Chapter 8. The MOD (“MODification”) Station Model

In the preceding chapter, we saw how a community of innovators can come together to improvise their way in an innovation initiative. However, not all community-based innovation needs to be managed in this emergent manner. Communities can also come together to innovate around a well-defined technology or platform.

In Chapter 3, “The Four Models of Network-Centric Innovation,” we talked about an innovative community-based approach to create a movie, Sanctuary. The movie, offered into the public domain under an open license, fueled the creative energy of individual contributors who adapt, interpret, and evolve the original movie. This open approach has two requirements. First, the innovation project should be designed so that elements of the project can be partitioned and handed off to different community members. Second, the project sponsor should provide the tools to modify, adapt, and recombine the elements of the innovation. This community-based modification approach is yet another form of network-centric innovation—one that marries the certainty of a well-defined innovation architecture with the diversity and the creativity of a community of contributors.

In this chapter, we examine this model of network-centric innovation, which we call the MOD Station model. As we noted in Chapter 4, “Innovation Networks: The Players and the Plays,” the term MOD itself is associated most with “modifications” made to a computer game by the general public (or users) and hence, known as “mods” in the computer gaming industry. Generalizing from this definition, we refer to the MOD Station model of network-centric innovation as an innovation context wherein a community of innovators come together to create new offerings by modifying, extending, and/or enhancing an existing innovation platform in ways that benefit all members of the network including the creator of the innovation platform.

To understand how the MOD Station model works, we take a look at the computer gaming industry where this model originated. Later, we consider other contexts including the semiconductor industry.

“Modding” in the Computer Gaming Industry

An arena where the MOD Station model is quite popular is the computer gaming industry. Many gamers are highly conversant with computer programming, and a fair number of them also believe in the “hacker culture”—pursuing innovative ideas to change the game to add an extra dimension of challenge or excitement to the game, or to improve their odds of success in playing the game. So avid gamers often “hack” or modify the games, and sometimes take the additional step of releasing their modifications to other gamers through online gaming community Web sites. Most contemporary PC-based games are designed so that they can be modified by gamers relatively easily. The combination of the hacking culture and the ease with which games can be modified has given rise to the phenomenon of “mods” in the computer gaming industry.

The benefits from mods accrue to gamers as well as to the developers of the original games. And, this has led to many game developers (for example, Epic Games, id Software, Valve Software, Bethesda Softworks, and so on) taking a more proactive approach to promote and support the innovative activities of the gaming community in ways that open up new commercial possibilities for the original game as well as enhance the overall gaming experience.

The “Modding” and the “Modders”

The original game provides the structure for the innovative activity of the gaming community. However, the precise nature and extent of the modifications can vary widely. Broadly, the mods can be of two types—partial conversions and total conversions.

Partial conversions are relatively minor alterations to a game, in that they do not change the underlying elements or flow of the original game. For example, modifications can change the execution of certain functions of the game including the behavior of specific actors, the operation of particular weapons, and so on. Partial conversions can also involve adding new elements to the game—for example, new weapons, new game maps, new “skins”—that bring more complexity without changing the underlying flow of the game. For example, Team Fortress, one of the most popular mods, is a partial conversion of the original game called Quake.

Total conversions, in contrast, involve modifying the overall game play as well as the core elements of the game. While a total conversion mod might still employ the basic engine of the original game, the end product can be a completely different game with a different look and feel. Typically, such total conversion projects involve complex development work and a significant amount of development time and thus are often pursued as a group project.

While mods exist for most of the popular games, some games in particular have attracted a lot of attention from the gaming community. A notable example is Half-Life, a game produced by Valve Software in 1998. Half-Life was a single-player “first-person shooter” (FPS) game with a complicated plot involving a protagonist with an advanced degree in theoretical physics saving Earth from a set of attacking aliens. With more than 8 million copies sold since its release, Half-Life is one of the best-selling PC FPS games to date. The success of Half-Life can be attributed not only to the pioneering elements of the original game but also to the highly innovative mods that followed in the eight years or so since the release of the original version.

