Posted by Michael Fassnacht, Global Chief Strategy Officer
Apple’s absolute stunning success
over the last few years has spurred in some circles a heated discussion
about the benefits of a closed versus an
open system approach for enterprises. A closed system can be described
as a tightly regulated and controlled universe of services that are
primarily communicating with its own system element while prohibiting
the connection with outside partners (or making it extremely difficult
or expensive). Apple and Microsoft are probably some of the most
prominent examples of a closed system where as Facebook and any open
source application (e.g. Linux, Wikipedia) represent best-in-class open
systems.
Some
people would argue that the best performing systems want to be open
(and potentially even free), other people would argue that only closed
systems are performing at the most innovative and user friendly level.
The discussion seems to be less empirical driven than a question of
philosophy and belief systems. If one objectively looks at the success
and failures of open versus closed system, one has to acknowledge that
we have extremely successful open and extremely successful closed
systems and companies.
But
who is following the right strategy, closed or open systems? It’s a
tougher discussion (and maybe the wrong question) than one might
assume. Nearly two weeks ago, Tim O’Reilly’s and John Battelle’s open letter
to Apple to join the open forum of the Web 2.0 principles confirm that
this becomes a fundamental and more heated discussion of right or
wrong, of being good versus evil, or being progress versus hampering
innovation.
But
looking at the reality of all companies, one has to conclude that all
commercially viable companies need some sort of closeness to protect
their competitive advantage and monetize their services. But at the
same time every company needs some degree of openness to fuel its own
growth and innovation. It seems that it is more a question of degree
between closeness and openness than a black and white decision. While
Facebook might be 90% open and 10% closed and Apple 99% closed and 1%
open, each company’s strategy and business model relies more on the
right position within this ever shifting changing continuum of
closeness and openness than making a dogmatic decision. A company can
be successful by being either much closed or very open. The key
criteria for its success seems to be how the company is utilizing the
intrinsic structure and benefits of either a closed or open system, not
a decision for or against either one of them.
In
the future we will not see a clear winner between companies who are
pursuing open or closed systems. There will be a co-existence of both
models in which the smartest company of how to leverage the differences
of these systems is winning, independent of its decision of being open
or closed.