Glyn Moody: Open for business
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Glyn Moody: Open for business



A look at the ways in which openness of all kinds can benefit businesses.

A look at the ways in which openness of all kinds can benefit businesses.



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Glyn Moody: Open for business Glyn Moody: Open for business Presentation Transcript

  • open for business
      glyn moody
  • good news, bad news
    • good news
      • we are living through a transition that is not just ”once in a lifetime”, but *once in a civilisation*
    • bad news
      • we haven't done this before, so we don't know how to do it
  • blown to bits
    • ”once in a civilisation” transition
      • from a world of atoms to a world of atoms + bits
      • from an analogue world to an analogue + digital one
    • analogue to digital media
      • vinyl LPs to CDs
      • video tapes to DVDs
      • books to ebooks
  • the rise of the digital
    • analogue has been with us since the beginning of consciousness
    • digital has been with us *longer* - since the beginning of life
  • digital DNA
    • DNA consists of very long strings of Adenine, Cytosine, Guanine, Thymine – A,C,G,T
    • this is a *digital* code:
      • A -> 00
      • C -> 01
      • G -> 10
      • T -> 11
    • CGGTATAAT -> 011010110011000011
  • life is digital
    • complex life would be impossible without digital information
    • only digital information can be repeatedly copied faithfully
  • the re-invention of digital
    • Nature got there first several billion years ago
    • humans only got there about 70 years ago
    • specifically, Alan Turing got there about 70 years ago with his description of a Turing machine
  • there is only one computer
    • one deep consequence of Turing's work is that it proved all (sufficiently powerful) computers are essentially the same
      • they can be made to emulate any other computer
      • they can run any software written for any computer
  • there is only one computer revolution
    • not possible to limit computer advances to one particular field
    • digital's 0s and 1s do not come in different flavours
    • increase in speed, increase in capacity, decrease in size, decrease in cost affects *every* application of computing, not just one corner of it
  • there is only one Internet revolution
    • what applies to computers, applies equally to the Internet
    • improvements in transmission speed and reductions in cost apply to *all* digital data that flows across it: there is no discrimination
    • this is the essence of Net Neutrality
  • the race to the bottom
    • computer and Internet progress is a scalar quantity – its magnitude may vary, but its direction is constant – so there is an inevitable race to the bottom
    • the cost of processing anything, storing anything and transmitting anything, tends ineluctably to zero
  • of CDs...
    • first CD appeared in 1982
      • without any kind of copy protection
      • because it was impossible to copy the CD's 700 Mbytes of data: the 1983 IBM PC XT had a 10 Mbytes hard disc – less than one song
      • similarly impossible to share it across the Internet: the Hayes Smartmodem, released in 1981, had a speed of 300 bits/s – about 400 hours to upload one song
  • ...and MP3s
    • developed in early 1990s, just as Internet was taking off
    • used clever tricks to reduce music file size to 10% of original – reduced time to upload file by factor of 10
    • modem speed then 14.4 Kbit/s – less than one hour to upload/download one MP3 song: slow, but possible
  • today
    • Mbit/s broadband connection mean that entire films can now be shared
    • P2P networks like BitTorrent make it even easier to distribute those files and share them in the background
    • 1 Terabyte hard disc (1000 Gbytes) costs € 50; stores 150,000 MP3s
  • tomorrow
    • a 1 Petabyte (1000 Terabytes) USB stick will cost € 50 and store every song ever recorded in CD quality (no compression)
    • a 1 Exabyte hard disc (1000 Petabytes) will cost € 50 and store every film ever recorded
    • the race to the bottom will be over
  • absolute zero
    • the race to the bottom means any digital content can be copied and shared and hence acquired for a trivial cost that is tending to zero very rapidly
    • what does this mean for business?
  • DRM: less than zero
    • DRM is not the solution
      • DRM only needs to be broken once for content to be uploaded, copied and shared everywhere
      • DRM will always be broken at least once
      • DRM makes digital content less valuable than freely-available versions without it
      • digital content with DRM is actually worth *less* than zero
  • the law is an ass
    • ”stricter” enforcement of copyright infringement laws is also counterproductive because it's predicated on attacking your actual or potential customers
    • worse: many surveys show that unauthorised downloaders spend *more* on content - they are actually your *best* customers
    • what's left?
    • to stop sharing of digital goods there is nothing