Mods for Half-Life have ranged from partial conversions that involved new game maps to total conversion that changed the game from single-player to multiple-player format. The best-known total conversion mod of Half-Life is Counter Strike, which uses the Half Life engine but is a multiplayer-only game. Counter Strike is a team-based, first-person shooter in which the players join either the terrorists or the counter-terrorists, and combat the opposing team while fulfilling predetermined objectives. Released shortly after the original game, Counter Strike is the most popular online first-person shooter game in history—with more than 94,000 gamers playing at any given time and collectively contributing more than 5 billion minutes of playing time each month.¹ Indeed, Counter Strike has become so popular that it has generated its own mods and dedicated gaming communities.

Because most total conversion mods use the basic engine of the original game, playing such mods requires owning the original game, too. However, some of the game engines have become free software allowing the total conversions to become truly stand-alone games—playable without having to own the original game. Examples include the Tremulous mod for Quake III Arena and the D-Day: Normandy mod for Quake II.

In this innovation network, the game developer plays the role of an innovation catalyst by making the game “moddable”; that is, releasing it in a form that allows modding. For example, game developers can facilitate modding by defining game play variables in non-proprietary file formats and adopting graphics of a standard format (for example, bitmap files). Developers can also make available extensive tools and documentation to assist mod makers. For example, in the case of Homeworld 2, a game that requires a very sophisticated tool called Maya to build new in-game objects, a free version of the tool was made available to the modding community.

Similarly, in the case of Half-Life, Valve Software provided tools and code to the gaming community. For example, it included Worldcraft, the design tool used during the game’s development, as part of the game software. The developer also released a comprehensive software development kit (including texture editors, model editors, and rival level editors) that enabled easier modding. Finally, the source code of the game was also released and has become the base for the many multiplayer modes that have been created for the game (including Counter Strike).

The individuals who participate in creating the mods play the role of innovators. In the gaming community, they are referred to as modders. Most modders belong to the fan community associated with a particular game. The online forums associated with such communities also provide the platform for the modders to promote and distribute the mods.

The online forums also provide the context for a group of modders to come together as a team to pursue projects of common interest. Some of these modder teams go on to create more than one mod. One such example is Team Reaction, a prolific mod team, most notably known for the QPong and Jailbreak mods.

Incentives for Modding

All computer games involve some combination of intellectual property rights—copyrights, trademarks, patented technology, and trade secrets. However, by and large, a copyright is the most widely applied IP (intellectual property) right management mechanism in the computer game industry. A copyright in a computer-based game protects the source code (either embedded on a physical medium such as a DVD-ROM or as a file made available for download). Many other elements of a game (such as game artwork, musical score, and so on) might be subject to the copyright of a different entity (author).

The IP issues related to the mods are complex and yet to be resolved.² Most mods are derivative works as they are built on or use parts of other games. As such, game developers require mods to be non-commercial or free. As noted previously, some game developers have opened up the source code of their games for use by the mod community while other developers have partially opened up the code. For example, the Quake 2 game engine from id Software has been released to the open source community under the GNU Public License (GPL). Similarly, Raven Software (which licensed the Quake 2 engine privately to create the game Heretic II) released part of the source code of Heretic II to the mod community while keeping closed some other parts as they were considered trade secrets.

Despite the issues related to intellectual property rights, game developers have largely adopted a positive approach towards the modding community, because they realize that modding offers important indirect benefits for them. Good mods help to build and maintain a fan base for the game. The larger the number of mods associated with a game, the bigger the player community associated with it. Mods also extend the lifecycle of a game. Each time a new mod is released, the original game attracts a new generation of players. For most mods, the original game is still required to run the mod, so a number of high-quality mods can result in a significant increase in the sales of the original game. For example, in the case of Half Life, popular mods such as Counter Strike, Team Fortress Classic, Deathmatch Classic, Firearms, Ricochet, and Day of Defeat have extended the life of a product that was first released in 1998 by several years, and have helped push the total sales to over 15 million units.

Game developers can also acquire the more popular mods and convert them into distinct products. For example, both Counter Strike and Day of Defeat were so popular in the gaming community that they were bought by Valve Software and turned into full-fledged retail products. Game developers can save development costs as well as development time. In addition, some game developers have also encouraged mod creation by hiring the star mod creators.

Although all the preceding incentives benefit the game developer, the player community also gains much from the mods created by the community members. Most mods are non-commercial products, so they are free of cost. This means that mods multiply the returns from purchasing the original game. Mods also provide a powerful avenue to channel the creativity of individual developers. With a greater proportion of game code as well as development tools available in the public domain, the development of mods has become easier. Further, the reputational incentives associated with creating high-quality mods serve as a powerful mechanism in attracting more and more talent into the modding community.

