the business models used by IT vendors given the limited appropriability available for open source software. The author shows how firms capture value through complementary assets, while creating value and positive network effect through an inherent openness that attracts complementors, users and rivals to their corresponding value network. From this, this article offers suggestions for future research on complementary assets and value capture in business models

Open Source Standardization: The Rise of Linux in the Network Era

To attract complementary assets, firms that sponsor proprietary de facto compatibility standards must trade off control of the standard against the imperative for adoption. For example, Microsoft and Intel in turn gained pervasive adoption of their technologies by appropriating only a single layer of the standards architecture and encouraging competition in other layers. In reaction to such proprietary strategies, the open source movement relinquished control to maximize adoption. To illustrate this, we examine the rise of the Linux operating system from 1995–2001, particularly the motivations of organizational buyers and suppliers of complementary assets, and Microsoft’s reaction to its success.

Ma Bell's orphan: US cellular telephony, 1947–1996

Abstract The AT&T Bell System invented cellular telephony and deployed the worlds first prototype cellular system. Strangely, neither AT&T nor its spin-off Regional Bell Operating Companies capitalized on that technological lead, and cellular telephony in the US slipped behind that in other developed countries. This turnaround is explained as a combination of a competency trap that blinded the AT&T Bell System leadership to the importance of the wireless telephony market and the lead their cellular system offered, coupled with a failure of institutional agency required to organize and direct the emerging industry resulting from the death of the AT&T Bell System.