Strategizing with Hardware Rich Open Source Ecosystems

Companies are increasingly adopting open source strategies to develop and exploit complex infrastructures and platforms that combine software, hardware and standard interfaces. Such strategies require the development of a vibrant ecosystem of partners that combines the innovation capabilities of hundreds of companies from different industries. Our aim is to help decision makers assess the benefits and challenges associated with creating or joining such ecosystems. We use a case study approach on six major collaborative ecosystems that enable the development of complex, high cost infrastructures and platforms. We characterize their strategy, governance, and their degree of intellectual property (IP) openness. We offer a three-dimensional framework that helps managers characterize such ecosystems. Although all the ecosystems studied aim at scaling up innovative solutions, their strategy, governance and IP openness vary. An upstream strategy aimed at replacing supplier proprietary design with open substitutes requires a democratic governance and an intellectual property policy that maximize the attractiveness of the ecosystem. A downstream strategy aimed at carving a space in new markets requires an autocratic governance and an intellectual property policy that combine attractiveness and value capture opportunities.