Open Innovation Gets a FAIL with Mobile Developers

Is Open Innovation Working?Put your money where your mouth is for open innovation.

I first wrote about the rise of ‘open’ and open innovation over 2 years ago (and one blog ago). The premise of Open Innovation is about dropping the mentality of ‘not invented here’; and to collaborate with outside partners. I said back in May 2007, “We are now entering the next phase of Open Innovation in the form of user input and the proliferation of communities. The challenge is how to identify the great opportunities and exploit them in a collaborative way.

We decided to benchmark Open Innovation to gauge if it is actually working for developers in our mobile and wireless community:

1. Open is Socially Acceptable = PASS

The term openness and the realization of collaborating with others is now mainstream. Even the big operators who had a tough time embracing it, and then implementing it are really starting to do a good job. A good example is the JIL initiative between Vodafone, Verizon, China Mobile and Softbank to create a platform for developers to initially distribute widgets between these operators.

2. Growth in Open Source = PASS (Conditional)
Open source along with being socially acceptable is truly seeing some great strides. The LIMO Foundation has launched their first device, Symbian has turned into an open source foundation, and even Google has since launched the Open Mobile Alliance and Android.  I give this a conditional pass, as there is still controversy with these initiatives as to how ‘open’ they actually are – time will tell.

3. Open APIs = PASS (and then some)
This is one area that I certainly didn’t predict would grow as large and fast as it has. It’s not just the APIs of our operators, and platforms; but the  proliferation of open APIs from most large software platforms like Facebook and Twitter, and many smaller ones as well – all looking to capitalize on the creativity of 3rd party mobile developers to grow the usage of their platforms and tools. It’s no wonder firms like Mashery, who provide the technical know-how to open the APIs, are seeing great success.

4. Creation and Rise of App Stores = PASS (Conditional)
Open Innovation has definitely given rise to the era of App Stores. The big companies are pushing innovation down the value chain and providing opportunities for the smaller companies to have a smoother path to market. The competition with App Stores has increased revenue share for developers, and the number of options go to market opportunities available. We are very pleased to see this happening, but there is still much work to be done on the submission process, discoverability, and billing to make it really pay off for developers.

5. Rise in Developer / Partner Programs = Pass (Conditional)
As open innovation demands the need to play nice with other companies, the need to provide programs to work with developers and partners has risen exponentially. We applaud those who have put programs in place – it’s an imperative. However, I don’t think that enough thought or resources go into most programs. As you push the cost of innovation down the value chain, you can’t expect the 3rd parties to bear the brunt of the technical/resource costs of creation and also try to sort out how to access your open door and interpret your rules.  You’ve got to play nice too.

6. Rise in Developers = PASS
Rise in Developers Making Money = FAIL

I predicted the rise in developers along while ago, which in part led to founding of WIP.  Since then, we have continued to see a rise in numbers of developers and types of developers (traditional and now more content/web developers joining the party). This is due to all the above points; and of course the rise in acceptance of mobility by the general public (about time! from those of us that drank the koolaid over a decade ago).

Certainly there are more opportunities now for developers of all types to innovate and find paths to market. As well there are many developers that do have a revenue stream. For these reasons we give Open Innovation a big PASS.

However, for developers’ own ROI we still give Open Innovation a FAIL for the following reason: the risk and inherent cost of innovation is being pushed down the value chain to the group that can least afford it. The mobile and wireless industry is a trillion dollar industry, one of the largest in history and the world. The operators and the OEMs are making very hefty returns. But it is very much a have/have not world. Developers still struggle to make sustainable revenue and secure investment.

We think there are ways for the developers programs to mitigate risk and increase opportunities for the dev program and developers alike as follows:

  • Sharing of more subscriber information with developers so they don’t have to guess if their applications are working or where the best opportunities are.
  • Stop charging developers to participate in your programs or conferences. It is already costly for them to travel to these events. As well, it is not a wise practice for developers to be exclusive, so you are not the only event for them to attend.
  • Engage and pay for co-creation of new applications and platforms.
  • Additional marketing/go to market advice for developers.
  • Create more variable revenue share  models based on developer participation and your additional value to promoting their applications (just creating a store front may not be worth 30%).

What did we miss?

WIP looks forward to working with the mobile developer community for better opportunities; and we look forward to your comments!

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