Jonathan Rosenberg, Senior VP of Product Management at Google, should be congratulated for sharing his expansive thoughts on “The Meaning of Open.” This will no doubt generate a lot of debate on whether people feel Google is acting within this definition. But I think it’s necessary to take issue with some of his logic, particularly as it relates to open source and open technology.
First off, I think it’s fair to acknowledge that while Google may not be the paragon of open virtue they’re certainly better than most. They are, in my personal opinion, one of the most positive forces for the advancement of open source in the market today. So, what could I possibly disagree with? Well, my primary issue with Rosenberg’s views boil down to what I see more as a sin of omission rather than commission.
Rosenberg introduces the following idea early in his piece:
To understand our position in more detail, it helps to start with the assertion that open systems win. This is counter-intuitive to the traditionally trained MBA who is taught to generate a sustainable competitive advantage by creating a closed system, making it popular, then milking it through the product life cycle
OK, let’s run with that idea and compare it to Google’s actions. When we look at the areas where Google embraces open technology, open standards and open source it becomes clear it’s focused on the way Google operates its business. But when it comes to Google’s core advertising business things start looking a whole lot less open. Remember, Google’s core link analysis algorithm, PageRank, is a patented process. The refinements and improvements they’ve made over the years are strictly held secrets. Sure, Google have proven to be masters at strategically applying open source in the provision of their core business and in removing competitive obstacles. But embracing things like open advertising networks are another thing altogether.
Again, I’m not interested in criticizing Google. Nor is Rosenberg trying to paint Google as purely an open organization. But the disconnect between Rosenberg’s assertion that open systems win and what Google actually does is indicative of a common misunderstanding of how modern businesses are using open standards, open source and open technology. Openness is by and large a strategy to reduce operating costs and remove supply chain dependencies. Open is not a revenue engine in its own right. In that regard, Rosenberg’s observation about sustaining competitive advantage through closed system are still valid. The only real change is that organizations are increasingly understanding how to balance both closed and open systems.
The truth is that closed systems still win. Open systems, practically speaking, are basically good for making others lose.
The art of business in the 21st century is figuring out how to open up your suppliers’ and competitors’ business while keeping yours tightly sealed. And in that endeavor Google has proven highly successful.
But here Rosenberg gets all tangled up trying to explain this away. He says:
While we are committed to opening the code for our developer tools, not all Google products are open source. Our goal is to keep the Internet open, which promotes choice and competition and keeps users and developers from getting locked in. In many cases, most notably our search and ads products, opening up the code would not contribute to these goals and would actually hurt users. The search and advertising markets are already highly competitive with very low switching costs, so users and advertisers already have plenty of choice and are not locked in. Not to mention the fact that opening up these systems would allow people to “game” our algorithms to manipulate search and ads quality rankings, reducing our quality for everyone.
It’s so good to know that Google has our back, isn’t? And I’m sure there’s a broad consensus that Google is in the best position to determine which parts of the internet should be open and which parts should be closed. Coincidentally, the part that should stay closed is the part they make their money.
Seriously though, I don’t think Rosenberg is making any attempt to mislead. I think he’s thinking out loud and trying to reconcile the paradox he’s created for himself – that open systems win even though Google’s success is so clearly the result of being strategically closed. Jonathan – just accept that modern businesses need both open and closed systems and the paradox of your achievements will disappear.
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It’s not IMHO fair to make the generalisation that “open systems win”.
Open systems mean you can avoid competing in areas which really aren’t important to your business. Google’s business is institutionalised snooping (and I don’t use the term in any malicious sense). Google wants to know as much as possible about what you and I are doing so they can better target us with advertising. And owning proprietary software is not important to many areas of that business. And, in Google’s case they take it one step further because Google generally delivers open capabilities rather than closed applications allowing third party developers to build lots of interesting things on top of Maps, Earth etc. And when you and I use these applications it just provides more information for Google to mine.
The real issue is not religious debates about open vs closed, or “do you have a monopoly” but “what piece of the value chain can no-one take away from you”. But it’s interesting that the parts of the value chain that are really important to Google such as search and advertising are closed more tightly than a limpet shell.
Nick – we’re on the same page!
OSS has many advantages–development, marketing, costs–but making money is not one of them. As a result, from a ISV business perspective, open source is a great way to penetrate mature markets dominated by commercial software. But when you get a huge user base, then what? In some respects it is analogous to China. You have bought the market with cheap labor, but you are stuck with low margins and barely a living wage; what good is that? The endgame seems to be acquisition.
Well put. Google “open” products are there to deny competitor advantage.
Because I don’t think they’re making any cash of google doc’s or other widgets/tools they publish.
Event though it looks like choice that they claim to provide. Is it really choice ? These free products are still immature when compared to their paid counter-parts. But they’re enough for competitors to invest in countering their potential future threat.
I don’t think it’s a bad thing either, but it serves to reduce impact of technological monopolies. Ironically no one has yet managed to successfully compete against the Google advertising monopoly. Will be interested to see Google’s point of view when this happens.
Guilio – wouldn’t it be nice though if Google was actively participating in reducing the impact of technical monopolies in internet search?