Attention CEO’s: You Are in the Software Business. Now What?
Whether you’re Nissan or Toyota, Walmart or Nordstrom, NYSE or NASDAQ, you are in the software business. Every company today, regardless of whether or not they’re a “technology” company, is in the business of building software. Today’s consumers demand it.
Companies will spend $1.4 trillion this year on global R&D to design and build their core products. They don’t have the time or dollars to build the software from scratch that runs in those products. So, they’re turning to Linux and open development. Once upon a time just an operating system for servers, mobile devices and supercomputers, Linux is giving companies $10B in R&D that they can pull from and run with to build everything from cars to custom devices, and much more.
Companies finding themselves in the software business can learn a lot from long-time Linux users and sponsors HP, IBM, Intel, Google, and Qualcomm, among others. These companies already spend billions on R&D, according to USA Today and IC Insights: Intel alone will spend $8.4 billion dollars on R&D. Google a whopping $5.2 billion. HP, IBM and Qualcomm will spend $3.2 billion, $6.3 billion and $2 billion respectively. This is a huge sum of money. But with Linux and open development, they maximize those billions of dollars on product innovation and rely on the power or collaboration to build the software that runs their products.
If you've never heard of Imad Sousou, Dan Frye, Chris DiBona or Mark Charlebois, you should. They work on managing billions of dollars worth of development for the likes of Intel, IBM, HP, Google and Qualcomm. But rather than manage the development and R&D inside their companies, they are in charge of managing participation in development outside their companies. New companies to Linux and open development can learn a lot from how these people participate in Linux.
Software is simply no longer developed in isolation. No one, not even Apple or Microsoft, can afford not to take advantage of open, collaborative development. And, companies just arriving to the software business - companies like Toyota and Nissan, for example - aren’t about to start from scratch. They’re using the world’s largest code base from which to accelerate innovation in a fiercely competitive technology market.
This trend has led the world’s best companies to create dedicated teams that are in charge of getting the most out of this external R&D. At IBM's Linux Technology Center, Dan Frye manages a group of developers who participate in open source projects that shape IBM's software future. His team works on the Linux kernel project, compiler projects, and a variety of other open source initiatives so that the open source code in the worlds most successful project runs great on IBM hardware. The same can be said of Intel where they have an Open Source Technology Center under Imad Sousou made up of hundreds of engineers working on a stunning array of open source projects around virtualization, graphics, networking and more so that it runs better on Intel architecture than any other platform.
The payback these companies get by having a group dedicated to this work is huge. These teams manage who contributes to what project, under what terms developers are allowed to contribute and how to manage intellectual property both inside and outside the company, among other functions. Even if the group has dozens and dozens of staff, as in the case with Qualcomm Innovation Center under Mark Charlebois, that pales in comparison with the billions of dollars of open source software those companies depend on to run their business.
And now the hottest Internet and social media companies are hopping on the bandwagon too. Twitter recently hired Open Source Manager Chris Aniszczyk to manage its interaction with open source projects such as MySQL, Cassandra, Hadoop, Lucene, and Pig; open source projects which are all used within Twitter’s infrastructure. Twitter even has created open source projects themselves, which include Iago, a load generator for testing services; Zipkin, a distributed tracing system; and Scalding, a Scala library that makes it easier to use Hadoop.
Facebook isn't being left behind, either. Mark Zuckerberg's famous "hacker way" letter is being institutionalized with projects such as OpenCompute, which has released the secrets of Facebook's data center hardware for the world to see. Why? Because everyone benefits when these things can be shared and collaborated on. Finally, under Chris DiBona at Google there is a group that has come up with Google's famous "Summer of Code" and that manages the search giant’s participation in the hundreds of open source projects that powers everything at Google from its search engine to Andriod phones.
Smart CEO's are recognizing that the bottom's up trend that brought open source software to play such a major role in their products now warrants a top-level view. Managing collaborative R&D not only provides direct value in terms of the quality of the code that is being used to power any company’s products, but it also means that organizations might be able to spend more of their internal development resources on things that can allow them to compete at even higher levels of innovation.
Being in the software business means learning how to collaborate and watching the results pay for themselves. A good place to start is by learning from the best organizations in the world that have wholesale groups dedicated to external development.