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Code Keiretsu

Thursday, February 9, 2006 - 09:52 by Mike Milinkovich

Simon Phipps wrote an interesting blog post musing about the how the Japanese business model of interlocking companies (keiretsu) and the long tail intersect to describe the functionings of open source communities. Basically, the idea is that open source communities can be described as “code keiretsus around a long tail of applications”.

For those interested, the “long tail” theory first appeared in Wired Magazine and points out that in the new digital world, a great deal of money can be made servicing markets that would have previously been uneconomic due to low volumes. Anyone interested in learning about how this idea applies to Eclipse should go see Carl Zetie’s talk at EclipseCon.

Although the metaphors are interesting, I think the analysis falls apart in one place, where he says:

So how do these ideas relate? By combining them, we have a potential model for certain kinds of open source community such as GNOME, Apache and Eclipse.
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This “code keiretsu” is unlikely to include direct competitors, but will include a diverse array of interests serving many points in a target deployment system.

It is around the area of competitive co-operation that I think that the idea needs some polishing. Specifically, Eclipse stands out as an example of where direct competitors are not only participating, they are doing so within the bounds of specific projects such as Web Tools (BEA, IBM, JBoss, Oracle) and Data Tools (Sybase, IBM) to name but two examples. What we’re seeing at Eclipse is very much the diverse array of interests that Simon expects, but the experience shows that the model needs to be be extended to include direct competitors as well.

As regular attendees to the Eclipse Members Meetings are aware, Siobhan O’Mahony from Harvard Business School has been doing research on the new business models that Eclipse is bringing to the forefront. Her ideas around Competing on a Common Platform seem closer to the mark than code keiretsu, despite the fact that the latter is so much cooler as a label.

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