July 8, 2014

Why Tesla drives faster on open source fuel

image from http://commons.wikimedia.org/wiki/File:Tesla_Model_S_02_2013.jpg. This file is licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license. Elon Musk has “Va Va Voom”. His forward thinking has delivered many successes over the years, from payment provider PayPal, to SpaceX, which manufactures space launch vehicles. No surprise then he has been compared to Tony Stark (Iron Man from the Marvel comic series). However, his latest announcement shows shrewd business judgement, something Musk is renowned for, shining through as he sets his sights on the global car industry.

Musk has open-sourced all of Tesla’s patents. Beyond the goodwill aspect of sharing your ‘secret sauce’ with the world, Musk wants a bigger market audience to play with his tech. Going for a smaller slice of a large market is often better than a bigger slice of a small one. The electric-vehicle market today is just one percent of the entire car industry and Musk’s open source move has positioned Tesla as the industry standard bearer by daring rivals not to use Tesla technology.

What is great about open source technologies, whether it be databases or cars, is the longevity of innovation it fosters. Inevitably, longer term benefits get less coverage in the media than the obvious cost benefits. But companies like SkySQL and Tesla are creating sustainable futures for their customers. SkySQL’s open source database is helping our customers comply with industry regulations that require assurance of long-term access to data. On the one hand this is because of MariaDB’s capacity to read data in obsolete formats. On the other hand, an open source community can maintain old software releases for decades to come. For Tesla, it is about protecting global oil and gas reserves by using electric-powered vehicles.

Some businesses view open source innovation as a risk because they fear their age old ideas will lose value. However it is almost as risky these days to rely on legal protection to guarantee revenue streams. A competitor can always undercut on price while patents create barriers to entry that block innovation for all. Intellectual property disputes have been the basis of legal action between some of the world’s largest technology companies in recent times. Take the feud between Apple and Samsung in the smartphone market, where innovation has started to visibly slow down.

Though open source disruption in the car industry is driven by the US, open source is not a foreign concept to Europe. Nikola Tesla, whose name has been lifted by Elon Musk’s US-based company, was from Serbia. Some of the most important disruptions in enterprise software, including Linux and MySQL, on which MariaDB is based, were driven by pioneering European developers. In fact all three have their roots in Finland.

Sharing of data, driven by consumers, is changing the way businesses are acting. From Facebook sharing our thoughts, to customers on Booking.com sharing reviews of hotels they have stayed in.

The nexus of forces coming from the open source world and the sharing economy is promising. Musk will make the electric-car industry bigger, which will attract talented engineers and this should inevitably lead to superior and cheaper car design. The next best thing will be to use open source and clever marketing to drive down the cost of Tesla cars.

About Patrik Sallner

Patrik joined as CEO in 2012 after running the Content Cloud business at F-Secure where he was also leading the Professional Services function. Earlier, Patrik built up and led the Hosting Line of Business in Nokia Siemens Networks. Patrik has a long background with Nokia where he held various management positions in mobile phone product development, strategy and innovation, including running a cross-functional Corporate Strategy unit called Insight & Foresight. He also worked several years in management consulting with McKinsey & Company in their Paris and Helsinki offices. Patrik has a MSc degree in Technology Management from Helsinki University of Technology as well as an MBA from the Wharton School and a MA degree in International Studies from the University of Pennsylvania.

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