In sum, the computer game industry offers an excellent illustration of the MOD Station model of network-centric innovation—a community of innovators coming together to innovate in a clearly defined and structured innovation space and sharing the benefits of such innovation with other members of the network. However, this model is not limited to the computer gaming context. Indeed, it finds application in several other contexts. Let us now consider an example of this model from a project in the semiconductor industry—namely, the OpenSPARC Initiative.

“Modding” The Chip Architecture: The OpenSPARC Initiative

In early 2006, Sun Microsystems Inc. launched the OpenSPARC Initiative—a community-based initiative to promote open and collaborative innovation around its hitherto-proprietary SPARC microprocessor architecture. The initiative involved the creation of a community Web site (www.OpenSPARC.net) where Sun released the source code and other specifications into the public domain under an open source license allowing any contributor to modify and build on the SPARC architecture.

SPARC stands for Scalable Processor Architecture and is a technology that is based on the revolutionary Reduced Instruction Set Architecture (RISC) created at the University of California, Berkeley in the 1980s. The SPARC architecture was initially implemented in workstations, which were high-performance standalone machines used for scientific and financial services applications. Later, it was used to build processors for large servers, a very different application. SPARC machines generally use Sun’s Solaris operating system, but over the years, other operating systems ranging from FreeBSD, OpenBSD, and Linux have also been used. One of the more popular SPARC implementations—the SPARCstation1—was introduced by Sun in 1989.

In the same year, Sun also established a separate entity called SPARC International to promote the SPARC architecture and to provide conformance testing. SPARC International owns and manages the licensing of the SPARC architecture and the associated trademark. The organization has been instrumental in the late 1980s and early 1990s in licensing the technology to several manufacturers including Texas Instruments, Cypress semiconductors, and Fujitsu.

Over the years, several versions of the SPARC architecture have been released—the most notable have been SPARC Version 8, the standard 32-bit architecture definition released in the late 1980s; SPARC Version 9, the 64-bit architecture released in 1994; and UltraSPARC Architecture 2005, an extended architecture definition, released in late 2005.

In late 2005, Sun also introduced UltraSPARC T1, a new microprocessor implementation that conforms to the UltraSPARC Architecture 2005 specification and executes the full SPARC V9 instruction set. UltraSPARC T1 is designed as a multithreading, multicore CPU and is at the heart of Sun’s newest server line, the Sun Fire T2000 and Sun Fire T1000 servers.

On March 21, 2006, Sun made the UltraSPARC T1 processor design available under the GNU General Public License (GPLv2) through the OpenSPARC project.

Sun pursued the open license strategy for two reasons. First, Sun realized that the revenues it could derive from its proprietary internal “builds” and support services could be significantly enhanced by the complementary external innovation that could be created for its architecture. Second, the company also realized that there were diverse new application areas for its SPARC architecture chips, ranging from consumer electronics to health informatics. Entering such new markets would be far easier if the company adopted a more open approach toward its technology architecture and encouraged community-based innovation initiatives targeted at such new application areas where Sun had limited expertise.

Thus, the primary objective of the OpenSPARC initiative was to enable a community of innovators to take the source code and specifications of the 64-bit UltraSPARC T1 processor and modify and build on it to design and develop a new generation of multicore, multithreaded chips and complementary software products. The newer chips and software products would open up newer markets for the UltraSPARC T1 design, benefiting all community members.

While modifying and improving the basic SPARC architecture is one of the primary objectives of the OpenSPARC initiative, another equally important objective is to facilitate the “System On a Chip” (SOC) design. The SOC design movement is dictated by the need to lower product costs as well as to speed up product design cycles in the semiconductor industry. It involves integrating on to a single chip a number of functional modules that in the past have been spread across several chips. A key challenge in this design approach involves getting access to the IP related to the separate pieces (needed for integration on a given chip) in a format that facilitates easy customization and ready integration. The OpenSPARC initiative is aimed at building momentum for such an SOC design movement.

