Everywhere you look these days, new ideas are overturning long-held assumptions about business. One radical concept that has gained popularity is open-source software. Even though no one owns open-source programs like Linux and Apache, their quality often exceeds that of programs developed and sold by for-profit giants. Until now, companies have been largely passive players in the open-source movement; they’ve made money through complementary—and proprietary—services and hardware. But this summer, Hewlett-Packard plunged into the open-source world when it released the entire source code of its e-speak software to the public (www.e-speak.net). And the company will soon give up control over the program’s development. HBR’s John Landry spoke with Rajiv Gupta, the general manager of e-speak, to find out why. What is e-speak? At its core, e-speak is software that facilitates the creation of relationships—between businesses, between people and businesses, and between people—through the ad hoc discovery and interaction of web-based services or e-services. If you wanted to build to relocation e-service, for example, you could rely on e-speak to quickly find and establish business relationships with key partners such as shipping, insurance, and real estate e-services. E-speak provides the standards and the open environment for building such relationships, and it enables relationships to adapt automatically to changing conditions. Although e-speak uses the Internet to automate the buying and selling process, it’s bigger than the B2C and B2B hubs now emerging. It does not, for example, impose industry boundaries. Rather, it allows companies from different industries to participate in what some analysts are calling collaborative commerce. The software will automatically direct a company to the combination of services it wants, similar to the way Napster takes you to the computer that has the music you want. What is HP’s plan for e-speak? We knew that the more businesses and Web sites that adopted e-speak, the more valuable it would become. But we also knew that people wouldn’t embrace e-speak if they thought HP was going to charge fees for transactions or reserve a privileged position for itself on the platform. And e-speak will not be as rich in capability if all of the future innovations and enhancements come only from HP. So we decided awhile ago to give away e-speak; its source code is fully available and nonproprietary. The future development of e-speak will be determined by an open-source governing council. HP will be represented on the council, but it will have no control over how the basic software evolves. I haven’t heard of another for-profit company that developed a product with the intention of relinquishing all control. How did you convince HP to invest heavily in development? Everyone understood that the impact of e-speak would be limited with a proprietary approach. And we in the e-speak group were convinced that this was the future of computing, of the Web, actually of all commerce—and that HP needed to get on board early. I think HP’s management was convinced as much by our passion as by our demonstration of business value. And having Carly Fiorina as an ardent supporter helped. The investment is a big risk, and it wouldn’t have happened if HP didn’t have a leader who encourages passion and a spirit of invention. Open source is where you’ll find a lot of the passion in software these days. And appealing to that passion certainly helps companies in the war for talent. Even though we can’t give our developers the huge (if often elusive) stock options theyd get in a start-up, we’ve kept turnover low because our employees buy into what we’re doing. That includes outside programmers as well. We’re starting to get help from volunteers who contribute to the code, similar to what happened with Linux. They think it’s cool, and they think it’s good for society. As a result, by the way, e-speak development didn’t cost HP nearly as much as it would have if we’d decide’d to keep it proprietary. Finally, HP’s culture is more public-minded than most high-tech companies. That figured not only into our decision to release e-speak’s code but into its entire development. We made lots of little choices when designing it, and in all cases we chose the nonproprietary path. Okay, but HP still has shareholders to satisfy. Where will the profit come from? E-speak is a great way for HP to expand the market for the products and services it does sell. E-services are at the core of HP’s new strategy, and e-speak will dramatically reduce the cost of developing, marketing, and delivering those services. And the expertise we gained when developing e-speak will keep us abreast of the emerging Internet services marketplace. Our competitors stand to benefit from e-speak as well, but we’re confident that our offerings will win out in the long run. We’re already benefiting from a “halo effect” in marketing. I’ve heard of customers who bought HP products mainly because they were impressed with what we were doing with e-speak. Do you expect other companies to develop open-source programs? Yes. People will realize that the value of open source is in the for-profit services that go with it, not the software itself. And they’ll learn that a proprietary approach just can’t compete with the growing number of open-source programmers. No one company has the creative bandwidth to match the larger community of software developers.
