The Meaning of Open: Defensibility & Competition in the Tech Industry

The Meaning of Open: Defensibility & Competition in the Tech Industry

In the early 19th century, the U.S. faced a challenge when it came to railway tracks. There were seven different standards for track width, which hindered the expansion of the railroad network. It wasn't until the railway companies agreed upon a standard width of 4' 8.5" that the network was able to flourish and expand west. This historical example teaches us an important lesson: open systems win. At Google, we firmly believe in the power of open systems, as they lead to more innovation, value, and freedom of choice for consumers, as well as a vibrant and competitive ecosystem for businesses.

For us, the meaning of open encompasses two key components: open technology and open information. Open technology includes open source, where we release and actively support code that helps grow the Internet, and open standards, where we adhere to accepted standards and work to create new ones that benefit the entire Internet, not just Google. Open information, on the other hand, means that we use user information to provide them with valuable services, we are transparent about the information we collect, and we give users ultimate control over their personal data.

The conventional wisdom in business suggests that companies should lock in customers to lock out competitors. While this strategy may deliver short-term success, it often hinders innovation in the long run. In a closed system, the focus is on preserving the status quo rather than driving meaningful change. In contrast, an open system allows for fast innovation and thought leadership. The successful company in an open system is both a fast innovator and a thought leader, attracting customers through their brand value and retaining them through continuous innovation.

Open systems also foster innovation at all levels, not just at the top. They allow for growth and competition across the entire industry, stimulating economies of scale and reducing costs for all competitors. In our industry, a 10 percent increase in industry value can have a significant impact, driving productivity and innovation. This is why we strive to keep the Internet open, promoting choice, competition, and innovation.

To achieve this, we rely on open technologies and open information. We actively contribute to open source projects, making our code available for others to use and build upon. We also prioritize transparency with our users, making it easy for them to understand what information we collect and giving them options and control over their data.

However, there are risks associated with open source. When code is open, it can fragment into different branches that may not work well together. Despite these risks, our goal is to promote the open Internet, even if it means potentially losing control over our code. The benefits of openness outweigh the challenges.

When it comes to open information, our approach is to build trust with our users, partners, and customers. We prioritize creating valuable products and making it easy for users to understand what information we gather and how it's used. Transparency and user control are key to building trust and maintaining a thriving ecosystem.

In conclusion, embracing openness in the tech industry is essential for driving innovation, competition, and choice. To succeed in an open system, companies must prioritize fast innovation, thought leadership, and user trust. Here are three actionable pieces of advice for companies navigating the open landscape:

1. Embrace open source: Contribute to open source projects and make your code available for others to use. This not only fosters collaboration and innovation but also ensures that your software can serve as a base for future products.

2. Prioritize transparency: Make it easy for users to understand what information you collect and how it's used. Give them control over their data and offer real options, rather than building walls around your product.

3. Think long-term: Open systems evolve more slowly than closed systems, so adopt a long-term mindset. Focus on continuous innovation, responsiveness to customer needs, and speed of execution. Embrace the challenges and rewards that come with openness.

By embracing open systems, companies can not only thrive in the tech industry but also contribute to a more innovative, competitive, and user-centric ecosystem. The future of technology lies in openness, and it's up to businesses to seize the opportunities it presents.