Stop looking for exciting new features for your OSS

The iPhone disrupted the handset business, but has not disrupted the cellular network operators at all, though many people were convinced that it would. For all that’s changed, the same companies still have the same business model and the same customers that they did in 2006. Online flight booking doesn’t disrupt airlines much, but it was hugely disruptive to travel agents. Online booking (for the sake of argument) was sustaining innovation for airlines and disruptive innovation for travel agents.
Meanwhile, the people who are first to bring the disruption to market may not be the people who end up benefiting from it, and indeed the people who win from the disruption may actually be doing something different – they may be in a different part of the value chain. Apple pioneered PCs but lost the PC market, and the big winners were not even other PC companies. Rather, most of the profits went to Microsoft and Intel, which both operated at different layers of the stack. PCs themselves became a low-margin commodity with fierce competition, but PC CPUs and operating systems (and productivity software) turned out to have very strong winner-takes-all effects
.”
Ben Evans
on his blog about Tesla.

As usual, Ben makes some thought-provoking points. The ones above have coaxed me into thinking about OSS from a slightly perspective.

I’d tended to look at OSS as a product to be consumed by network operators (and further downstream by the customers of those network operators). I figured that if our OSS delivered benefit to the downstream customers, the network operators would thrive and would therefore be prepared to invest more into OSS projects. In a way, it’s a bit like a sell-through model.

But the ideas above give some alternatives for OSS providers to reduce dependence on network operator budgets.

Traditional OSS fit within a value-chain that’s driven by customers that wish to communicate. In the past, the telephone network was perceived as the most valuable part of that value-chain. These days, digitisation and competition has meant that the perceived value of the network has dropped to being a low-margin commodity in most cases. We’re generally not prepared to pay a premium for a network service. The Microsofts and Intels of the communications value-chain is far more diverse. It’s the Googles, Facebooks, Instagrams, YouTubes, etc that are perceived to deliver most value to end customers today.

If I were looking for a disruptive OSS business model, I wouldn’t be looking to add exciting new features within the existing OSS model. In fact, I’d be looking to avoid our current revenue dependence on network operators (ie the commoditising aspects of the communications value-chain). Instead I’d be looking for ways to contribute to the most valuable aspects of the chain (eg apps, content, etc). Or even better, to engineer a more exceptional comms value-chain than we enjoy today, with an entirely new type of OSS.

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