Tuesday, December 13, 2011

Open source doesn't repeal laws of economics

After failing in its webOS strategy, HP has announced plans to use it to create an open source project. This is an example of what (in our 2006 paper) Scott Gallagher and I called a “spin-out” strategy by firms to find a home for a technology they no longer wish to control.

Some might hope this would be as successful as IBM was with Eclipse. Others compare it to Fedora, the Red Hat desktop variant of its core Linux server product. However, with more than a decade of open source research and consulting, I don’t think it will be successful.

I take HP at their word that they will work with the open source community to set up appropriate licensing and governance. Unlike other firm-sponsored communities, letting go is not likely to be a problem.

However, open source only works when you have enough contributors. WebOS is not desktop Linux. Before a project launches, the best proxies are developer interest and user demand (“scratching your own itch”), and it’s no secret that webOS — although technically sophisticated — was already an also-ran when HP bought it in spring 2010.

The fact that when software has failed as a proprietary technology, it nearly always fails as an open source technology. From my research, I’d say a major reason is timing: firms don’t let go until the technology has clearly failed on the market.

The other problem that the world really only wants (or needs) a single open source product in each category. Eclipse was the first open source tools platform, so that Sun’s subsequent efforts to let go were too late (see #1 above). The BSD variants of Unix predated Linux but were swamped and the Netscape server never caught on against Apache. It doesn’t have to be all that open, as the success of MySQL (and Android) has shown.

(Some would argue that Chrome and Mozilla are an exception to this rule. Perhaps — but the competition is not over yet.)

In fact, with webOS HP seems doomed to repeat history — in this case, Nokia’s failed efforts with open source Symbian. In addition to being late and competing against Android, Symbian began open source life with a raft of problems that caused it to lose its once-dominant market share in the category it created. The prospects for webOS seem similar — except that webOS never had 60% of the global smartphone market.

Does webOS have a chance? Over a decade ago, Shane Greenstein and Tim Bresnahan showed that the only way a new platform succeeded was by identifying an unserved niche (that hopefully became a big market). So if webOS is going to succeed, the answer is the same as a year or two ago: not by competing head-to-head with Android and the iPhone, but serving a market that they’ve ignored. Since HP hasn’t found this market in the past 18 months, I can’t see how open source will change things.


Eddy Pronk said...

What about the relationship between the number of contributors and "Use value"?

Why has it economics in the title and does the article not bring "Use value" in relation with failing in economic terms?

Joel West said...

Economics include both monetary and non-monetary benefits. Carliss Baldwin summarizes this in her paper on user vs. producer innovation:


Caesar Tjalbo said...

0: "This is the roadmap for WebOS, this is what we're going to do and provide, these are the resources available. To make it possible we'll additionally open the code, manage development and we'll steward the community."

1: "We're open-sourcing WebOS. We hope it will prosper. Oh yeah, we're still firmly committed to it."

Joel West said...


Very nicely put. The 0 case is what IBM did with Eclipse and the 1 case is what they did with Jikes.

However, Nokia tried the 0 case with Symbian — put a lot of time and resources into planning it — but it ended up in the same place as 1 would have done, just a couple of years later.


Unknown said...

Isn't it the case that HP are saying "We're funding WebOS as a startup - and oh, by the way, you're open source"

This is a funded organisation that are expected to "pivot" and find a purpose, and HP may provide hardware in 2012 (rather than an open source play per se).

If they don't then the source is available & HP didn't have to take a charge this quarter?

Joel West said...

The problem is, if people weren't all that excited about WebOS when HP — and Palm before it — were behind it, will they be more excited when it's on its own? I've never seen it work that way — at least for a system as large and as complex as a cellphone OS, competing with an established OSS alternative.