    • the only option is to *embrace* it
    • not surprisingly, first to do so was the world of computing
    • free software/open source
    • GNU/Linux
  • what's GNU?
    • GNU born in 1983 at MIT
    • GNU is ”GNU's Not Unix” - a recursive acronym
    • one man's attempt to create a free version of the leading Unix operating system
  • a change of heart
    • by 1991, GNU was still unfinished: it lacked a ”kernel” - the heart of the operating system
    • in March 1991, 21-year-old student Linus Torvalds started writing one ”just for fun” – in his Helsinki bedroom
    • key inflection was August 1991, when he opened up his ”Linux” project using the Internet
  • opening up
    • decentralised
      • anyone, anywhere, could join in
    • bottom-up
      • people fed suggestions, problems and solutions to Linus
    • collaboration easy
      • Internet was more affordable
    • scalable
      • no formal training required – everything is out in the open
  • Linus' Law
    • Eric Raymond: ”given enough eyeballs, all bugs are shallow”
    • different people approach a problem in different ways
    • adding more people increases the probability that someone’s approach will match the problem in such a way that the solution is obvious (”shallow”) to that person
  • power, economy, reliability
    • 91% of top 500 supercomputers run Linux
      • 1% run Microsoft Windows
    • Google runs its services on millions of servers running Linux
      • so does Facebook, Twitter etc.
    • Android mobile phone system runs on Linux
      • 400,000 handsets activated daily
      • launched November 2007
  • billion-dollar business
    • Red Hat (1993)
      • annual revenue to February 2011 $909 million; profit $107 million
    • main products
      • Red Hat Enterprise Linux
      • Jboss Enterprise Middleware
    • services
      • consulting, customisation
      • technical support
      • training & certification
  • easy as nails
    • Nine Inch Nails: Ghosts I-IV
      • free – first 9 tracks
      • $5 download – all 36 tracks
      • $10 2xCD with 16-page PDF booklet
      • $75 Ghosts I-IV in a hardcover fabric slipcase containing: 2 audio CDs, 1 data DVD with all 36 tracks in multi-track format, and a Blu-ray disc with Ghosts I-IV in high-definition 96/24 stereo and accompanying slideshow
      • but that's not all...
  • $300 deluxe edition
    • 4-LP set of Ghosts I-IV on 180-gram vinyl in fabric slipcase
    • separate, large, enhanced fabric slipcase containing 3 embossed, fabric-bound, hardcover books
      • Book 1: 2xCDs, DVD, Blu-ray slideshow disc, as for $75 option
      • Book 2: 48 pages of photographs
      • Book 3: two exclusive art prints
  • sold out
    • despite the high price-tag, the Deluxe Edition sold out in two days
    • limited to 2,500 copies
    • gross income $750,000
  • getting personal
    • Jill Sobule used a donation model
      • $10 – download; $25 - advance copy of CD; $100 – these plus T-shirt; $200 – free admission to her shows for a year
      • $500 – mentions customer's name in instrumental track; $1000 – song written personally for customer
      • $5000 – comes to your house and sings for you and friends; $10,000 - *you* get to sing on her CD
  • open opportunity
    • allowing digital content to be shared freely doesn't mean it's impossible to make money
    • make money in different ways
    • but sharing digital content also brings other big benefits that can save and make money
  • open innovation
    • open development brings past and future users in early
    • offer critiques of your ideas, plus their own
    • allows collaboration with companies on pre-competitive work
  • open marketing & sales
    • when you allow digital content to be freely shared, you turn the Internet into part of your marketing department
    • best kind of marketing: word-of-mouth recommendations to friends and family
    • allows ”try-before-you-buy”
  • open products
    • builds closer links with customers
    • openness allows greater customisation
      • greater need for post-sales input and consultancy
    • digital abundance makes new kinds of revenue streams based on scarcity possible
      • human-based services
      • analogue goods
  • open culture
    • going open has many other benefits
    • encourages other companies to do the same
    • encourages other open projects
      • open content, open access, open data, open science
    • increases the knowledge commons
    • encourages open government
    • generates new business opportunities
  • open society
    • society based on openness and sharing
      • more collaborative
      • more creative
      • more innovative
      • more efficient
      • more sustainable
      • more fair
      • more happy
      • more safe
  • openness is inevitable
    • the ”once in a civilisation” transition is unstoppable – you can't ”de-digitalise” the world
    • the choice is between exploiting the resulting digital abundance by opening up...
    • ...or watching your competitors do it first – and maybe closing down
  • a binary choice
    • [email_address]