Openness as a Competitive Advantage for Hardware and Manufacturing Eco-Systems

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Discussion

Excerpted from Simone Cicero:

"Let’s think to Apple for a while: it’s by far one of the most successful product and user driven innovation ecosystems of the computing history. Despite its software is open at least in terms of interfaces (APIs), Apple keeps its hardware strongly closed, also using non-standard interfaces, for example in power cables. By keeping it’s hardware and Operating System closed, Apple succeeded to create relevant profits because if you wanted to access the power of the ecosystem they nurtured in years you need to buy their hardware and pay for your access to the IDE.

On the other hand, we have another exemplary company, that it’s still small now (per respect to Apple) but that pushed the openness approach to a more relevant layer. We are talking of Arduino: Arduino is basically a fully open source platform (HW and SW) and uses a different approach to generate the profits that are needed to its sustainability and improvement: it only monetizes a brand and story. This brand was built on top of years of community consensus and discussion and it’s now an incredibly valuable asset for the company, as it’s completely built on trust and community.

As you can see there’s a lot of difference and the first one may be in one key approach: competition. Apple now suffers the competition of a more open platform, Android, and we can’t see it’s not market leader anymore. Arduino, instead, it’s dominating its industry, exponentially growing and de facto established as a “standard” interface. Newbies look for Arduino, not SOC in general, Arduino is effectively everywhere and you can think to make basically everything out of it with its growing portfolio of boards.

By being open souce and, plus, a pioneer of its market, Arduino not only established as the market leader (at least in DIY hacking) but also became a key resource and a base brick of further innovations. As a result of being the preferred interface, Arduino is now everywhere and it’s really difficult to position products that compete with it. From its privileged point of view, Arduino team is also able to monitor use cases that “developers” (makers?) worldwide are testing and, eventually, introduce products that are more in line with customer expectations and needs. Would this be possible if Arduino wasn’t open hardware? I don’t think so: people who would not have otherwise had the chance to hack it, to eventually adhere their expectations and use cases.

This peculiarity of being truly and entirely opensource made Arduino itself super resilient: the company relies, in fact, on super strong bonds between the brand (and all it represents) and the users, making very difficult the idea of users migrating to another development environment.


It should be clear at this point in the post, that openness in hardware can be used as a powerful tool to conquer emerging markets: being a first mover in open source, in a potentially huge hardware related market, gives you a great possibility to build a strong community of interests and innovations through openness. What is your venture supposed to give in exchange of this appreciation? Some of your profits. Let’s make it clear and plain: open source hardware companies such as Arduino or RepRapPro are ruling their reference markets by means of empowering others to create other companies, products and profits.

Despite your company cannot grab all the profits around your ecosystem, the overall size of it is can be huge even if profits are not concentrated in your hands, in that of a single players: these ecosystems grow horizontally and eventually become more secure and long term resilient as they transform in a common interface a common base for innovation." (http://www.open-electronics.org/using-open-source-hardware-to-conquer-new-markets/)