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SDForum Open Innovation & Ecosystem Conference

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I attended the 2010 “Open Innovation and Ecosystem” conference organized by SDForum this past Friday (Oct 15th) at the HP Palo Alto Campus. Here are some of my notes from the conference. Goes without saying that any mistakes and misrepresentations are entirely attributable to my memory or lack thereof.

Judy Estrin, CEO of JLabs, ex-Cisco CTO and serial entrepreneur, gave the keynote address on “Sustainable Innovation.” She recently authored a book called “Closing The Innovation Gap” and shared some thoughts from her book.

Types of Innovation

  • Incremental: Builds on existing technologies. Necessary but not sufficient. Tends to be customer driven.
  • Breakthrough:  Completely new technology and tends to be very disruptive and leads to long-term growth.
  • Orthogonal: Combining existing technologies in completely novel ways.

She had some insightful observations and specific recommendations on how ecosystems for sustainable innovation can be created and nurtured.  She outlined the core values that she believes are necessary to foster an innovation oriented culture. Other observations that she made include

  • Innovation at scale (at companies with tens of thousands of employees) is really difficult and different from innovation at smaller companies.
  • Innovation does not just happen, it needs to be nurtured — companies must be willing to invest for the long term without being sure of the outcome being pursued.
  • Disruptive innovation requires loosely coupled work groups and nurturing environments where one can “safely” learn from failure.
  • Key to scaling disruptive innovation is figuring out a successful process for transplanting seedlings into product organizations i.e. a proven commercialization mode

Rich Friedrich, Director of Strategy and Innovation, HP Labs talked about how HP Labs is pursuing open innovation. Some notable things from his talk.

  • HP’s annual R&D budget is around $3B out of which around $150M is allocated to HP Labs.
  • HP Labs is primarily pursuing technologies and solutions that they intend to commercialize in the 3-10 year time horizon.
  • HP Labs has been collaborating very closely with its customers on a “Customer Co-Innovation Program.”. They innovate on behalf of their customers to solve a specific challenge a customer is facing. Using nano-technology to dramatically improve oil exploration effectiveness for Shell is one example.
  • HP Labs runs a “University IRP Research Collaboration” competition / program every year. They solicit research proposals from universities and select proposals to fund. Most recently they awarded grants to 65 such projects.

Deborah Magid from the IBM Venture Capital Group offered her thoughts on how IBM leverages open innovation.

  • Open is disruptive, don’t fight it but embrace it. Her focus here was on OSS. Some examples she gave include
    • IBM’s advocacy and support for Linux, Apache and other OSS efforts. IBM is reaping rewards by focusing on services revenue.
    • Countering the threat to IBM mainframes from cheaper blade servers. IBM takes a portfolio view to accommodate both and derive revenue from both.
    • Cloud (SaaS) vs Licensed S/W. IBM is creating private clouds for clients. IBM is a Cloud Service Provider to major carriers.
  • Open Innovation Initiatives
  • Collaborating with universities to further “green tech” curricula to create a pipeline for skill-set that IBM will need in the future.
  • Funding and working with very early-stage startups.
  • Extreme Blue Program. Create dedicated (and short-lived) cross-discipline teams to pursue specific opportunities.

Another interesting observation that Deborah made was that at IBM some of the product teams (BUs) take on the role of VCs i.e. they evaluate projects being pursued by researchers in IBM Labs and fund the projects from their budgets. IBM seems to have formal process for this including a DEMO day.

Panel Discussion on Process and Tools For Managing Innovation

    1. Use innovation management solutions from companies such as Spigit, Accept360 and Napkin Labs to facilitate and measure innovation.
    2. Opportunity Engineering and Options Analysis are a couple of methodologies used to measure ROI on innovation.
    3. Off roadmap demo days can create a ton of excitement and energy and provide an opportunity to showcase what employees have been pursuing w/o official mandate or support.
    4. Create unorthodox incentives to spur innovation. Incentives do not always have to be monetary. Spend time really understanding unique motivations of researchers.

Doug Solomon, CTO of IDEO gave a presentation that focused on lessons that IDEO learnt while developing an internal collaboration suite. IDEO decided to develop collaboration software because they could not find an existing solution that met their requirements.

  • Build pointers to people. Connect people to people (not people to knowledge).
  • Reward and incentivize individual participation (spur adoption and usage)
  • Demand intuitive interfaces (huge difference to adoption)
  • Leverage existing products and work habits to increase adoption
  • Iterate early and often.

IDEO is currently commercializing the internal collaboration suite that they build with the help of a third-party software ISV

Noteworthy Points From Other Panel Discussions

  • Big opportunities arise in the software domain when a new software platform is created. Analytics and solution providers creating analytics-based solutions such as CloudEra are in the process of creating a new software platform. This platform could create an ecosystem of the same scale as the one around RDBMS products. [Ping Li, Investor & Mike Olson, CEO of CloudEra]
  • Privacy and discussion around privacy will continue to evolve and eventually the focus will shift from what can be collected (inevitable) to how that private data can be put to use. Expect that to be regulated through policy and legislation [Mike Olson]

Written by Varma Chanderraju

October 20, 2010 at 9:18 pm

Posted in Innovation

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