Open Source: The Key to Digital Transformation Success

Open source software (OSS) has become hot with VC’s and entrepreneurs. Peter’s Levine’s recent article “Open Source: From Community to Commercialization” includes a graph showing the increasingly large M&A and IPOs for open source companies.

There are a few reasons for OSS’s rapid adoption:

Start-ups accelerate the time-to-market of their own products
Cloud providers can offer in-demand products
Traditional IT at larger companies can replace proprietary software

But what’s missing from the discussion is how companies, especially Global 1000 companies, can leverage open source to achieve their digital transformation goals.

Unfortunately, the phrase “digital transformation” is overused and ambiguous.

Yet it is perhaps the best buzzword to describe the actual benefit of open source to these larger companies.

For this article, digital transformation primarily relates to the existential need for companies to recognize and embrace that “software eats the world.” Whether you are a bank, retailer, hospital or oil company, you are also a software company.

Making this transition to execute a strategy to stay relevant in their market is the digital transformation. The ways different companies undergo this change is as varied as weight-loss management techniques.

Some believe this transformation can be achieved by outsourcing the software development of a proprietary process or workflow.

Some try to build from scratch a “digital” muscle by hiring developers.

Some purchase new software to help them digitize and automate their business process.

Some get high-level “change management” advice that they should re-invent the company culture to be more digital savvy with little actionable implementation.

While all of these approaches can help a business, none are true digital transformations. They are various forms of “digital cosmetic surgery” or, at best “digital fad diets.”

They don’t get deep into the root of changing the business DNA to become “digitally native.”

At the heart of true digital change is authentically attracting, developing, and retaining talent that can imagine, use and build digital solutions to advance the business strategy. The actual strategies will vary from business to business, and can include introducing a new product, entering new market, streamlining an existing workflow to lower costs and prices for customers.

Regardless of the strategy, attracting the right kind of technical talent to work for the company makes the difference.

To that end, many companies anchor their digital transformation strategy in building a “developer community” as a way to both leverage external developers and attract high-quality developers to work within the company’s own four walls.

As a result, many companies follow a standard “developer relations” or “developer marketing” playbook. This includes many of these tactics¹:

Documentation & sample code
Development tools, integrations & libraries
Tutorials & how-to videos
Training courses & hands-on labs
Answers in public forums
Technical support
Official forums
Feedback channels
Professional certification
Internships & career support
Webinars & online interactive coding events
Mentoring
Access to devices & hardware
Hackathons & contests
Meetups
Early Access program
Information via newsletters, blogs, and social media
Conferences & trade shows
Business assistance & funding
Marketplaces for software or expertise

All of these add value to developers and the eco-systems — some more than others. But can a non-technology farming equipment company, for example, use the same tactics that Google or Facebook does and still build a credible developer-facing brand and work-culture?

The battle is likely to be an uphill one because, unlike software companies, the reality and perception is not that of a technically interesting place to work. At the same time, pure play technology companies are offering more and more interesting work, tackling complex problems with innovative solutions.

Against these headwinds, non-technology companies must to increase their investment and capability in the digital world.

If a given company cannot clearly articulate that they can out “dev real” a company with an already highly valued tech brand, how will they be able to do so copying the same tactics?

They need to develop a strategy that addresses what’s missing from that list of classic “developer relations” activities.

The way to do so is through strategic investment and engagement in open source, but not in the way that most people imagine.

As noted above, most people see open source as free and publicly available software.

For a smaller subset, they recognize that, if there’s something you want to fix, you can now patch it yourself and contribute it back through a pull request.

An even smaller subset think that they can take existing code, slap it on GitHub, and now they’ve given back to the open source community.

This narrative relegates open source software to “free software” and frames the value for companies to be a cost-savings against proprietary license or potentially “free” labor from friendly external code-contributors.

But these potential costs savings are almost immaterial to what’s at stake for companies to get their digital transformation working.

An alternative to either the do-it-yourself model or the change-management consulting model should have three components:

1) Authentically and sustainably engage developers
2) Advance a market position to tie outcomes to business results
3) Create a fly-wheel effect to overcome inertia to change

Engaging and investing in open source software, specifically those sponsored by healthy neutral consortia, provides that path.

A healthy neutral consortia is one where there exist multiple open source projects that have strong developer engagement by several companies, especially industry leaders. The IP doesn’t reside with any one company, and multiple companies who often compete with each other.

Here’s what it takes for companies to really transform their companies through active open source engagement.

(cont'd) here