Thus, the innovation space in the OpenSPARC project is clearly defined and structured by the SPARC architecture specifications and the instruction code set that Sun released into the public domain. Specifically, Sun released the code in Verilog language of the 64-bit, 32-threaded UltraSPARC T1 processor. This new open source version is called the OpenSPARC T1. Along with this version, Sun also released the full UltraSPARC Architecture 2005 specification (that is, the instruction set) as well as the full OpenSPARC simulation environment and verification suites. In addition, several other support tools and technologies that facilitate innovation on the architecture including Sun Studio software and SPARC-optimized compiler were also released. All of these technologies were released under the GPLv2 license, which gives the right to use, modify, and/or redistribute the technologies, thereby enabling a wide range of innovation activities. To understand what these activities are, let us take a closer look at the operation of the OpenSPARC community.

The OpenSPARC Community and the Innovation Activities

Membership to the OpenSPARC community is open and free to any interested entity—firms as well as individuals. By registering at the community Web site, contributors can get access to all the code and the tools. They can also participate in any of the open projects. In mid 2007, more than 200 registered members were in the OpenSPARC community, a majority of them being firms.

Who are the key players in this community? The first key player is Sun itself. The company plays the role of an innovation catalyst by contributing the base architecture upon which all the innovation activities will be based, and by creating the Web-based infrastructure to support the community activities. Sun also actively participates in the community governance and provides a broad roadmap for the evolution of the SPARC architecture.

The second key role is that of the innovator. All community members who contribute to the enhancement of the SPARC architecture play this role. These community members or innovators range from software and hardware firms to individual developers and academic researchers who contribute in different ways. For example, software firms take the source code of the SPARC architecture and create innovative software applications that are highly optimized and tightly integrated with the hardware. Microprocessor chip designers and manufacturers (foundries) take the SPARC architecture and modify it to develop newer chips. Similarly, other hardware vendors use knowledge of SPARC architecture specifications to design highly customized benchmarking tools and verification suites. Finally, individual developers and researchers build on the SPARC architecture and specifications to research and develop next generation chip architectures. Many of these individual developers tend to work for firms or research institutions.

The nature of the OpenSPARC community is such that members do not necessarily have to have any formal relationships with Sun. OpenSPARC.net is an independent entity and as such all the members develop their ties with one another through the community. Further, there are no intermediaries in the community. Ties among community members are developed over time based on the nature of the projects they are working on.

Members in the OpenSPARC community are free to innovate either within or outside the architecture. Within the architecture, members can, for example, add or delete cores, add new instructions to the instruction set, modify the different types of interfaces (memory interface, Input/Output, cache/memory interface, etc.). Members can also innovate outside the architecture by designing additional components that extend the architecture—for example, video or graphics components, networks interface, and so on.

As of July 2007, there have been more than 4,700 OpenSPARC T1 RTL downloads through the community Web site. Typical projects in the OpenSPARC community have ranged from porting operating systems to the current SPARC chip to developing newer chips that build on the SPARC architecture.

For example, in Italy, a small company called Simply RISC designed and published the first derivative product of the OpenSPARC chip design. Simply RISC is a company that develops and supports CPU cores, peripherals, and interfaces released under the GNU-GPL (open source licensing scheme) to build free hardware designs of microprocessors, Systems-on-a-Chip and Networks-on-a-Chip. In 2006, a team of engineers at Simply RISC created a cut-down (single-core) version of the OpenSPARC T1 processor called the S1 core, which can run on Ubuntu Linux and can be used in embedded devices such as PDAs, set-top boxes, and digital cameras. This version can be freely downloaded and implemented on a Linux host.

Another project relates to operating system software. David Miller, an individual software developer, led the Linux community in creating a Linux port for the OpenSPARC T1 processor that was added to the mainline Linux kernel. The port allows a very diverse set of applications to run on the OpenSPARC architecture and also paves the way for a broader adoption of the technology. And, based on this work, two Linux distributors—Ubuntu Linux and Gentoo Linux—have already brought out OpenSPARC-specific Linux distributions.

Finally, a more ambitious project based on the OpenSPARC open source is being pursued by a set of researchers at the University of California, Berkeley. The project, called Research Accelerator for Multiple Processors, or RAMP, is aimed at developing a new multicore, microprocessor architecture that is focused on parallel computing. The researchers are working on building a massively powerful and complex architecture that involves chips that hold one to two dozen cores. The RAMP team has adopted the OpenSPARC T1 processor as a target processor for its project because it is available in the public domain.

