Opensource vs Intellectual Property

The terms “Open Source” and “Intellectual Property (IP)” on the face of would appear be opposite each other. The purpose of this blog though is to look into this more detail and understand how some potentially common myths; against each can be used positively and proactively

First of all, the term Intellectual Property is relatively easy to understand (for a non lawyer) and that’s without getting into Copyright and Patent law. At the simplest IP within a Corporation means that output created by individuals working for that organisation is owned by the organisation and therefore they can then choose how to manage, license and sell it.  This is by far the traditional method of working i.e. if an organisation wants something doing, they go inside the organisation and get it done. There are some very immediate and obvious constraints – the biggest being the ability for the organisation to actually produce it. The other key risk for an organisation is IP theft. This can happen on many different levels – with an obvious response mechanism to create a strong governance process to protect it. Of course the effect of such a governance process (as will be highlighted later) is this then further slows down and constrains an organisation to progress.

On the other hand Open Source has a number of key principles (https://opensource.org/osd) which means its licence should not restrict anyone from selling or giving away the output (traditionally software but can be anything) and should not distinguish on who, what or why it is going to be used.  The choice of Open source licence type is important as there are a number to choose from )from GNU General Public Licence, Creative Commons through to the Apache Licence – and many more as well. That definition is focusing on the output of Open Source. The value of Open Source is more the input i.e. that through relevant platforms (Github as an example) the creation of the software is collaborative between anyone that wants to be involved. Such is the significant phenomena of the usage of GitHub, that quite often employers will look at the amount of contributions an engineer has made to assess their virtual worth.

So the first point in favour of Opensource is that the speed, quality and content developed through an Open Source project is going to be significantly better that running an equivalent project in house -in all respects. If there are contributors of course. The obvious anti-pattern for Open Source is that if you are doing something so unique that no one else is doing it, then this method won’t necessary help at all either.

But – I here you ask, what’s the point of creating software  that I get no revenue for?

Large software (and hardware organisations) have clearly had the same dilemma and what we have seen is virtually every organisation now has an “Open Source” strategy.  Redhat as an example is one of the most significant opensource contributors. Its business model as stated is a simple one – to enable the best software to be created through the open source community and then to apply its additional expertise to “Enterprise” level solutions where applicable. This model has made Redhat very successful.  The key to success is understanding the business model in which the organisation is working.  Granted if all the organisation does is contribute to open source projects, its going to see a cost base of staff and no revenue base.

Other organisations  have followed this model but not to the same level – whether its IBM, DellEMC, etc . Even organisations like Microsoft (http://www.zdnet.com/article/why-microsoft-is-turning-into-an-open-source-company/) have turned their attention to Opensource. As the reference points out “this isn’t the company that Bill Gates/Steve Ballmer produced”  Granted Office and Windows are still very much Microsoft IP given the significant investment, but looking at its pipeline of new development -its all open source based.  It feels that an organisation isn’t credible any more if it hasn’t got an active Open source policy. Look at AWS for example: https://aws.amazon.com/opensource/. Do we actually believe it? Looking at the Pharma Industry, where the R&D is so high and the speed to market is so long, you would expect a relatively negative approach from the existing organisations. However, there are many moves to radically review this https://www.theguardian.com/commentisfree/2017/apr/19/why-open-source-pharma-is-the-path-to-both-cheaper-and-new-medicines

Facebook sees open source as being good for business: “It means we build better software, write better code, our engineers are able to work with more pride, and we’re able to retain the world’s best engineers because they know they can open-source their work.” Ultimately, because engineers can see for themselves the kinds of things Facebook is working on, it makes it easier to attract the top talent. “It’s not all altruism, there’s solid business sense behind this.” – James Pearce, Facebook, Ventue Beat

However, its not all good news stories: Openstack is an interesting reference point.  Openstack should have been an Opensource based success. However, current analysis suggests that it simply hasn’t delivered functionality quickly enough and therefore is losing market traction. (https://opensource.org/strategic)

