OPEN INNOVATION CHANGES ALL OF THE RULES
Never before has open innovation been as much a part of software development as it is today. Open-source software has become central to virtually all digital strategies influencing every layer of the tech stack, from operating systems and programming languages to middleware and development tools.
Meanwhile, commercial open-source companies like Red Hat, Docker and many more, along with the cloud vendors, have turned open-source software into viable commercial products. Together, these forces have commoditized software development, shifting the speed, scale, and economics of innovation by offering powerful infrastructure and development capabilities without players having to invest enormous amounts of capital up front.
Embracing open innovation in B2B domains has been much slower in its evolution than in the consumer world. And yet, many of societies biggest challenges are more B2B focused – smarter management of finite resources, including climate change and renewable energy, as well as sustainable management of air, water, food resources and waste. However, product OEMs and machine builders work with software developers and solution players in a much more “command and control” mode and have largely forged only simple relationships with wireless carriers, enterprise applications or professional services providers. Open innovation does not work “by invitation only,” rather it is rapidly moving to self-service and open collaboration.
Open innovation will force the industrial behemoths to embrace open-source software and collaborative developer communities. But sadly, most OEMs that we speak with fail to see the evolving relationship between these two dimensions as fertile ground for innovation. OEMs need to understand that new open software tools and open collaboration need to be interwoven and mutually supportive to effectively leverage their combined potential.
The B2B and industrial software business cannot continue to do this the way they’re doing things now. The days of combining existing monolithic applications with new “cloud veneers” and SaaS delivery are over. Applications are now distributed and dynamic in nature, needing to work across different cloud configurations, diverse locations and devices. Software development needs a completely new approach – one where open-source software development tools and libraries are modular and interchangeable and where applications can be decomposed into microservices and components that can be assembled and then re-used. New development frameworks will need to simplify application development and shorten time to market by better organizing developer tools and run-time support for multi-cloud, edge/IoT applications, new multimodal user experiences and application-specific hardware devices.
What’s required are orchestration tools that creatively combine multiple innovations in cloud infrastructure management, workflow automation and data application development to reduce complexity and better leverage the architects, developers and integrators across ecosystems. The “walled gardens” of the B2B industrial and OEM software business will inevitably need to collapse.