Professor Pamela Samuelson from Berkeley has an article, in the forthcoming issue of Communications of the ACM, on IBM’s adoption of FOSS business strategies. My original reaction to Professor Samuelson’s foray into business and industrial history was: “don’t quit your day job.” However, Professor Samuelson does decently lay out the motivations and developments behind IBM buddying up with FOSS. Yet, if the history is anything, it is never as consistent, simple nor leading by coherent steps up to the present as the article may be interpreted to suggest for IBM and FOSS.

Of the three possible explanations that Professor Samuelson gives for IBM’s turn-about in the 1980s, only the first was likely on the mind of the talented Lewis Gerstner, as he pointed IBM towards FOSS. The second two arose as marketing ploys for IBM to convince customers, partners and consumers that it made the right decision.

There are at least three stories one can tell about this shift. IBM’s adoption of open source can be viewed: (1) as an anti-Microsoft strategy; (2) as a consequence of changed business models in the software industry; and (3) as a manifestation of an open innovation strategy for promoting faster and more robust technical advances.

Professor Samuelson’s account of IBM’s competitive concerns with Microsoft is incomplete. FOSS was a way for IBM to commoditize the operating system market (in which Microsoft was handing it defeat after defeat), adopt the existing FOSS user base, reallocate capital from its unprofitable operating system P&Ls, and channel competitive energy to new businesses; rather than Professor Samuelson’s recollection that FOSS simply cost less than IBM “developing a new operating system from scratch.”

In other parts of the article, Professor Samuelson oversimplifies the economics of FOSS and the technology industries. For one thing, it is likely that the bigger part of IBM’s investment in FOSS go to marketing and sales. It is not plausible, given IBM’s reliance on volunteer developers in its FOSS business line, that it spends, as Professor Samuelson claims, “$100 million a year to the development (of FOSS).”

Further, Professor Samuelson gives IBM a lot of credit for its motivations. No company in history has had such a self-determined business strategy as set out in this article. She is right that “embracing Linux has ...brought IBM significant public relations benefits” but IBM did not give backing to FOSS simply because customers valued open standards, interoperability or customized solutions as Professor Samuelson dresses up the windows with.

Nor did IBM pursue FOSS because former IBM executive, Louis Gerstner, “set out to change IBM’s business models and internal culture to create a more customer-centric business environment.” That is more flowery than even Gerstner fans will argue (including me). Later however, but without expressly saying so, Professor Samuelson clarifies this view.

While some software developers adopt open source as a matter of principle, IBM’s embrace of open source seems more driven by pragmatism and its relative market power. Yet, IBM’s embrace of open source is no less welcome for being pragmatically inspired.

Professor Samuelson does a good job of handling nuances in IBM’s FOSS strategies that FOSS proponents do not always admit. Despite embracing FOSS, and donating several hundred patents to the technological community, IBM still owns considerable proprietary holdings, as exemplified by its number of patents. Further, IBM shows no inclination to “open” some of those assets including its proprietary operating systems.

The success of open source does not signal a lessened importance for intellectual property rights compared with twenty years ago, but rather a shift in the way these rights are employed in the software industry.

Yet, similar to FOSS proponents who tend to read too much significance into things, Professor Samuelson argues that IBM’s adoption of FOSS indicates that “the (IP) landscape and the nature of competition in the software industry have changed dramatically in the past twenty years.” In fact, FOSS has been around longer than many of its proprietary counterparts. The growth of FOSS aligned with the maturity of the Internet, and the enablement of decentralized information collaboration. Still, FOSS is successful only in some technological segments.

So, I have to say to Professor Samuelson, you can quit your day job, but please don’t…:)

posted by Noel Le @ 11:15 AM | Free Culture Movement, Markets: Business, Investment & Innovation

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