When faced with a business challenge, turning to a competitor for help may be the last thing on your mind. But if I'd dismissed this strategy, it would have prevented me from building a unicorn software company.
Co-opetition — a tactic in which two competitors cooperate for mutually beneficial results — has existed as a viable strategy since the end of the 20th century. It's widely used in the technology industry and is a key tenet to open source software development. Within these communities, engineers from competing organisations collaborate and contribute to the same, freely available source code. Moreover, the future of the open source community hinges on this collaborative approach.
My experiences in open source, as well as the tech ecosystem more broadly, are not companies or people competing with each other but rather allowing people to share what they're doing, the lessons they've learned and how we might all benefit together.
Co-opetition in open source spurs innovation and collaboration, but only with widespread participation
The open source community requires collaboration, which is why co-opetition is a natural fit in this environment. Organisations build on foundational, open source software to eventually provide an evolved product to customers. This type of co-opetition is central to the open source projects Aiven manages on its cloud data platform — and how the open source community grows and thrives.
Unfortunately, not every organisation sees the matter the same way. Driven by fears of losing control over customer relationships and giving up market share to competitors, many SaaS companies have shifted their focus to proprietary licensed software. However, these vague, mercenary licenses can do more harm than good, especially in the open source space where collaboration is its cornerstone.
Prioritising capital over collaboration, organisations with roots in open source go the proprietary route and essentially turn their backs on the community. The issue is that these businesses call themselves open source software companies when, in reality, they are subtly bending the license to protect parts of their software from others' use. It doesn't help that these licenses are almost always vague, leaving others confused about which parts of the software they are permitted to use. This type of action hinders growth in the open source space — and if organisations continue to prioritise capital over collaboration, the open source community is at risk.
Even though open source software is free to use, we shouldn't ignore its maintenance. We should invest in open source software we rely on. By dedicating not just money but also employees' time to it, we will make sure these projects are in a healthier state, so everyone can build business on top of them in a sustainable way.
The truth about co-opetition
Open source collaboration drives innovation. Without co-opetition in the open source space, we wouldn't have much of the technology we use in our everyday lives — like mobile phones. With this in mind, let's dispel a few myths and take a closer look at what this collaborative approach means for your organisation.
- You won't lose influence over the project's direction. Co-opetition will help grow the open source project to heights never imagined before because the more heterogeneous a working group is, the better the results they produce.
- You don't have to worry about giving up market share. You do not need full market share — you heard me correctly. For example, AWS and Azure are both successful and profitable businesses. Yet AWS holds 33% of cloud market share while Azure holds 21%. There's room at the table for multiple companies to own significant market shares.
Co-opetition is a win-win: The vendor company doesn't have to develop proprietary software from scratch, and open source developers learn from one another and build partnerships with vendors. By working with other developers toward a common goal — innovation and growth — co-opetition enables mutual benefits that help each stakeholder thrive.
Three tips if you're considering co-opetition
Co-opetition isn't just about improving profitability. By playing to each organisation's strengths, you can achieve a shared goal in a more sustainable and seamless manner. In fact, collaborative relationships of three to five years have more than a 50% chance of reducing operational costs for both parties.
Consider the following advice if you're contemplating an unlikely partnership:
Compare the benefits and trade-offs before deciding on a partnership — it's not always the right move if the potential negative outcomes outweigh the potential benefits.
Fill gaps in operations by partnering with organisations that can help in areas that are outside of your business' core expertise. It's more efficient and cost-effective to outsource certain business functions if a competitor has more abundant resources or is an expert in that area.
Provide something in return to your business partner — co-opetition is a give and take. For example, Elasticsearch was created as a piece of open source software by Elastic. After Elastic got second thoughts and went proprietary, other competing members of the open source community, including Aiven, AWS and Logz.io, developed their own fork (i.e., using the original code from an open source software program to develop their own software) of Elasticsearch called OpenSearch.
Engagement in the open source community is critical to the innovation and growth of modern software. Even though open source software is free to use, we work closely with other members in the space to offer our expertise and resources because a win for open source is a win for our customers and us. As a leader in a tech scale-up, focusing on customer needs and outcomes, and not competitors, has been foundational to our success. Taking the collaboration that happens inside open source communities and applying it to other business cases may result in a 1+1=3 scenario, ensuring your customer is the clear winner.
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