Amp Up, a wildly popular electronic-music game, is the brainchild of KMS's cherished programmers, who now spend their time trying to keep customers dazzled with upgrades. But a couple of start-ups have ripped off the idea using their own code - which is open source. Now they're demanding that KMS float with the rising tide and join the open-source community. How could the company make money without its IP? And why should it try? Four experts comment on this fictional case study in R0804A and R0804Z. Jonathan Schwartz, the CEO of Sun Microsystems, says that if KMS is confident it knows what its customers will want next - and if it's content with a small corner of the market - it should stay proprietary. But it will pay a reputational price. Eric Levin, the executive vice president of Techno Source, suggests that KMS take a middle path: license its software to third-party companies and add features to promote community building. This approach could fund itself through royalties or fees and would allow KMS to approve or veto third-party products. Gary P. Pisano, of Harvard Business School, points out that an open-source strategy could increase Amp Up's rate of improvement, enhance users' satisfaction with the game, and reduce KMS's development costs. But if the company stops competing on the basis of its code, it had better be sure of the strength of its downstream capabilities. Michael J. Bevilacqua, of the law firm WilmerHale, warns that KMS risks greater liability for intellectual-property infringement if it joins the open-source community, where code carries no guarantee that it doesn't infringe on someone's IP rights and providers offer no indemnification.
Amp Up, a wildly popular electronic-music game, is the brainchild of KMS's cherished programmers, who now spend their time trying to keep customers dazzled with upgrades. But a couple of start-ups have ripped off the idea using their own code - which is open source. Now they're demanding that KMS float with the rising tide and join the open-source community. How could the company make money without its IP? And why should it try? Four experts comment on this fictional case study in R0804A and R0804Z. Jonathan Schwartz, the CEO of Sun Microsystems, says that if KMS is confident it knows what its customers will want next - and if it's content with a small corner of the market - it should stay proprietary. But it will pay a reputational price. Eric Levin, the executive vice president of Techno Source, suggests that KMS take a middle path: license its software to third-party companies and add features to promote community building. This approach could fund itself through royalties or fees and would allow KMS to approve or veto third-party products. Gary P. Pisano, of Harvard Business School, points out that an open-source strategy could increase Amp Up's rate of improvement, enhance users' satisfaction with the game, and reduce KMS's development costs. But if the company stops competing on the basis of its code, it had better be sure of the strength of its downstream capabilities. Michael J. Bevilacqua, of the law firm WilmerHale, warns that KMS risks greater liability for intellectual-property infringement if it joins the open-source community, where code carries no guarantee that it doesn't infringe on someone's IP rights and providers offer no indemnification.
Amp Up, a wildly popular electronic-music game, is the brainchild of KMS's cherished programmers, who now spend their time trying to keep customers dazzled with upgrades. But a couple of start-ups have ripped off the idea using their own code - which is open source. Now they're demanding that KMS float with the rising tide and join the open-source community. How could the company make money without its IP? And why should it try? Four experts comment on this fictional case study in R0804A and R0804Z. Jonathan Schwartz, the CEO of Sun Microsystems, says that if KMS is confident it knows what its customers will want next - and if it's content with a small corner of the market - it should stay proprietary. But it will pay a reputational price. Eric Levin, the executive vice president of Techno Source, suggests that KMS take a middle path: license its software to third-party companies and add features to promote community building. This approach could fund itself through royalties or fees and would allow KMS to approve or veto third-party products. Gary P. Pisano, of Harvard Business School, points out that an open-source strategy could increase Amp Up's rate of improvement, enhance users' satisfaction with the game, and reduce KMS's development costs. But if the company stops competing on the basis of its code, it had better be sure of the strength of its downstream capabilities. Michael J. Bevilacqua, of the law firm WilmerHale, warns that KMS risks greater liability for intellectual-property infringement if it joins the open-source community, where code carries no guarantee that it doesn't infringe on someone's IP rights and providers offer no indemnification.
This is an MIT Sloan Management Review article. China's institutional private equity and venture capital market is similar to that of the United States and Europe, but there are important differences. Many practices that are taken for granted in areas such as Silicon Valley have yet to become routine in China. There is a lack of readily available information about opportunities, entrepreneurs, and companies. In addition, Chinese entrepreneurs know little about finance, corporate structures, and governance, thereby requiring investors to educate them and fill the gaps. Identifies seven disciplines critical to successful investment in China: knowledge and appreciation of the importance of social capital networks, or guanxi; understanding of corporate governance and shareholder rights; the ability to manage intellectual property; the ability to adapt business models to local conditions; the ability to add managerial and technical value to young enterprises; knowledge of the legal structure; and an ability to navigate complex regulatory environments.
