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Closed for Business?

There’s a very interesting article in today’s Wall Street Journal titled, “Is It Better for Businesses to Adopt Open or Closed Platforms?”

While “open” systems have been seen as driving competitive advantage over the past decade or so, the article speculates that Apple’s success is evidence that, perhaps, closed systems are more competitive.

The article pits two experts who debate the issues involved. Harvard Law professor Jonathan Zittrain defends the classic ubiquity argument—“with open systems, a company can court far more usage and mind share.”

Frog Design’s Mark Vandenbrink, in his best “Jane, you ignorant slut” voice, retorts that Apple’s closed system gives the company a competitive advantage by creating “a more perfect experience” for its customers.

Who’s right? They both are. Apple proves closed systems work. Red Hat proves that open systems work. Both can drive competitive advantage. The idea that one strategy is right and therefore one strategy is wrong is flawed.

Instead of falling for that argument, let’s note that these systems are ‘creative/innovation’ systems—not software ‘development’ systems. This is a more self aware mode of comparison and from this perspective we can choose to make trade offs based on which design system will align better for our specific strategy.

Apple’s closed system worked because the company embraced a high-level commitment to design thinking and design-as-form. The systems and artifacts they designed were created to be beautiful and highly ‘human’ (as opposed to engineered technology). Frog Design is an expert in this form of design. But this ‘closed’ system is very expensive, highly dependent upon one powerful, ‘visionary’ design leader. Few businesses possess such committed leadership.

On the other hand, design has always been a competitive strategy chosen by desperate players. It’s easy to forget now, but as recently as six years ago Apple was anything but a lock to survive. Much less thrive. With Microsoft enjoying 96% of the market, Apple was a desperate company.

Thankfully for Apple shareholders and fans alike, Jobs was the man for the job. His early exposure to design, coupled with finding his design soul mate, created the opportunity to succeed. But it was a highly risky strategy. And one that could have easily failed.

Red Hat shareholders and fans know that open systems also drive a competitive advantage. Indeed, Red Hat is proof positive that a small company with nothing to lose can use open strategies to great success. With competitors like Microsoft, Oracle, Sun Microsystems and Novell (remember them), this small player has become a billion dollar company…selling ‘free’ software. That’s a pretty compelling story on the competitiveness of openness.

It’s only fair to note that Apple has utilized more open strategies with its open iPhone application creative process. Less known is the fact that Apple operating systems have, for years, been based on the same open development community-driven processes that Red Hat’s enterprise software uses—even Apple didn’t start from scratch.

In the end, both companies succeeded because of the disciplined and courageous leadership of two non-conformist business leaders who shared an inherent (though differing) belief in ‘design’—Steve Jobs and Matthew Szulik. Fortunately for me, I had the opportunity to work directly with one of these men. And every day I enjoy the products and services the other helped create.

Open or closed? Yes.

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