So let’s relook at why this is such a significant phenomena. In 2015, Simon Wardley wrote “Use Open source as a Weapon” http://blog.gardeviance.org/2015/12/open-source-as-weapon.html. Simon’s assertions are very logical indeed; first of all there is no single-model-that-fits world – it absolutely depends where the organisation is in its lifecycle – from genesis, all the way through to commodity. At the genesis level, in the majority of situations, this will require an organisation’s own intellect to develop an idea because it probably doesn’t exist. This genesis stage will last for very different lengths of time depending on what is being developed.  However, as soon as the solution moves out of genesis into custom built and certainly into a product, using Open source most definitely creates an “accelerator” (as opposed to IP/copyrights/trademarks” which will act as a fantastic decelerator. The reason it acts as an accelerator is it provides the richest and broadest of resource pools to contribute to the product. Furthermore, as experienced by the majority of the top employers, it enables the most sought after developers/analysts to be attracted to work at these organisation.   As the product matures, it provides a market place that the business can then build upon.  The marketplace is critical as it effectively means there is a user base already wanting to use the product and build upon it

Of course for every pattern there is an anti-pattern and not surprisingly, “IP Drives Strategic advantage” becomes a common term. Also: “The IQ 100 (CNBC Innovators list)  continues to find those companies that are using IP to lead their sectors and, more importantly, reach across sectors to make huge market impacts,”  (https://my.dxc.com/news/2018/February/dxc-is-top-2017-performer-in-cnbc-innovators-index.html).  However, in reading many of these articles it is clear that the primary conclusion is that an organisation needs to innovate to retain a strategic advantage (Martin noted. “The measured difference between better and worse performers is innovation.” ). In this context, it means that Innovation will enable an organisation to gain market share/increase revenue/profit.   There are a number of base activities an organisation must concentrate in this area.   First and foremost, any IP developed must be protected in order that it is not lost or stolen. Equally important is to monetise the IP strategy – or in other words to work through the level of investment required vs the additional profit/revenue that could be generated. We come full circle on this thread as in order to monetise it requires an assessment of the level of IP vs Opensourcing is appropriate.

Conclusion.  Open Sourcing doesn’t guarantee success and in fact could create more of a business problem than before (i.e. giving away a company’s position in the market) .  Used correctly, it will provide an acceleration to solution development that will otherwise be unattainable.   It is most definitely not a one size fits all which means an Organisation needs to create an IP and Open Source position.  It needs need very close attention to detail so that is managed carefully.  Don’t believe all the headline publicity  – every large organisation will have a public message on the use of Open Source – it doesn’t necessarily mean it goes very broad or deep though.  A significant bi-product of Open Sourcing is the transparency of capability and competence which changes the way the job market works completely – much more through evidence rather than supposed experience.  Education and training with an organisation is key on both IP management and Open Source development in order that it is well thought through and structured.

 

References:

https://www.oreilly.com/ideas/crossing-the-river-by-feeling-the-stones

http://blog.gardeviance.org/2015/12/open-source-as-weapon.html

http://blog.gardeviance.org/2016/11/why-fuss-about-serverless.html

https://fee.org/articles/open-source-software-who-needs-intellectual-property/

http://softwarecontractsolutions.com/how-open-source-and-proprietary-ip-can-co-exist/

https://blogs.dropbox.com/tech/2017/12/balancing-open-source-and-proprietary-ip-they-can-co-exist/

http://www.nber.org/papers/w12148

https://fossbytes.com/open-sources-license-type/

https://opensource.org/osd

http://www.zdnet.com/article/why-microsoft-is-turning-into-an-open-source-company/

https://aws.amazon.com/opensource/

https://www.theguardian.com/commentisfree/2017/apr/19/why-open-source-pharma-is-the-path-to-both-cheaper-and-new-medicines

https://www.mirantis.com/blog/six-reasons-openstack-fails-hint-its-not-the-technology/

http://www.zdnet.com/article/heartbleed-open-sources-worst-hour/

http://info.ipvisioninc.com/blog/3-advantages-of-using-ip-intelligence-to-drive-corporate-strategy

https://my.dxc.com/news/2018/February/dxc-is-top-2017-performer-in-cnbc-innovators-index.html)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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