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Platform Leadership in Open Source Software Platform Leadership in Open Source Software By Ken Chi Ho Wong Bachelor of Science, Computing Science, Simon Fraser University, 2005 SUBMITTED TO THE SYSTEM DESIGN AND MANAGEMENT PROGRAM IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN ENGINEERING AND MANAGEMENT at the MASSACHUSETTS INSTITUTE OF TECHNOLOGY February 2015 ©2015 Ken Wong. All rights reserved. The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or in part in any medium now known or hereafter created. Signature of Author: ___________________________________________________________ Ken Wong System Design and Management Program February 2015 Advised by: ___________________________________________________________ Michael Cusumano SMR Distinguished Professor of Management & Engineering Systems MIT Sloan School of Management Certified by: ___________________________________________________________ Patrick Hale Director, System Design and Management Program Massachusetts Institute of Technology Platform Leadership in Open Source Software This page is intentionally left blank. Platform Leadership in Open Source Software By Ken Chi Ho Wong Submitted to the System Design and Management Program on February 2015, in Partial Fulfillment of the Requirements for the degree of Master of Science in Engineering and Management. Abstract Industry platforms in the software sector are increasingly being developed in open source. Firms seeking to position themselves as platform leaders with such technologies must find ways of operating within the unique constraints of open source development. This thesis aims to understand those challenges by analyzing the Android and Hadoop ecosystems through an augmented version of Porter’s Five Forces framework proposed by Intel’s Andrew Grove. The analysis finds that platform contenders in open source behave differently depending on whether they focus on competing against alternative platforms or alternative providers of the same platform as rivals. This focus informs key decisions that the firm takes, including how it interacts with complementors and its approach to innovation. Due to the fact that open source vendors tend to lack unilateral authority over technology decisions, they can only seek to influence the behavior of the ecosystem by securing key relationships in the value network. In particular, they must secure the right engineering talent, access to key complements and superior paths to the customer. The research highlights some of the factors and tactics platform contenders in Hadoop and Android considered in acquiring these relationships. The open nature of FOSS (Free and Open Source Software) also allow new technologies to emerge and change the definition of the platform’s boundaries. This creates a further strategic challenge for open source platform contenders. Keywords: platform strategy, platform leadership, open source software, Hadoop, Android Thesis Supervisor: Michael Cusumano Title: SMR Distinguished Professor of Management & Engineering Systems MIT Sloan School of Management i Platform Leadership in Open Source Software This page is intentionally left blank. ii Acknowledgement This thesis was made possible by a number of individuals who generously shared their time and expertise with me. There are only a few names on the cover of this document, but the content within contains the wisdom and contributions of so many more. I would especially like to thank Professor Michael Cusumano for his guidance and advice throughout the entire journey. The breadth of his knowledge and depth of his insights on all things related to platform strategy is simultaneously humbling and inspiring. My understanding of the Hadoop ecosystem was greatly informed by a number of enlightening conversations I’ve had with the thought leaders of that market. I am tremendously grateful to Rob Bearden (CEO of Hortonworks), Ron Kasabian (GM of Big Data at Intel) and Mike Olson (Founder and Chief Strategy Officer of Cloudera) for taking time to indulge the curiosity of a student. The case study that sits at the heart of this thesis would not have been possible without their assistance. The time I spent at MIT was also enabled by the fantastic support I received from my colleagues in SAP’s Analytics Division. In particular, I would like to thank Jesse Calderon, Don Wakefield and Michael Reh for their sponsorship and encouragement during the past two years. Though I am no longer a part of SAP, I will take the many things I’ve learned from these leaders forward with me. The same goes to Pat Hale and the fantastic staff of the SDM program. Finally, I would like to thank my family for their unwavering support and many sacrifices that made it possible for me to complete my studies. To my amazing wife Sharon and the active bundle of joy that she is currently carrying in her tummy: Completion of this program is made even sweeter by the knowledge that I now have more time to spend with you. Your love is a true blessing from God. iii Platform Leadership in Open Source Software This page is intentionally left blank. iv Table of Content Abstract ................................................................................................................................ i Acknowledgement ............................................................................................................. iii Table of Content .................................................................................................................. v Introduction ......................................................................................................................... 1 Approach and Structure ...................................................................................................... 3 Chapter 1 – Literature Review ............................................................................................ 5 Network Effects .............................................................................................................. 5 Product vs. Industry Platforms ....................................................................................... 7 Two-Sided Markets ......................................................................................................... 7 Topology of Platform Roles and Openness in a Platform-Mediated Network ............... 9 Platform Leadership and the “Four Levers” Framework ...............................................11 Lever 1: The Scope of the Firm .................................................................................11 Lever 2: Product Technology .................................................................................... 12 Lever 3: External Relationships ................................................................................ 12 Lever 4: Internal Organization .................................................................................. 13 Platform Establishment and Displacement ................................................................... 13 Open Source Software .................................................................................................. 16 Commercial Interest in Community-driven Development ........................................... 16 Related works on Commercial Open Source ................................................................ 20 Chapter 2 – Strategic Considerations for Open Source Leadership ................................. 23 IBM and Eclipse ........................................................................................................... 24 The Definition of Open Source Leadership .................................................................. 26 v Platform Leadership in Open Source Software Google and Android ...................................................................................................... 30 Rivalry – Inter-network vs. Intra-network Competition ............................................... 34 Suppliers – Securing the Upstream Value Chain .......................................................... 38 Complementors – Identifying and Securing Critical Complements ............................. 43 Buyers – Controlling the Path to the Customer ............................................................ 45 Substitutes and New Entrants – The Threat of Shifting Platform Boundaries ............. 49 Chapter 3 – A Case Study on Hadoop ............................................................................... 57 History and Origins ....................................................................................................... 57 Hadoop and the Big Data Phenomenon ........................................................................ 59 The Relational Database ........................................................................................... 60 Hadoop to the Rescue ............................................................................................... 61 Architectural Overview ................................................................................................. 64 Distributed Storage ....................................................................................................... 65 Job Managers and Coordinators................................................................................ 65 Distributed Processing Frameworks ......................................................................... 66 Scripting Engines, Libraries and SQL
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