February 20, 2007

Happy Birthday Blade.org

Last week I attended a party in San Francisco that was celebrating the first birthday of blade.org. As expected, various VIPs from blade.org and ancillary organizations were present to celebrate, but there were also guests from the VC community as well as two authors/professors namely, Raymond Miles, and Henry Chesbrough. There was the slate of presentations one would expect at such an occasion, but if you were expecting to hear a pitch about how great IBM BladeCenter was, you were in the wrong place. Rather, the tone of the morning was intriguing, as it did not focus on blades per se, but on a far more compelling topic, collaboration in the marketplace.

At the highest level, one could argue the premise of blade.org is simple, get more companies interested in designing blades to fit in the BladeCenter, and then sell more BladeCenters. At one level, this is true; Big Blue likes to sell things and make money just like everyone else. Nevertheless, what is much more fascinating is not what is being done, but how it is being done. In 2006, blade.org had eight companies/members pondering the potential of the blade architecture. That number quickly jumped to 40, and now exceeds 100. At the same time, $1B in VC funding has poured in to member companies. It does not take long to realize that blade.org is much more than a front to promote IBM BladeCenter; rather it is a thriving example of what Raymond Miles dubbed, “Collaborative Entrepreneurship.”

When you look at the array of companies participating in blade.org, you see a wide spectrum of players, not just server, switch, or networking vendors, but component vendors, application developers, integrators, etc. Each of these is bringing complementary expertise to the blade opportunity and while some may be competitors, the embodiment of blade.org is a shared experience aiming to raise the water level for all boats floating in the blade harbor. This phenomenon of implied trust at the highest levels was a focal point for all of the speakers that morning. When such trust can be achieved, then collaborative innovation can take place even in a competitive marketplace.

Until recently, such an approach would be limited to a narrowly defined consortium of interests, or would be treated as suspect by participants, always looking out for the inevitable competitive stab in the back. But as blade.org has illustrated, it is possible to come together in a well-defined and trusted environment to innovate. The financial backing of VCs is evidence of the trust that has been garnered, as VCs are not quick to part with their money unless they have a high degree of faith and trust in the situation. The result is that vendors are looking at the opportunities for blades with a greater deal of interest than might have otherwise occurred. Further, the R&D and S&M efforts of each member have leveraged the investments of others to grow the overall opportunity at much more rapid pace than any single vendor or very small group of vendors could do.

Blade.org typifies an open approach. Yes, open in the sense of technical standards, but more importantly, open in the approach of sharing information, and doing business. The resultant trust encourages all to participate at a greater level and with a higher expectation of success. The recognition of this need for trust is not new in business, as the Japanese keiretsus of the latter 20th century illustrated another approach to maintain the trust, i.e. cross ownership of all the participants. However, this approach was closed by nature, and dependant upon a single source of financing. Blade.org has the best of both worlds, a strong environment of trust, and incentives to contribute, but an open model for participation, financial independence of its members, and an affirming position to independent and collaborative entrepreneurship.

The notion of Collaborative Entrepreneurship in general and Blade.org in particular, is an exciting experiment/activity to watch. We look forward to see what it will have achieved when Blade.org's second birthday comes around.

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