Community Governance and Infrastructure

Although Sun is the initiator of the OpenSPARC project, it is a community-led initiative. The community has established a formal mechanism, an elected community advisory board, to exercise such community leadership. Reflecting the community-based governance structure, the advisory board is expected to solicit input from the community on a regular basis and use this input to shape the evolution of the initiative. The OpenSPARC charter explicitly states that “The board shall be selected and shall conduct its affairs in accordance with democratic principles and shall represent the interests of the OpenSPARC community.”³ As such, the role of the advisory board is similar to that of advisory councils that are common in Open Source Software communities.

The advisory board helps to set a coherent innovation agenda for the community—an agenda that embodies the will and the interests of the overall community. As David Weaver, Sun’s representative on the OpenSPARC board noted, “The board is there to help foster the development of the community and as a final arbiter in case of any disputes that might arise.”⁴ The board also helps in promoting a set of community-wide principles to guide the collaborative innovation activities and practices. These guiding principles include equal rights and opportunities for all members, fair processes in all community projects, and the obligation to make available, whenever possible, the IP (intellectual property) rights to all community members to build upon and share.⁵

So how can a member initiate and participate in a collaborative project in OpenSPARC.net? Any registered community member can start a new project. When a member makes a request to start a new project, the request is evaluated by a community manager to ensure that the proposed project meets the guiding principles of the community. After the project is approved, the members who participate in that project have all the rights and responsibilities to manage the activities and make all the project-related decisions. Members can play different contributing roles in a project—from project owner to developer to content developer.

OpenSPARC.net constitutes the central forum for members to interact, download and use the tools and technologies. It lists the ongoing projects and their details to allow members to join the projects. It also provides different types of interaction facilities to members ranging from community discussion boards to blogs and wikis. And it offers tools to support collaborative development, including mailing lists, source code version control, issue tracking, and file sharing.

The community is also in the process of developing an “open book” on OpenSPARC T1 that is licensed under the Creative Commons Attribution License. The objective is to describe the architecture in detail (a sort of user manual) to assist the developer community.

IP Rights Management and Value Appropriation

Sun made the OpenSPARC architecture and the specifications available to the community under the GPLv2 license. The GPLv2 is an open source license that has been approved by the Open Source Initiative and provides wide latitude to the user to run, copy, distribute, or modify the technology. The GPL is built on the “copyleft” principle, which gives every person the permission to reproduce, adapt, modify, or distribute a work (a software program, an art, a piece of text, and so on) as long as such rights are preserved for any resulting modifications or adaptations as well.

Community members are allowed to make private modified versions of the technology, without any obligation to divulge the modifications, as long as the modified technology is not distributed to anyone else. However, if a member chooses to modify and redistribute the technology, then the modified technology must also be licensed to the OpenSPARC community under the same GPLv2 license. This practice ensures that the whole community benefits from the innovative effort. Note that members are allowed to distribute a modified technology and charge a fee for it as long as the modified technology is also released under GPLv2 to the community.

All contributors to the OpenSPARC community are also required to sign a Contributor Agreement (CA) before contributing code to the community.⁶ The CA ensures that the community has a patent license for all contributions made to the project. The CA establishes a joint copyright assignment in which the contributor retains copyright ownership while also granting those rights to Sun as the project sponsor. However, the CA does not change any of the rights and responsibilities that are due from the GPLv2 or any other open source license used in the community Web site.

The SPARC trademark remains the property of SPARC International. As such, while modified or new designs based on the OpenSPARC architecture can be marketed by community members, they will need to license the trademark if they want to associate such new or modified designs with the SPARC name.

An interesting question here is how does Sun benefit from the OpenSPARC initiative? Or, in what ways does Sun appropriate value from this project?

One benefit is that because Sun still develops and markets systems that are based on the UltraSPARC T1 architecture, by opening up the architecture and establishing a vibrant community around it, the initiative will lead to the creation of new markets that the company can target. For example, with the porting (implementation) of Linux on the OpenSPARC platform, the market for Sun’s UltraSPARC-based systems broadened considerably. As David Weaver of Sun’s Architecture Technologies Group noted, “Our hope is that the creativity that gets unleashed on the open platform would lead to new and innovative applications—applications that Sun has never thought about (and may never will)—that expand and enhance our broader ecosystem. An overall bigger pie and an increased slice of the pie for everyone.” Another benefit is that the OpenSPARC initiative enables more external “eyes” to be focused on researching the challenges and opportunities around multithreading and 64-bit processes (for example, the RAMP project) thereby enabling these technologies to evolve more rapidly and creating newer opportunities for Sun’s own internal technology development projects. Further, by increasing the number of people who can obtain the SPARC architecture code, the OpenSPARC initiative also increases the number of deployments and the base of customers likely willing to pay for systems, software, and services from Sun.

