Inspired by Work

And that's what Cisco did. The company saw it as a way to hedge risk -- in this case, the risk associated with the loss of these two developers. Cisco knew that this software would likely remain alive for a long time, because its user base and developer base are now spread across multiple companies. It's like diversifying a stock portfolio.

Open-source strategies also help you hedge against an even more important risk: epistemic risk, which is the risk that you don't know the right things and that you don't have the correct representation of the problem or the opportunity in the first place. As technology gets more complex and customers get smarter, predicting what people will actually do with the stuff you create -- or whether you're creating stuff that people want -- gets harder and harder. Markets become less, not more, predictable. So the greater the diversity of your developer population, the greater the diversity of the ideas and options that are available to you. Adopting an open-source strategy and inviting lots of brains to think along with you, will increase the chances that you'll develop features that customers want to use.

Much to my amazement, one of the companies that has taken the most aggressive lead in this area is IBM. I've been around the hacker culture long enough to remember the time before Microsoft, when IBM was the great enemy. But now it's a major backer of Apache. It's got an internal unit called AlphaWorks, whose charter includes a mandate to find stuff inside IBM that can be open-sourced and to make that happen. Why would IBM embrace these ideas? Because it decided years back to reinvent itself as a services company -- and it's been pursuing that strategy ever since. IBM understands that its only real advantage is the brains and energy of its people. When it comes to intellectual property, what matters today is the intellectual part, not the property part. A world in which there are no secrets is a world in which companies can't compete on the basis of secrets, but on the basis of service: Do you have the best people solving your customers' toughest problems?

William C. Taylor (wtaylor@fastcompany.com) is a founding editor of Fast Company. Contact Eric S. Raymond by email (esr@thyrsus.com), or visit his Web site (www.tuxedo.org/~esr), which includes his white papers, as well as resources on and links to the open-source community.