Author: JP

If you haven’t seen it before, you should take a look at the video I’ve linked to in my sidebar, showing Shane Warne’s eight greatest balls. I thought the Gatting ball was sensational but the Chanderpaul one is something else.

Incidentally, the videos I show via Vodpod are not mine, there is no attempt at defining ownership of the “content”. You should consider the VodPod sidebar on the same basis as my last.fm or librarything coverage. These things tell you what I like, what I’m watching, what I’m reading, what I’m listening to. Why? So that I can hear from you using some form of collaborative filter, something I can do with quite a few of the tools I’ve mentioned.

I’d recently posted about the reasons why enterprises should use opensource, somewhat tongue-in-cheek, just to switch the conversation from the “cheaper to buy/fix/run” reason traditionally provided. Many of you were kind enough to comment, and a couple of you raised some questions on my first point, on responsibility.

So I’d like to expand a bit on that. When I entered the industry nearly thirty years ago, people used to say “Nobody got fired for buying IBM”. When the battle moved from the mainframe to the desktop, the saying mutated to “Nobody got fired for buying Microsoft”.

So who’s next, I ask myself. And the answers that come aren’t that well-formed. Please flame them, criticise away. I will learn from you. And here they are:

Answer 1: There is no next, and there will never be a next. The industry has changed fundamentally and structurally, and there is no longer any space for a dominant platform. Where there is a platform, it will be an open many-sided low-barrier-to-entry malleable beast, run on classic NEA principles. (Nobody owns it, Everyone can use it, Anyone can improve it). Incidentally, there is no Wikipedia entry for NEA. There should be one. Any takers? Otherwise I will.

Answer 2: There is a next, and it’s here already. And it’s called Linux, and it’s NEA already. Distros can try and dominate, but they will fail. The market will ensure that no distro gets that power.

Answer 3: There is no next, but there will be one. It will emerge from that weird space where mobile meets palmtop meets desktop. The only question that’s left is whether an open iPhone can stave off the linux world for long enough, or whether later generations of iPhone will really go where James Gosling thought OSX would go: Linux with QA and style.

I’m probably biased, I think there really is only one answer. Linux with QA and style. What I’m not sure of is where that will come from.

There’s a lot more to the question of CIOs and responsibility and risk. We live in an age of The Risk Management of Everything; so much so that many CIOs seem to believe that outsourcing is a means of offloading risk. I don’t. Outsourcing and offshoring are ways of  making sure you focus on the right things, making sure you have access to the right skills, making sure you  can do all this at the right price point.

But the risk remains yours. As long as the customer remains yours.

The day you manage to offload your risk successfully, you’ve offloaded your customer as well.

The customer stays with you because there is a relationship, a relationship of trust; there is a vulnerability within that relationship, a vulnerability that is born of the risks you face together, a vulnerability that underpins the relationship, that makes it human. When everything that is hardware and software is commoditised, there will still be something unique: the relationship. And customers will stay with you because of your service. Underpinned by that vulnerable relationship.

More later.

Tara Hunt, while commenting on a recent post of mine, reminded me that I needed to revisit Invisible Engines; I’d received the book while recuperating from my heart attack, found it an excellent read, but for some reason never got to pass 2. Big mistake, but corrected now thanks to Tara’s timely reminder. Thanks, Tara!

[An aside. I tend to read management and technology books on a three-pass basis. First pass is a quick skim, taking no notes, just absorbing the feel of the book. If I find one compelling idea in it, the book makes it to pass 2, where I read more slowly, skip entire chapters along the way, but make notes. If I find I make more than three notes, I read the entire book even more slowly, in pass 3. Maybe 1 in 200 such books make pass 3. The Social Life of Information, The Cluetrain Manifesto, Emergence, Community Building on the Web and Smart Mobs are examples of Pass 3 books.]

I quote from the blurb:

Software platforms are the invisible engines that have created, touched, or transformed nearly every major industry for the past quarter century. They power everything from mobile phones and automobile navigation systems to search engines and web portals. They have been the source of enormous value to consumers and helped some entrepreneurs build great fortunes. And they are likely to drive change that will dwarf the business and technology revolution we have seen to this point.