For contributing members, the community provides other types of incentives. The OpenSPARC Web site offers a marketplace to exchange or trade products and technologies developed by community members on the OpenSPARC architecture. Members can market free as well as “paid for” products. For individual developers as well as other community members, returns can also come through exposure to other firms. By participating in and contributing to the community, firms can enhance their reputation among their peers as well as track the technology evolution and market dynamics that in turn might inform their own internal technology development strategies.

Combining OpenSPARC with Other Sun Initiatives

Sun has extended the OpenSPARC model to its other technologies—most notably, its operating system Solaris—through the OpenSolaris community project and its Java technology through the OpenJava initiative.

The Solaris OS is Sun’s operating system distribution and is branded, tested, maintained, and supported as a Sun product. The OpenSolaris project provides the open source code base of Solaris, the “build” tools necessary for developing the code, and an infrastructure for communicating and sharing related information.⁷ Over time, Sun expects most (if not all) development of the source to take place in the OpenSolaris community. Since launching the OpenSolaris initiative, Sun claims a significant increase in the installed base of Solaris (up to nearly 6 million registered licenses).⁸

In May 2007, Sun released its implementation of the Java technology as free Open Source Software under the GNU GPLv2 license—effectively replicating the same community-based collaborative innovation model that it used for the OpenSPARC and the OpenSolaris technologies. The source code to all three implementations—the Java Platform Standard Edition (Java SE), the Micro Edition (Java ME), and the Enterprise Edition (Java EE)—were released to the community for modification and enhancement.

The success of these community-based initiatives will depend on Sun’s ability to be an effective innovation catalyst—offering an appropriate innovation infrastructure, being creative in devising IP rights management systems, and being a responsible community partner. In addition, Sun’s ability to find potential synergy among the three initiatives would also shape the growth and success of these initiatives.

Modding in the Web Services Arena: The “Mashup” Movement

A more recent example of the MOD Station model of network-centric innovation is the Mashup movement that has emerged in the Web services market since 2005 or so. The Mashup movement represents the creativity of independent developers and entities in mixing and matching data and presentation elements from multiple Web information sources to offer new and innovative Web services.

The innovation architecture in this context is defined by the data and presentation elements of popular Web information sites such as Yahoo!, Google Maps, Flickr, Virtual Earth, Technorati, YouTube, Zillow, and Amazon. The innovation activities involve combining different elements of these architectures to create mashups or new services.

There are two types of players in the Mashup community: The large Web information companies that play the role of innovation catalysts and the individuals and small firms that play the role of innovators by creating the mashups. The application programming interfaces (APIs) published by the large companies provide the primary mechanism for the innovators to combine elements from multiple sources. Furthermore, these large companies also provide free access to their data (as well as the presentation formats) thereby promoting the Mashup movement. In many cases, they also provide visibility to such innovative effort by linking such mashups to their Web sites.

Consider Mappr, one such mashup.⁹ Mappr was developed by a team of San Francisco–based designers and programmers. The Mappr service uses the Flickr APIs and sifts through the tags of all the photos posted on Flickr.com (by more than 300,000 Flickr.com customers) and then transposes them against the U.S. map—in effect, creating a photo guide of the different places and people in different parts of the country.

As of July 2007, there were more than 2,000 mashups ranging from map mashups to news mashups.¹⁰ More are being innovated every day, at an average rate of around three per day—indicating the richness of the innovation space.

What is the incentive for the large Web companies such as Flickr to offer such free access and play such a sponsoring role? Mashups allow them to tap the creativity of external developers in a way that enhances the visibility and usage of their own products. For example, through the Mappr service, Flickr.com can get more Web surfers (or customers), some of whom might be willing to pay more for premium services. In other words, the Mashup movement enables large Web companies to expand the reach of their Web services platforms to newer markets and customers. As Paul Levine, general manager of Yahoo! Local notes, “We want to encourage community participation (through mashups). It’s essentially research and development and marketing for us.”¹¹

As a true community-based initiative, the Mashup movement also maintains an expectation to give back to the community. For example, in the case of Mappr, the service publishes its own APIs that other developers can use. In short, one mashup can build on top of another mashup by using the appropriate APIs, thereby forming a truly collaborative innovation process.

