Dirk Riehle's Industry and Research Publications

The 120 seconds open source pitch

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 and is aimed at the German Mittelstand. Any feedback is appreciated!


“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. This is due to software being highly malleable and not being bound by physical constraints.

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 to 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 parts in traditional products grow, the dependency of the product vendors on their supply chain of software components also grows. In fact, the software suppliers and their platforms threaten to marginalize their customers; if the stock market capitalization of companies is any indicator, this is already happening.

The malleability of software and that it is completely virtual, however, is also the biggest Achilles heel of the big software companies. Taking an open source approach, vendors of traditional products can drive down the cost of the software components they need. To be successful and cost-effective, they need to do this collaboratively with allies, who are also sometimes their competitors.

Fortunately, such open source collaboration is well understood. I call them industry user consortia, to distinguish them from the developer foundations that the software industry has developed. In a user consortium, players in traditional industries 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.

Comments

  1. […] companies understand this, and it would be good for public policy to help build that understanding. It is particularly valuable for Germany’s Mittelstand, which is increasingly seeing its margins eroded by software, as I have explained on this blog many […]

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