This also might seem common sense now, but it hasn’t been happening for long. As I mentioned in my previous post in this category, the idea in the 90′s was if you wanted to make money then you had to have exclusive control. But having exclusive control means that only your customers will be using it. And if it is new, potential customers may not want to commit to that technology/product until other customers are already there to make sure it runs well and will be long-lived. This is why there was so much fragmentation.
The scare in being open is that a provider’s high-profit item can be commoditized. I believe that commoditization is inevitable. You may try to delay it, but it will happen eventually. The commodity line is always rising. So embrace it now, and instead spend your resources working on high-value items above the commodity line. You will probably need to periodically exit business areas that are falling below the commodity line and start fresh on something higher up. The one thing constant about the I/T industry is change.
Eclipse is probably the best example of a proprietary thing that was turned into an ecosystem. Many people think of Eclipse as a Java IDE but it’s really an application framework. So applications other than a Java IDE can run inside it, for example object/business modeling, administration, groupware/email, etc. And it has the capability for running plugins developed by 3rd parties, one site alone lists more than 800 plugins available.
IBM could have held on to Eclipse as a proprietary item and not released it as open source. But I don’t think it would have reached the same level of use in the community had it done so. By making it open, the number of participants has greatly increased. Quoting Metcalfe’s Law, the value of the network is the square of the number of the participants. When you get enough participants across a broad enough set of sources, the value becomes compelling enough that people will want to participate. That is how you get to have a community of adopters and contributors and hundreds of 3rd-party plugins.
When it becomes an ecosystem, instead of building raw elements and infrastructure, you can focus on your specialties, or in other words, work higher up in the value chain. Instead of writing GUI widgets, you can do what you are good at and use the GUI widgets. Building things higher up the value chain means more capability for the customer and greater profit margins for the provider and a stronger industry. It’s better for everyone. Even when an IBM competitor like BEA joins the Eclipse Foundation, not only is it OK, it is good. It means the ecosystem is growing.