Tying Together the Common Elements of the MOD Station Model

The three examples of the MOD Station model of network-centric innovation are different in many respects, but they have some common themes (see Table 8.1). We briefly discuss these three key themes.

Table 8.1. Comparison of the Three MOD Station Examples

One theme is that, in each of the examples, the platform for the innovation activities was clearly defined or well specified—for example, the OpenSPARC architecture or the Half Life computer game. The availability of such a structured innovation space serves as a catalyst to bring together a community of innovators and also provided coherence to their creative contributions. While a single entity is generally responsible for releasing the innovation platform to the public domain, the nature of the innovation activities on such a platform is largely left to the community. For example, in the case of computer games, individual mod teams decide the specific nature of modifications they would make to the game.

Another common theme is the presence of some form of community governance. In the case of the OpenSPARC community, a formal mechanism—a governing board—channels and facilitates community leadership. In the case of computer games, the mod communities are more loosely organized around the different online mod forums. The interactions of the community members in these forums provide the context for devising and applying the common norms and values of the community. Community interactions also serve to regulate or validate the quality of the mods and indirectly allow the community members to formulate a shared vision of the desired nature of innovations. In all three examples that we considered, the success of an innovation is largely based on the use of that innovation by the community members. As such, community members exercise considerable influence on the overall innovation agenda and the outputs.

The third common element relates to the intellectual property rights and the incentives associated with the innovative contributions of the community. Our examples suggest that the MOD Station model demands a mix of IP rights mechanisms and incentives applied to promote and sustain community-based innovation activities. It is also evident that open (left) and closed (right) IP rights mechanisms can coexist in many of these contexts and help channel the innovative contributions of the community to specific areas of the innovation platform. For example, by opening up certain parts of the code, game developers can encourage the development of mods related to specific elements of the game. Similarly, in the information services industry, by carefully opening up certain elements of information delivery architecture, technology firms have been able to encourage and promote the creation of innovative mashups. These examples suggest that application of the appropriate mix of IP rights and incentives can help to catalyze community-based innovation activities in ways that benefit all the members of the network, including the firms that contribute the platform for such innovation.

Large Companies and the Role of the Innovation Catalyst

Our examples clearly demonstrate that companies that play the role of the innovation catalyst by contributing the innovation platform to the community can realize several benefits—both direct and indirect. For example, we outlined some of the benefits that Sun derives from its OpenSPARC initiative—expansion of the company’s existing customer base, greater reach into newer markets, exploration of the application potential of the SPARC architecture, and so on. We also indicated the different types of benefits that game developers might obtain from mods associated with their game products—higher sales, longer product lifecycle, larger and more diverse fan community, brand recognition, and so on. In effect, by opening up certain parts of their product or technology architecture for community-based innovation, companies can create win-win situations for all the members of the network.

How can companies adopt the MOD Station model to promote such community-based innovation initiatives focused on certain parts of their product or technology architecture in ways that benefits all the entities involved? What specific capabilities and resources do they need to bring as an innovation catalyst?

We address these questions in detail in the next two chapters. A key observation is that the successful use of the MOD Station model requires a clear understanding of the incentives for the community members to innovate on the platform and to devise and apply the appropriate mix of IP rights mechanisms that would support such incentives. It also demands that companies serve as a true “partner” of the innovation community, and be comfortable with operating in a context where the innovation goals, objectives, and activities are largely shaped by the collective desires of the community members.

Conclusion

The MOD Station model of network-centric innovation is a relatively nascent phenomenon. Most of the applications of this model have thus far been limited to information-based products and services (for example, software, computer games, computer hardware, movies) that are more readily amenable for deploying such a partitioned, community-based innovation initiative. As the trend toward increasing the information intensity of products continues, we are likely to see this model extended to other products and markets.

We have now completed describing the four core models of network-centric innovation. Beginning with the next chapter, we focus on the logical next question—which model is the most appropriate for a specific company? And what does it take to make each model work? We explore these issues by showing how to match the model to the context of the company’s market and environment, and by detailing the competencies and best practices associated with specific roles in each of the models.