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The evolution of open collaboration in business models

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Disruptive change has always allowed organizations or individuals to redefine markets and to upset established industry paradigms and thought patterns.

Information technology is also undergoing significant disruptive change, including changes in the economics of chip development and manufacturing, the growth of new workload types such as big data, cognitive computing, and the Internet of Things (IoT) as well as changes in how information technology (IT) solutions are developed, brought to market and deployed.

Forces at play – Moore’s Law and growth in new workloads

In 1965 Gordon Moore, a co-founder of Intel, observed that the number of transistors per square area on an integrated circuit was doubling approximately every 18-24 months. His observation that this trend would continue, now coined “Moore’s Law”, has been an axiom for the IT industry.

The real ramification of Moore’s Law was economic, not technical. The doubling of transistors on an integrated circuit delivered more transistors for a lower total unit cost. The effect of lowering chip costs drove rapid growth in information technology capabilities which has benefited consumers of computing technology. Unfortunately, that economic trend is slowing.

Open collaboration

In 1998, the Open Source Initiative was formed. In the past few years, the direction of many major organizations has pointed increasingly towards the exploitation of open-source software. It is being developed as sets of micro-services that are composed so that each service can be “fit for purpose” rather than one-size-fits-all. This approach can result in simpler code which can be advanced more rapidly than conventional monolithic, broad approaches.

It is not just software that is moving towards openness. Business models are also moving towards increased collaboration to be competitive.  In a European survey done by A.T. Kearny, 71 percent of respondents expected more than 25 percent of their revenues to come from collaborative innovation by 2030.

The OpenPOWER Foundation

The OpenPOWER Foundation was announced in 2013 by IBM, Google, Mellanox, NVIDIA and Tyan. This was a major business model shift for IBM — going from designing and manufacturing proprietary chips and servers to opening its designs to others.

When creating OpenPOWER, the five initial member groups took a page from the highly successful ARM business model. What is most interesting about ARM Holdings is that it manufacturers no chips of its own, but rather designs and licenses its technology to a wide range of clients.

IBM and the other OpenPOWER members went even further than the ARM chip model and created an entire open ecosystem. This business model has opened IBM’s current POWER8 chip design, unlike Intel, making this chip available so that other companies can acquire and modify it based on their needs.

The rise of accelerators

When price and performance improvements cannot be gained by simply shrinking the manufacturing process technology, other avenues need to be explored.  One of those other avenues is accelerators. The secret to successfully offloading work to an accelerator is simple: the benefit of the offload must be greater than the cost.

One of the objectives of the OpenPOWER Foundation has been to lower the cost and improve the performance of applications by leveraging two primary classes of accelerators, FPGAs and GPUs. IBM and its partners have gone further and the latest drop of POWER8 includes a new capability called NVLink which allows an NVIDIA GPU to talk directly to the POWER8 chip at very high bandwidth.

But wait… there is “Moore”

At the 2016 Hot Chips conference in Cupertino, California, IBM released details on its processor plans for the next generation of Power chips — POWER9.  IBM’s strategy is to make a family of chips where each member can be optimized for different use cases along with upping Power’s ability to use off-chip accelerators.  Both strategies are designed to keep Power firmly on the Moore’s Law economic curve.

The road ahead

The lesson of the open source movement is simple. By collaborating with others, the final product is better –- better quality, better function and better time-to-value.  The increased demand for workloads such as analytics is driving the industry to look for affordable ways to service that demand.  A go-it-alone approach based upon improvements in chip lithography alone is unlikely to be successful.

Discover how IBM Power Systems helps clients tap into unbeatable price-performance for data-intensive workloads, faster insights, and a superior scale-out strategy.

This discussion is based on a whitepaper titled “Open Collaboration and IBM Power Systems” co-authored with John Banchy. For a more in-depth discussion on these topics reach out to an IBM representative or Business Partner.

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George Dodson

Very interesting changes in both speed and cost by tailoring computer components to keep close to Moore’s Law!