I often have to “sell open source” and the pitch for this is ever changing. Here is the current one; it stands at 120 seconds. It is aimed at the German Mittelstand, but it should work for any product vendor where software is just one component of several.
“Software is eating the world” says a Silicon Valley venture capitalist. This is not just American hyberbole. Not only is software its own industry with its own products, it is also taking over the world of physical and other products.
Today, leading companies can turn software innovation into revenue within seconds, not months or years. Using the techniques of so-called continuous deployment, the delay between a programmer finishing a new product feature and the time when the feature starts generating revenue has come down to seconds.
As a consequence, traditional product vendors are racing to change their products in such a way that they can utilize the significant speed-up in innovation that software can give them. Product architectures are being changed to incorporate as much software as possible, while trying to avoid commoditizing the hardware part of the product.
As the software part in products grows, the dependency of the product vendors on their supply chain of software components also grows. In fact, the software suppliers and their platforms are threatening to marginalize their customers; if the stock market capitalization of companies is any indicator (the software companies are leading), this has already happened.
The malleability of software enables not only unprecedented innovation speed; it is also the biggest Achilles heel of the big software companies. Traditional product vendors can drive down the cost of the software components they need by collaboratively developing competitively non-differentiating software components as open source software. To be successful and cost-effective, traditional vendors need to do this jointly, sometimes with their competitors.
Fortunately, the necessary open source collaboration is well understood. I call this form of organizing industry user consortia, to distinguish them from the developer foundations that the software industry has developed. In a user consortium, members collaborate to develop the open source software they need and to keep the software industry at bay. Making the software open source helps avoid legal quarrels and increases likelihood of success.
I’m an expert on open source user consortia, having helped establish the German energy network distribution consortium openKONSEQUENZ, which is a consortium of energy distributors who joined forces to develop open source software for the smart grid. Feel free to approach me with any question you might have.