Open Compute Project – Collaborative Competition

Major corporations whether their business is content, media, tech or finance are often, rightly, targeted by regulators who seek to limit anything that may be perceived as anti-competitive behaviour.

The presumption is that market dominance is bad, that collusion is bad and that any collaboration between huge corporations is a bad thing.

This is not always the case and in an increasingly changing world, while dominant market players should be subjected to close scrutiny collective action does not necessarily warrant intervention, regulation or restriction.

A case in point is the Open Compute Project (OCP). It came about because the major tech giants had grown so huge that they needed to look beyond typical hardware solutions for their data centres and design their own hardware from scratch. Data centre racks need to evolve, requiring more and more power to propel graphics processing, VR and AI, etc to their full potential.

Facebook was the first to recognise the benefits of open source hardware and founded the OCP in 2011. Not only would this help reduce hardware costs, but by creating standards accelerates and expands the potential for AI as it is these underlying technologies that will drive neural networks.

This was a bold move by Facebook and it has taken five years to persuade the majority of major tech players and other major institutions to come on board.

The Open Compute Project Foundation was incorporated as a non-profit organisation whose members now include Microsoft, Intel, Rackspace, Ericsson, Cisco, Juniper Networks, AT&T Goldman Sachs, Fidelity and the famously secretive Apple who joined in 2015.

Last week it was announced that Google has joined OCP, leaving Amazon as one of the last remaining tech companies not to join the project.

The conclusion is pretty clear: data centres power all of these businesses but they are not the basis on which these businesses compete. By collaborating on the foundations, the tech giants are laying the field for a higher-level game where the real competition between them will play out, i.e. who has the best solutions.

@andyedwardsbiz

Who Will Build The Music Industry’s Global Rights Database?

AE

The following MBW blog comes from Andy Edwards (pictured), Board Director of the UK’s Music Managers Forum (MMF).

The failure of the Global Repertoire Database (GRD) has left many people scratching their heads, wondering how such a huge problem can ever be solved.

Optimists such as Benji Rogers and the Berklee College of Music team point to Blockchain technology as the way forward.

Blockchain has huge potential, but there is still the question of how such a solution is organized, financed and administered.

The original GRD working group was put together by the EU and involved a wide variety of participants including Apple, Amazon, Google, various Collective Management Organizations (CMOs) and music publishers.

Given the GRD had the potential to benefit so many, it was disappointing that the cost of developing the GRD was ultimately met by so few: a handful of CMOs.

With an insufficient number of CMOs willing to back the project the GRD stalled, by which time costs had reached £8 million, with no tangible outcome.

“WITH AN INSUFFICIENT NUMBER OF CMOS WILLING TO BACK THE PROJECT, THE GRD STALLED – BY WHICH TIME COSTS HAD REACHED £8M.”

The recent lawsuits against Spotify highlight the responsibility tech companies face. The onus is on digital service providers to clear all the necessary music rights. The fact Spotify is planning to build its own publishing administration system is welcome but raises the question: if all DSP’s licensing music – Apple and Google included – face the same problem, why silo the solution(s)?

Collective problems are never simple or easy to solve and any solution won’t please everyone. The challenge is not dissimilar to those faced more broadly within the tech community.

The World Wide Web Consortium (W3C) and the Internet Corporation for Assigned Names and Numbers (ICANN) are two examples. Both organizations are far from perfect, but they managed to move reasonably quickly and establish an ecosystem.

The common standards set by the tech industry helped enable the greatest accumulation of knowledge and wealth in the history of mankind.  That is some feat and well worth closer inspection. Here are a few key take-outs:

  1. They did something. W3C was founded by Tim Berners-Lee in 1994, only five years after he first invented the world wide web. ICANN was conceived and founded in 1998, a green paper was issued in February that year and ICANN was incorporated by September that year.
  2. Neither organisation had everyone on board initially, nor were they completely global or democratic, but they were non-for profit and intended to be independent with some level of governance and oversight from the outset.
  3. Governments played a key role in their inception: the European Commission with W3C, the US Department of Commerce with ICANN.
  4. Academic institutions also played a part: MIT in W3C and Information Sciences Institute at USC in launching ICANN.
  5. Both organisations scaled over time. W3C members now include businesses, non-profit, universities and individuals. ICANN has a number of advisory committees and observers as varied as the European Space Agency, the League of Arab States and the World Bank.
  6. Both have faced criticism. In the case of ICANN, the role of the US government has come in for continued scrutiny and whichever path is followed no one will be completely satisfied. But at least ICANN exists and continues its important role that has evolved over time.
  7. Finally, there was something pioneering and entrepreneurial about both institutions. While the GRD is not a profit-making exercise in itself, perhaps some entrepreneurial spirit to kick-start its existence is needed.

Continuing with the start-up analogy:

  • Who will be the GRD’s co-founders?
  • Who will provide the seed capital?
  • How will it develop its offering?
  • How will it scale?
  • What will the roadmap look like for participants and for funding rounds?
  • What are the rules, governance and oversight?

Fundamentally this is about solving problems and setting common standards. It is not about power and control, which obsesses too many stakeholders and ultimately constrains everyone.

Establish common standards through a GRD and creativity and wealth will scale new heights for the benefit of everyone.

This article also appears on Music Business Worldwide