Is information a competitive differentiater?

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I started thinking about the value of information here in San Francisco at the Open Source Business Conference (OSBC), held May 21-22. It's the first day of a two-day conference, and some of the leading experts in open source are here presenting, learning, networking and more. During the opening remarks by John Amato, Vice President & Publisher, Computerworld, and Matt Asay, Vice President Business Development, Nodeable, we discovered that about half the attendees are new to the conference, which is great for open source.

"When transaction costs go away, innovation explodes," said Whitehurst. "With transaction costs going away, we're seeing a different ways to coordinate human behavior."

The first keynote speaker was Jim Whitehurst, President & CEO, Red Hat. Whitehurst focused his talk on how information is becoming the source of competitive differentiation. He started by telling the story of agriculture. Over time, the power and value in agriculture was held by the land owners. Over the last few decades, the value has shifted to the farm machinery manufacturers. Now, the value lies with the information around agriculture. Consider things like hybrid seeds, soil composition and nutrients, best time to plant—all factors that can help maximize crop yields.

Whitehurst then talked about the nuts and bolts of open source—comparing the Industrial Age to the Information Age. Brian Proffitt captured the essence of this concept in his post on IT World:

Specifically, Whitehurst described the invention of the auto lathe in 1810 by Henry Maudslay, which enabled the mass production of standardized hardware, such as nuts and bolts. It would be the availability of such standardized components, approximately 60 years into the Industrial Age, that would spawn a massive explosion of innovation around industrial products.

Whitehurst made a point to note that we are now about 60 years past the invention of the computer. He now sees the standardization of IT components, which are almost as unexciting for IT people as nuts and bolts, as the new platform from which a massive growth of IT innovation will be launched.

Whitehurst also talked about the explosion of innovation in open source. "When transaction costs go away, innovation explodes," said Whitehurst. "With transaction costs going away, we're seeing a different ways to coordinate human behavior."

The value of information depends on whether you can get it and what you can do with it. Essentially, this value is about access and analysis of information. That's why information is the competitive differentiater of the Information Age.

Jason Hibbets is a Community Director at Red Hat with the Digital Communities team. He works with the Enable Architect, Enable Sysadmin, Enterprisers Project, and community publications.



Have you thought about this in terms of information theory? I would argue that data itself is not the competitive differentiator, it is the information that you can access / extract from this data. This is why the data can be made open and freely available; it's the analysis you keep in house. The Netflix prize can be seen as an example of this.

Isn't that ware things get sticky? What various individuals, or corporations think the data holds. What it defines? It's like the U.S. Budget, Depending on whom you listen... each a different story. So it's the data, not the discussion of what the data is telling us. Our understanding of what the data describes even changes, as more data becomes available. Take global hem, ah climate change. for instance. Heated discussion on what the data actually tells us. Some times we are not as smart as we think. Guess there's a data set for that as well..DSM5 :-)

I'm intriguied. Can you say more? Whose theory of information, for instance, are you suggesting will reframe this argument? Shannon's? Someone else's?

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