Time for businesses to open up - or else

Businesses will fail if they don't embrace open technologies and information

Businesses can't hide in this dawning era of openness - nor should they want to, says Jim Mortleman.

Does your organisation work to keep people, processes and information walled off from the wider web, or does it seek to embrace open technologies, open collaboration and open information?

Most are either mixed-up about which side they're on, or unaware this is one of the most fundamental decisions they face. Those who fail to make significant strides towards the open camp - whether due to defensive manoeuvring, fence-sitting or inertia - may be digging a trench that becomes their tomb.

Open collaboration has already transformed the competitive landscape in IT and the information industries. From humble geek beginnings, the open source and free software movements have steadily eroded the dominance of paid-for software to the point where consumers now expect many applications and basic online services to be free.

Today, the web hosts an ever-increasing range of open informational resources - from the growing body of content licensed under Creative Commons, to the collaboratively produced online encyclopaedia, Wikipedia - the success of which prompted Microsoft to abandon development of its commercial equivalent Encarta earlier this year.

The number of devices and people online is increasing exponentially, as is the information they generate. Extracting new meaning from all this information, and presenting it in increasingly customised ways, offers untold opportunities for business and social innovation - and the greatest innovation occurs when data is open for people to use as they choose.

Companies such as Twitter, for example, found opening up systems and data to the web - allowing third parties to develop new interfaces and applications on diverse platforms - made their services ever more functional, accessible and attractive to users.

Tim Berners-Lee's Linked Data campaign aims to spread the benefits of openness even wider. With a cry of "Raw data now!", the father of the web is encouraging organisations to put all public and non-sensitive data online in an open, machine-readable format, so people can use it to build innovative and valuable new products and services.

Google similarly understands its success depends not on locking in users or closing off what they can do but on enabling them to find and organise information (and, increasingly, human effort) in ways that make them ever more productive and fulfilled.

The company also realises, as do most online start-ups, that if you open up your processes - allowing your users and other outside collaborators to become co-creators of your products and services - you can build even better stuff, even faster.

But such opportunities will ultimately only be realised by those participating in this open era, not those fighting against it.

Today the battle is seen most starkly in the way traditional entertainment giants like Viacom and the Recording Industry Association of America are using the combined might of marketing, technology and the law to protect their position and stifle openness. Compare this with open content distribution services such as YouTube and streaming music sites like Last.fm and Spotify, which are working to develop viable commercial models that let people freely consume and share music and video.

It's only a matter of time before the open imperative hits every sector, as some of the world's biggest companies are already realising.

Earlier this year pharmaceuticals giant GlaxoSmithKline put hundreds of formerly closely guarded patents into an open 'patent pool', to encourage collaborative development of cures for some of the world's most deadly diseases.

Similarly Proctor & Gamble is several years along the road with an open innovation strategy called Connect and Develop that actively encourages collaboration on new ideas, both across and outside the organisation.

In a recent talk on his book What Would Google Do?, author Jeff Jarvis says every business has to realise "success in the future won't come from controlling the scarcity of things but by becoming a network or platform", helping people do what they want as easily, cost-effectively and enjoyably as possible.

For example, he suggests an 'open' car company of the future might release its specs and allow buyers to design their own vehicles, selecting parts and bolt-on services from the community of providers that springs up to offer seats, dashboards, paint-jobs and other custom elements.

Wilfully closed businesses hope the law will continue to shore up their position. But as the Googles of this world grow in dominance, so does their influence over how business and regulatory frameworks develop. In addition, increasing public visibility of companies' behaviour through online collaboration and information-sharing means there will be no hiding place for those employing closed, anti-customer strategies.

Whether you like it or not, your actions will become increasingly transparent and open to criticism. And if your business's ears remain closed, it will only hasten your reputational - and ultimately commercial - downfall.

Jim Mortleman is a business and technology writer, commentator, consultant and speaker. He writes a blog, The New Game.