The Thanksgiving holiday has given me the opportunity to consider the critical new role of collaboration in innovation. This role was emphasized to me during a single day, November 17, in Silicon Valley. In the morning, I attended the Cloud Computer Expo and speaker after speaker, from Cisco to HP, discussed how OpenStack software was critical to their success in cloud computing and was transforming cloud computing industry. OpenStack software to enable cloud computing is being developed under the management of the OpenStack Foundation in a collaboration of over 150 companies. The OpenStack project was started by NASA and Rackspace, but was recently reorganized as a foundation to take over the funding and management of the project www.openstack.org (as a matter of transparency, I represent the OpenStack Foundation). I think that such collaborations will be increasingly critical for the future because many business problems are too complicated to be effectively solved by a single company. For example, the auto industry has joined with the consumer electronics industry to form a collaboration for entertainment systems in automobiles, the Genivi Alliance http://www.genivi.org/.
At the end of the day, I attended the Sierrra Ventures CIO Summit cocktail party (yet another good reason to have Sierra Ventures as an investor) and Jed York of the 49ers was discussing the role of technology in the new Santa Clara stadium (it sounds like it will be spectacular). Yet he also focused on the need to encourage collaboration with the Silicon Valley community to take advantage of the possibilities presented by the technology infrastructure of the new stadium.
From cloud computing to sports, collaboration has become central to business success in the 21st century.
The recent Intellectual Property Business Congress in San Francisco was very interesting and demonstrated the increasing importance of intellectual property of business http://www.ipbusinesscongress.com/2011. The speakers ranged from Judge Rader (Chief Judge of the Court of Appeals of the Federal Circuit) to Ruud Peters (Chief Innovation Officers of Philips NV). Many speakers emphasized the critical nature of intellectual property in developing products because most new products are the result of collaboration among many parties. The rise of the need for collaboration in developing products ranges across all industries, from smartphones to automobiles.
Smartphones are a dramatic example of collaboration: the bill of materials for the iPhone shows that Apple only provides the operating system for the device. Android represents another step in this evolution where even the operating system is provided by a third party. The disruptive nature of these new reality is demonstrated by the dramatic fall of Nokia’s market share in smartphones (I discussed these issues in more detail in my presentation on the new rules of innovation at the IBF Corporate Venture and Innovation conference in February http://www.docstoc.com/docs/83629007/Managing-Innovation-for-Global-Entrepeneurs-and-Large-Companies).
At the conference, Frank MacKenzie, IP Counsel from Ford Global Technologies, stated directly that intellectual property at Ford has a much higher profile. He described how the automobile industry has changed dramatically recently because of the integration of a much greater amount of third party technology into new cars; he mentioned Sync and Mytouch as technologies which Ford has licensed from third parties. Even in the traditional automobile business, he noted that intellectual property is very important: he described how the sale of Volvo was initially viewed as the transfer of “hard” assets and a brand, but it became clear during the negotiations that intellectual property relating to the car manufacturing was a critical element of the deal for the buyer.
The most interesting presentation was by Ruud Peters, the Chief Innovation Officer of Philips NV, who described that evolution of the integration of intellectual property into business at Philips over the last twelve years. At the beginning, intellectual property was viewed as a “defensive” asset, but intellectual property is now a key part of all business strategies developed at Philips. His summary of the new attitude was: “Business strategy without an IP strategy is not a business strategy”.