How to Harness Open Technologies for Digital Platform Advantage
Hervé Legenvre, Erkko Autio, Ari-Pekka Hameri
This study analyzes how businesses can strategically leverage open technologies, such as open-source software and hardware, to gain a competitive advantage in the digital economy. It investigates the motivations behind corporate participation in these shared technology ecosystems, referred to as the "digital commons game," and presents a five-level strategic roadmap for companies to master it.
Problem
As businesses increasingly rely on digital platforms, the underlying infrastructure is often built with shared open technologies. However, many companies lack a strategic framework for engaging with these 'technology commons,' failing to understand how to influence them to reduce costs, accelerate innovation, and outmaneuver competitors in a game played 'beneath the surface' of their user-facing products.
Outcome
- Businesses are driven to participate in open technology ecosystems by three types of motivations: Operational (e.g., reducing costs, attracting talent), Community-level (e.g., removing technical bottlenecks, growing the user base), and Strategic (e.g., undermining competitors, blocking new threats). - The research identifies four key strategic maneuvers companies use: 'Sponsoring' to grow the ecosystem, 'Supporting' through direct contributions, 'Safeguarding' to protect the community from self-interested actors, and 'Siphoning' to extract value without contributing back. - The paper provides a five-level strategic roadmap for companies to increase their mastery: 1) Adopting, 2) Contributing, 3) Steering, 4) Mobilizing, and 5) Projecting, moving from a passive user to a strategic leader. - Engaging in this 'game' is crucial for influencing industry standards, reducing vendor lock-in, and building a sustainable competitive advantage.
Host: Welcome to A.I.S. Insights, powered by Living Knowledge. In a world driven by digital platforms, the technology that runs underneath them is more important than ever. But what if there was a strategic game being played in that hidden space that could determine your company’s success?
Host: Today, we’re diving into a fascinating study titled "How to Harness Open Technologies for Digital Platform Advantage". It analyzes how businesses can strategically use open technologies, like open-source software, to gain a real competitive edge. With me to unpack this is our analyst, Alex Ian Sutherland. Alex, welcome.
Expert: Glad to be here, Anna.
Host: So, let’s start with the big problem. Businesses everywhere use open-source software, but the study suggests most are missing a huge opportunity. What's the issue here?
Expert: The issue is a lack of strategy. Companies build their digital platforms on this shared infrastructure of open technologies, what the study calls the 'digital commons.' But they treat it like a free resource, not a competitive arena. They fail to see the game being played 'beneath the surface' of their products.
Host: A game 'beneath the surface'? What does that look like in the real world?
Expert: A classic example is Google's Android. Before Android, Nokia dominated the mobile phone market with its proprietary operating system. Google released Android as an open-source project. This shifted the entire basis of competition away from the handset to applications and data, where Google was strong. It completely undermined Nokia's position, and they never recovered. That’s the power of playing this game well.
Host: That’s a powerful illustration. So how did the researchers get this inside view on the strategies of these tech giants?
Expert: They conducted a comprehensive study of the open source activities of major players like Facebook and Google. They looked at specific, influential projects across the entire technology stack—from user-interface software like Facebook’s React, to A.I. frameworks like Google's TensorFlow, and even open-source hardware for data centers.
Host: And what did they find? Why are these companies so invested in playing this 'digital commons' game?
Expert: The study identified three core types of motivation. First, there are 'Operational' benefits, which are the most obvious: reducing costs, speeding up innovation, and attracting top engineering talent who want to work on influential open projects.
Host: Okay, that makes sense. But it goes deeper than that?
Expert: Absolutely. The second level is 'Community' motivations. This is about growing the entire ecosystem around a technology. By making a project like Google's Kubernetes the industry standard for managing applications, they ensure a bigger pool of users, tools, and developers that they can also benefit from.
Host: And the final motivation is the most aggressive, I assume?
Expert: Yes, the third is 'Strategic'. This is where it gets really interesting. It’s about actively undermining a competitor’s advantage, like the Android example, or blocking new threats by establishing an open standard before a competitor can create a closed, proprietary one.
Host: So, if those are the motivations, how do companies actually make these moves? The study mentions four strategic maneuvers?
Expert: That's right, what they call the "4-S maneuvers." 'Sponsoring' and 'Supporting' are constructive moves. You're contributing code, funding foundations, and helping grow the pie for everyone, which builds your reputation and influence. 'Safeguarding' is about protecting the community from actors who might try to exploit it.
Host: And the last one sounds less collaborative.
Expert: It is. 'Siphoning' is when a company tries to extract value from the open community without contributing back, for example by using restrictive licensing. This can backfire, as users and developers value reciprocity and can push back publicly.
Host: This brings us to the most important question for our listeners, Alex. How can a business leader who isn’t running a tech giant apply these insights?
Expert: The study provides a fantastic five-level strategic roadmap for this. It’s about assessing your company’s maturity and ambition. Level one is simply 'Adopting' open technologies to save money, where most companies are.
Host: And how do they level up?
Expert: Level two is 'Contributing'—letting your developers contribute back to projects, which builds skills and attracts talent. Level three is 'Steering,' where you start actively trying to influence projects. At level four, 'Mobilizing,' you use open platforms to strategically challenge competitors. And level five, 'Projecting,' is the grandmaster level—shaping entire industries, not just single projects.
Host: So there’s a clear path for companies to follow, from being passive users to becoming strategic leaders.
Expert: Exactly. The key takeaway is that you can’t afford to ignore this game. You need to understand where you are on that roadmap and make a conscious decision about how you want to play.
Host: So, to summarize: the open technologies that power our digital world are not just free tools, but a competitive landscape. By understanding the motivations, using the right maneuvers, and following a clear roadmap, businesses can turn these shared resources into a powerful strategic advantage.
Expert: That's it perfectly, Anna. It’s about moving from being a consumer to being a player.
Host: Alex Ian Sutherland, thank you for making such a complex topic so clear. And thank you to our listeners for joining us on A.I.S. Insights.
digital platforms, open source, technology commons, ecosystem strategy, competitive advantage, platform competition, strategic roadmap