Across the S&P 500, companies' sustainable growth rates exceed analyst growth forecasts, which means companies are not optimizing shareholder value, say consultants Rekha Sampath and Ajit Kambil.
John Clough, the CFO of NetRF, a tech firm in Salt Lake City, gets an offer he's not sure he wants to refuse. Benchmark, a Fortune 500 packaged goods company, is looking for someone to join its audit committee. "Would you be interested?" the executive recruiter asks. John's experience with publicly held companies is limited, but he's highly regarded in the financial community for his acumen and probity. At NetRF, a maker of wireless communications equipment, John had championed expensing stock options when it was uncommon for high-tech firms to do so; he'd received a lot of admiring press for that move. In mulling over the offer, the 39-year-old executive and flight enthusiast considers his situation. He loves his work, his Cessna time-share, and the skiing in the Salt Lake area. Board membership would confer a certain amount of prestige, but would he be spreading himself too thin? One colleague extols the virtues of board membership--the opportunity to learn and expand your business network. But the chief outside counsel to NetRF warns that the hours can be considerable and board members' responsibilities (post-Sarbanes-Oxley) substantial. Subsequent meetings with Benchmark's nominating committee, its CEO, and its audit committee leave John with more questions than answers. Should he join the board? This fictional case study outlines the risks and rewards of board service. Commenting on this fictional case study in reprints R0502B and R0502Z are Peter Goodson, a strategic adviser to corporate boards; John F. Olson, chair of the ABA Business Law Section's Corporate Governance Committee; David J. Berger, a partner at the law firm Wilson Sonsini Goodrich & Rosati; and Charles H. King, managing director at Korn/Ferry International.
John Clough, the CFO of NetRF, a tech firm in Salt Lake City, gets an offer he's not sure he wants to refuse. Benchmark, a Fortune 500 packaged goods company, is looking for someone to join its audit committee. "Would you be interested?" the executive recruiter asks. John's experience with publicly held companies is limited, but he's highly regarded in the financial community for his acumen and probity. At NetRF, a maker of wireless communications equipment, John had championed expensing stock options when it was uncommon for high-tech firms to do so; he'd received a lot of admiring press for that move. In mulling over the offer, the 39-year-old executive and flight enthusiast considers his situation. He loves his work, his Cessna time-share, and the skiing in the Salt Lake area. Board membership would confer a certain amount of prestige, but would he be spreading himself too thin? One colleague extols the virtues of board membership--the opportunity to learn and expand your business network. But the chief outside counsel to NetRF warns that the hours can be considerable and board members' responsibilities (post-Sarbanes-Oxley) substantial. Subsequent meetings with Benchmark's nominating committee, its CEO, and its audit committee leave John with more questions than answers. Should he join the board? This fictional case study outlines the risks and rewards of board service. Commenting on this fictional case study in reprints R0502B and R0502Z are Peter Goodson, a strategic adviser to corporate boards; John F. Olson, chair of the ABA Business Law Section's Corporate Governance Committee; David J. Berger, a partner at the law firm Wilson Sonsini Goodrich & Rosati; and Charles H. King, managing director at Korn/Ferry International.
John Clough, the CFO of NetRF, a tech firm in Salt Lake City, gets an offer he's not sure he wants to refuse. Benchmark, a Fortune 500 packaged goods company, is looking for someone to join its audit committee. "Would you be interested?" the executive recruiter asks. John's experience with publicly held companies is limited, but he's highly regarded in the financial community for his acumen and probity. At NetRF, a maker of wireless communications equipment, John had championed expensing stock options when it was uncommon for high-tech firms to do so; he'd received a lot of admiring press for that move. In mulling over the offer, the 39-year-old executive and flight enthusiast considers his situation. He loves his work, his Cessna time-share, and the skiing in the Salt Lake area. Board membership would confer a certain amount of prestige, but would he be spreading himself too thin? One colleague extols the virtues of board membership--the opportunity to learn and expand your business network. But the chief outside counsel to NetRF warns that the hours can be considerable and board members' responsibilities (post-Sarbanes-Oxley) substantial. Subsequent meetings with Benchmark's nominating committee, its CEO, and its audit committee leave John with more questions than answers. Should he join the board? This fictional case study outlines the risks and rewards of board service. Commenting on this fictional case study in reprints R0502B and R0502Z are Peter Goodson, a strategic adviser to corporate boards; John F. Olson, chair of the ABA Business Law Section's Corporate Governance Committee; David J. Berger, a partner at the law firm Wilson Sonsini Goodrich & Rosati; and Charles H. King, managing director at Korn/Ferry International.
A study indicates that on-line shoppers would rather customize Web site information themselves than have personalization software do it for them. But the best customer-retention strategy may be a combination of both approaches.