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Google’s Jonathan Rosenberg on Open Systems

Lawrence D'Oliveiro
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Which do you focus on, the customer’s needs or the company’s?

To understand our position in more detail, it helps to start with the
assertion that open systems win. This is counter-intuitive to the
traditionally trained MBA who is taught to generate a sustainable
competitive advantage by creating a closed system, making it popular,
then milking it through the product life cycle. The conventional wisdom
goes that companies should lock in customers to lock out competitors.
There are different tactical approaches — razor companies make the razor
cheap and the blades expensive, while the old IBM made the mainframes
expensive and the software … expensive too. Either way, a well-managed
closed system can deliver plenty of profits. They can also deliver well-
designed products in the short run — the iPod and iPhone being the
obvious examples — but eventually innovation in a closed system tends
towards being incremental at best (is a four blade razor really that
much better than a three blade one?) because the whole point is to
preserve the status quo. Complacency is the hallmark of any closed
system. If you don’t have to work that hard to keep your customers, you

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On Wed, 23 Dec 2009 12:44:14 +1300, Lawrence D'Oliveiro wrote:

> while the old IBM made
> the mainframes expensive and the software … expensive too.

And, interestingly, IBM is now the only player left in the mainframe sector.

They must be doing something right - especially when you consider the sheer size of that company. It
makes Microsoft look comparatively tiny!

"Filtering the Internet is like trying to boil the ocean"
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