Strategizing with hardware rich open source ecosystems

Abstract

Firms increasingly adopt open strategies to develop and deploy complex systems that combine software and hardware. Such strategies require the development of large ecosystems that coalesce the innovation capabilities of hundreds of firms across different industries. The present paper aims at understanding how different types of (1) open strategies, (2) ecosystem governance, and (3) degree of openness in complex systems relate to each other. Furthermore, we help decision makers assess the benefits and challenges associated with creating or joining such ecosystems. To do this, we perform a comparative analysis of six major hardware-rich open source ecosystems that aim at scaling up complex innovative solutions. Our findings suggest that an upstream strategy aimed at replacing supplier proprietary design with open substitutes requires a democratic governance and a degree of openness that maximize the attractiveness of the ecosystem. Also, we suggest that a downstream strategy that aims at carving a space in new markets requires an autocratic governance and degree of openness that allow to jointly attract partners and capture value.