Saturday, January 9, 2010

Google's half-full glass of openness

A number of experts have been remarking that the NexusOne brings Google into more direct competition with Apple and the iPhone, ending a once cozy and complementary relationship between the two firms.

Google’s mobile strategy continues to get closer to Apple’s. Both are peddling mobile platforms, seeking users, operators and third party software providers. While Google’s OS is open source — and available via multiple handset manufacturers — it still is a hybrid open/proprietary strategy that competes with Apple’s own hybrid strategy.

Some analysts understand this better than others. Dan Moren of Macworld portrayed it thusly:

By putting its name on the Nexus One, Google has given the Nexus One a sort of primacy on the Android front, unifying the disparate elements of the Android movement: now it’s Google going head to head with Apple, not a strange amalgam of Google, Motorola, and Verizon. It’s as if Google has promoted itself to head of the Rebel Alliance opposing Apple’s Galactic Empire.
Ooo, there's a value laden metaphor if there ever was one! (NB: In Star Wars III, Lucas is much more sympathetic to the Empire’s control problems than he was in 1977 with Star Wars IV.)

A much more accurate characterization came from John Gapper of the FT
Yet Apple is not as closed as Google portrays it, and nor is Google as open. Instead, like the proverbial half-empty glass, Google is best regarded as half-open and Apple as half-closed. That is significant because it shows how such companies need to compete in a networked industry.

Google is fighting for its own interests as hard as Apple does. That is, at one level, obvious since they are both public companies that try to maximise revenues. Yet its insistence on not doing “evil” and its dismissive view of Apple and Microsoft obscures this.
Gapper’s point is that even if Google’s OS is open, it plans to make money off these phones through its control of search. Gapper had earlier observed that mobile phone value capture had shifted from European telecom manufacturers towards US Internet companies (e.g. Google), as well as Apple.

I agree with Gapper’s overall point this week that mixed proprietary/open strategies are both normal and reasonable. I also share his aversion to exaggerated claims of openness.

However, in thinking about some of my earliest research on openness — ironically a 2003 paper about Apple’s early open source strategy — I think Gapper has only half the story.

Gapper focuses on how (to use my 2003 term) Google is “opening parts”. Its mobile phone OS is open source, but other parts of the value proposition (e.g. search, maps, mail, etc.) are proprietary. Google shares its code, but not is advertising revenues.

However, to use the 2003 terminology, I think it’s clear that Android is also “partly open.” Truly open sponsored open source communities do more than just provide source code, but also share in the governance and technical direction. Someday Android may be open, but it’s not there yet.

While Gapper talks about the openness glass being half full, I think an equally important point is that for many companies it changes over time, and differs between markets and products.

The two most proprietary companies in the PC industry, Apple and Microsoft, had various degrees of openness over time and across product lines. Among mainframe companies, IBM was once the captain of proprietary IT strategies, but in the past 20 years has moved to embrace open source and make lots of money off of services. Sun claimed to be open — and in relative terms it was — but still did everything it could to create switching costs and proprietary rents. (NB: Google CEO Eric Schmidt spent 14 years at Sun as a manager and eventually CTO.)

So I think that the only realistic way to view Google is as a self-interested, profit-maximizing, semi-proprietary company that embraces openness when it suits its purposes. Consumers should (and do) welcome that many of its ad-supported services are free, but continue to remember that Google wants to keep its repeat customers every bit as much as Apple, IBM and Microsoft do.

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