Linux Beat IBM, Will Open-Source Software Beat Waymo And Tesla?

In technology, open-source environments have been one of the most important organizational models in the last 30 years. Perhaps the most successful of these has been the Linux operating system. Linux was born in a world of proprietary operating systems (remember OS2, Sun OS, and others?). Operating systems provide the interface between hardware developers and application software developers. Proprietary operating systems have difficulty providing all the functionality required by both communities at a rate required for rapid progress.

In 1991, Linux was introduced as an open source platform and soon grew in popularity. Today, Linux has significant market share in the commercial landscape, and in fact, the Linux ecosystem is larger than anything any single company or even country can build. The seminal moment occurred in 2000 when IBM IBM announced its full support of Linux effectively deemphasizing the path of their own proprietary operating systems. Android, WordPress, Apache and countless other open-source environments show the viability of this organizational model.  

What exactly is open source?

Conventionally, an individual or a company invests in a technology area, owns all the rights to it, protects the generated intellectual property, and monetizes this investment through sales to customers. In an open-source paradigm, a “community” structure is constructed where many participants can contribute, and all can use the collective intellectual property. Table one below shows the critical elements of an open-source paradigm.

Table 1: Critical Aspects of Open Source Environments

Open-source environments are especially effective in situations where there are many potential suppliers and a diversity of customer use-models. In these situations, the open-source environment allows an incremental contributor to leverage the massive amount of work of others and contribute something valuable to the whole.

When working well, the amount of accumulated IP and capability can be breathtakingly large and the rate of innovation accelerates. However, the other side of this model is that the market is instantly democratized and both monetization as well as differentiation must be built using other means.  

How do you make money with open-source software ?  

In the late 1990s, Kaz Hashimoto was able to demonstrate the services and maintenance and services model with Cygnus Solutions(predecessor to IBM Red Hat RHT ). Others such as Google GOOGL have perfected the enabled ecosystem model where the open-source structure provides enablement for other profit-making business models.

“Until we could figure out how to connect the contributor community with the value statement which was valued by commercial entities, the whole open-source model was not stable,” said Kaz Hashimoto, former CEO Cygnus Solutions.

Will Autonomous Vehicle(AV) hardware and software transition to an open-source model ?

At a high level, the AV hardware and software stack seems to be a good fit for an open-source organizational model. This includes:

1. A large set of hardware suppliers (sensors, communication, processing, etc)
2. A large set of software suppliers (object recognition, safety, decision-making, etc)
3. A large range of use-models (robo-taxi, trucking, rain, snow, mining, etc)

One could envision a situation where enabling a community with the right open-source environment can accelerate innovation and learning. This seems to be especially true for exposing odd and interesting “edge” cases which are context specific.

For AVs, today, we are still in the world of proprietary systems where companies such as Waymo and Tesla TSLA are making large and deep investments in their own capabilities. Open-source environments are starting to sprout with the four most prominent systems being Nvidia NVDA Drive , Autonomous Stuff, Baidu BIDU Apollo, and perhaps the most interesting with Autoware. Note: Nvidia offers its Drive environment for free, but it is not strictly open source. The market dynamics are very interesting for several reasons:

1. Market Enablement: If a commercial entity believes it is well ahead of the market, they have a large disincentive to contribute functionality which will enable a large flock of competitors...never mind finding a way to recover the sunk investment.
2. Market Divergence:  Whatever their investment, if the open-source environment gains momentum and the company’s architecture is not part of the solution, the commercial enterprise can quickly be in a position of large competitive disadvantage.
3. Strategic Blocking:  In the past, significant contributions from commercial entities have only come in situations where one of the entities was strategically trying to block a competitor who was gaining dominant market share. Examples include IBM with Linux (block Microsoft MSFT ) and Google with Android (block Apple AAPL ).

Overall, we are very much in the early days of autonomous technology, but if a truly independent open source organization (such as Autoware) were able to gain momentum such that fully functioning solutions could be built with minimal resources, the overall market dynamics have the potential to change quickly and with significant momentum. 

Note:  There are a couple of companion pieces to this article.

1. Open Source AVs: The Story Of AV Development In Estonia
2. Will A Small Open-Source Effort From Japan Disrupt The Autonomous Vehicle Space ?