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Wednesday, March 16, 2005

Open and Closed Platforms -- For Coffee
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We here at PFF spent a good deal of time discussing the meaning and place of open and closed platforms in the digital world. Indeed, it was a major theme of our Digital Europe conferences.

The Wall Street Journal (subscription required) today has another example of open and closed standards. Coffee makers have been a text book example of open standards -- standard-sized filters could be used within a narrow range of basket or cone-shaped makers. The coffee making process has thus been modularized with different vendors selling makers, filters and coffees -- and consumers choosing between the three. It now seems that this trend is reversing with Kraft introducing a closed-platform single cup "Tassimo" platform to compete with the already-to-market Sara Lee "Senseo" and Nestle "Nespresso" machines. Each machine works only with coffee pods made for only that platform. Thus, it is a textbook case of a vertically-integrated "closed" platform.

Will it succeed? Who knows? Consumers may prefer the convenience or quality, but should also properly be fearful of "lock in." A more integrated platform may produce better coffee -- or not. It is interesting as a business play where an open platform is being challenged by a closed one in the market. By contrast, lawyers are seeking compelled access to the iPod--dubious claims under the antitrust laws, to be sure, but not uncommon of a certain "everything must be open" ideology.

My bottom line: open platforms are generally where consumer preferences will drive markets, but not necessarily; and furthermore that public policy should have little or no concern whether a given platform is "open" or "closed." iPods and Macs are relatively -- but not completely -- closed platforms compared to the more open, modular platforms of Wintel or open-standard MP3 players. Consumer preferences sorts what will succeed and fail based on a stew of qualities including price, quality, "coolness," and so forth. So, is openness good? It depends.

posted by Ray Gifford @ 9:40 PM | Interoperability

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