The word gambit stems from the Italian 'gambetta' which means: setting a trap. A gambit is a chess opening, where something is sacrificed in order to achieve a better position. Usually, the piece sacrificed is a pawn, but there are also gambits sacrificing a Bishop or Knight. Usually, the player who sacrifices something gains time or active piece play. A few days ago, IBM announced that it will offers 500 patents for open-source use, the event was well commented across the blogosphere:
Steve Lohr reports that IBM is open sourcing 500 patents.
Joi Ito noted that
They're not the first to take this strategy. I recall Intel doing something similar, pooling patents around development using their chips so that developers could more easily create software without bumping into each other. Companies fight for intellectual property protection for self-interest arguing that without it, people will not innovate. On the other hand, many platform providers know that patents often encumber innovation. With software patents in particular, I believe that they stifle innovation more than they create incentives, especially for small companies. It's nice to see patent giants like IBM taking steps like this.
But the best analysis in my mind comes from the Business Week great article describing the gambit :
Why would IBM allow others to use its intellectual property free of charge?
In a word: Microsoft. The move is central to IBM's efforts to fend off Microsoft and its Windows monopoly. While the computing giant will continue to innovate and gather new patents as aggressively as ever, at the same time it is stepping up efforts to bolster the world of open-source software. IBM figures that doing so will give it a leg up in selling the software and services that work with the open-source programs it helped develop........ It's striking how different IBM's strategy is from Microsoft's. Microsoft, which declined to comment, is building a legal team to enforce intellectual-property claims. In so doing, it hopes to protect its monopoly: When makers sell PCs and servers loaded with Windows, Microsoft has the best shot at selling an array of applications. IBM has a different tack. In a strategy it calls "collaborative innovation," it shares some of its intellectual property, hoping to bolster open-source alternatives to Windows, such as Linux. Such programs are shared by thousands of companies and tens of thousands of programmers...
About 4 years back, we were making a presentation on Nokia's prospects for an end-term exam. While all the other teams were excited and upbeat about Nokia's prospects, we were the only team which had some doubts. Our central theme was that innovation (expecially the disruptive sort) always happens in fringes; add to this the fact that today we are throwing out most industry definitions, it will be impossible for any company (even if it is a market leader) to get its arms round innovation.
I see the same dynamic at work here. Consider the enterprise IT market; broadly, I see 3 tiers: infrastructure, software & services. Now look at IBM; the highlight of IBM for the past few years has been services. But the unsung heros of IBM were in infrastructure. I was part of the corporate strategy team of an Indian IT services major a couple of years back; all our problems arose from the fact that IBM had a stranglehold on all key accounts because of their infrastructure work & sales.
Now, by giving away some patents, IBM seeds software innovation in the one disruptive model of software industry: open source. Like you said, this weakens Microsoft, while at the same time setting up the field nicely for IBM to waltz in with its infrastructure and services offerings.
Posted by: Srini | January 18, 2005 at 09:21 PM