Last week, the New York Hall of Science played host to the Open Hardware Summit, a gathering that drew a diverse mix of people from academia, the art community, and companies ranging from startups to Texas Instruments. Open Hardware may not have had the success of its software cousin when it comes to acceptance and recognition, but there was a lot more going on in the community than I would have expected going in to the meeting, and a lot of different reasons the people present chose to go the Open Hardware route.
Over the course of the day, two basic rationales for going open became apparent. For the larger businesses, open hardware creates a business opportunity, as an open design can drive sales of their main products—even if a competitor takes a board design and runs with it, the company can still come out ahead if it means sales of related products. For smaller companies, the openness of hardware can mean sales to a community of hobbyists and hackers that’s much larger than most people realize.
Serving the hackers
MIT’s Eric von Hippel provided some perspective on the size of the hobbyist market when he mentioned a study he had done of the UK. Apparently, there are more hobbyists who make their own solutions when one isn’t commercially available than there are people employed in R&D positions, and they spend more doing so than the nation’s commercial product development teams do. Collectively, that’s a big market, and open hardware can help serve it by giving users a set of flexible, well documented parts.
And, in fact, there’s an entire vertical market of open hardware. For example, an Italian company called Arduino makes a set of programmable boards that can be controlled via USB, or programmed to act on their own. Because these are so flexible and well documented, they’re a favorite for use by other open hardware companies. For example, adafruit sells the boards themselves, kits for using and extending them, and finished products that include them.
They’re also used by DIY Drones, which offers hardware that can potentially turn any model aircraft into an autopiloted drone. They also have products for doing the same with helicopters and blimps.
These kits can be viewed as the middle ground of the open hardware community, with the boards themselves occupying the low end. At the other end of the spectrum are places like Chumby, which makes complete consumer products that go into retail stores. According to Bunnie Huang, one of the company’s founders, most people who buy a Chumby couldn’t care less that the plans for its internals are available. But a percentage of sales probably go to people who know they can get the schematics for what’s inside and repurpose it for their needs.
Going for big business
But it isn’t just small companies that have gotten enthused about open hardware. Texas instruments was represented by a spinoff called Beagle Board, which offers an open hardware specification for a compact, ARM-based computer, which it also sells. For TI, the effort is all about increasing the sales of its OMAP processors. Those don’t get used on their own—they always require support hardware—and that hardware can be difficult and expensive for others to develop. So, by giving away the plans and encouraging low-cost competitors to build variants, Beagle Board is hoping to lower the barriers to entry.
Beagle Board’s Gerald Coley said that, when a competitor builds a variant, it’s actually a good thing for TI; it means more sales of the OMAP processors, and can help give adopters greater choice in the precise hardware they want to put in a product. With more hardware on the market, you typically end up with greater operating system support, too, which also can increase the adoption of TI products.
This approach was echoed by Parallax’s David Carrier, who noted that his company sells both products and the microcontrollers that power them. Anyone who uses any of the company’s reference designs ends up buying a product from it, even if they ultimately end up competing.
Bug Labs, in contrast, is selling open hardware directly to larger companies. The company offers a modular platform to help companies prototype potential products. Instead of having to design from scratch, companies can experiment with different modules that approximate the features intended for the product; the hardware offers wireless, video out, battery performance testing, a Linux-based Web platform, and more. Bug will also happily offer companies consulting services to help them test potential products and move them to more customized hardware.
Eying the competition warily
For the bigger companies, competitors aren’t a worry, since they’ll mean more sales of the relevant products. But that’s not true for smaller shops like Arduino and adafruit. But there were a variety of ways the executives from these companies hoped to keep from getting undermined by cheaper competitors that used their designs.
Branding and community are two important factors. The cheers in the crowd that greeted Arduino’s Massimo Banzi made it clear that his products had generated a great deal of goodwill among the community. Banzi reiterated that he didn’t mind other companies copying Arduino’s designs, provided that they didn’t call them Arduino, and try to cash in on his company’s good name.
Wired’s Chris Anderson talked about how DIYdrones has tried to build a community of enthusiasts that includes its employees. If someone comes up with a competing product that’s better or cheaper, it’s good with them, because they’ll want to use it. If it’s just equivalent, then Anderson felt DIY’s community would stick with the company that has been supporting them for a while.
The better/cheaper combination turned out to be an issue that was revisited throughout the day. With the growth of cheap overseas manufacturing, it was almost always possible to find a company that would promise to do even small runs of electronics at unbeatable prices. But the reliability and quality can get very spotty, and deliveries don’t always materialize when promised. Supply chain issues are a headache for even many of the established companies, but most people expected that their experience with the manufacturing side of the business gave them a substantial advantage compared to competitors that were trying to get cheaper production of open designs.
Limor Fried of adafruit added two additional reasons that open hardware worked for her company despite the competition. The first was that, as a small shop, it’s been unable to keep some of its more popular products in stock at times—with the plans available, they end up with a few less dissatisfied customers. When the company’s documents help a hobbyist put something together themselves, it often creates a loyal customer.
But her closing thought was that imitation really was a form of flattery. They fact that someone felt a design was worth using really told her that her work was on the right track. “You know,” she said, “there are no Zune knockoffs for sale on Canal Street.”
Source:http://arstechnica.com/gadgets/news/2010/09/drones-chumbys-and-big-business-too-the-open-hardware-summit.ars