The material in the book is not new per se, but the adjacence of ideas and their sequencing make it something new, at least to me. The authors know their subject matter, present it well, build a compelling story and thereby entice the reader into flights of fancy. That’s the kind of book I like.

In the serendipity that is typical of the blogosphere, I was reading Doc Searls in his latest Suitwatch, titled Thinking Past Platforms: The Next Challenge for Linux. This, while still poring over Platform Competition in Two-Sided Markets, a paper recommended by the Invisible Engines authors. [Thanks, guys!]

And all this reading led me to the following statements, paraphrasing and summarising the bits and pieces I’ve mentioned earlier in this post. Apologies to all concerned if I have misrepresented or misconstrued:

• 1. A software platform is a place. A marketplace.
• 2. This marketplace is multi-sided and can be open or closed; the more open it is, the more “sides” it has.
• 3. Conversations happen between these sides: consumers, software developers, hardware providers, whatever.
• 4. Marketplace participants obtain value from the marketplace provider by sharing services they would otherwise not be able to afford.
• 5. There is an implied long tail in the shared services model, no single participant consumes any significant proportion of the shared services.
• 6. As a result, while the “infrastructure” provided by the marketplace is commoditised, it is used in many diverse ways by the participants, allowing competitors to differentiate themselves, usually on presentation, simplicity, convenience, access and complementarity.
• 7. A marketplace often consists of a series of smaller marketplaces, often overlapping partially.

So far so good. But if you’re like me, you start going into wild tangents at this stage. You start asking questions like:

• Would you go to a marketplace where access depended on the type of car you were driving?
• Would you go to shops that insisted you only wore clothes bought from them?
• Would you build a shop in a marketplace that told you it governed the signage on your shop as well as your employment contracts?
• Would you pay to rent a shop if you were told you had to pay whether the marketplace stayed open or not, whether the lights worked or not, where security was slack and crime was high?

I think the authors of the book have helped me understand something more about what a platform is, and why it is much more of a marketplace than I had imagined previously. For this I am grateful. With that in mind, I realise how much Doc hits the nail on the head:

Linux is the frame construction of computing…….You can make anything with Linux.

Hugh asks how come there aren’t any opensource billionaires. Actually, I think there are a number of opensource billionaires.

When hardware meant money, there were hardware billionaires. They made money Shifting Tin, and gave software away for free. And one day there wasn’t any margin left in hardware.

Software ruled.

When software meant money, there were software billionaires. They made money Shifting Code, and gave services away for free. And one day there wasn’t any margin left in software.

Services ruled.

When services meant money, there were services billionaires. And so on and so forth.

Infrastructure commoditises and is itself commoditised. Otherwise it wouldn’t be infrastructure. When you dominate a market, you run the risk of becoming part of the infrastructure, and margins collapse as people look for differentiation beyond that infrastructure.

This process of active commoditisation takes place in every economic cycle, changing scarcities to abundances and, in the process, creating new scarcities. The latest scarcity is talent, human ingenuity. Not something that is going to be commoditised in a hurry.

Google and Amazon and eBay and Skype may not like being called Services, I just couldn’t find a better word. One thing’s for sure. These businesses created billionaires.

Billionaires who made money because of opensource, not with opensource.

I quote from Doc:

I’m especially interested in exploring what I’ve been calling the because effect. This is what you get when your new business isn’t just about inventing and controlling technologies and standards, but about taking advantage of the new opportunities opened up by fresh new technologies and standards. For example, making money because of blogging, or RSS, or desktop Linux, or whatever — rather than just with those things.

The because effect is a kind of jujitsu. While other people look to make money with something, you’re finding ways of making money because of something.

Prime example, because of search, Google and Yahoo make money with advertising. Another: because of Rivendell, Salem Communications saves money with its core business, which is broadcasting. Because of his blogging, Thomas Mahon makes more money with his tailoring business.

There’s something peculiarly satisfying about starting a post with Hugh and ending it with Thomas Mahon …. feels like a whole nine yards of Savile Row there.