openinnovation oregoninc

Open Innovation:Open Innovation:

““Local Buzz & Global PipelinesLocal Buzz & Global Pipelines””

Discussion with Oregon Innovation OfficeJune 14, 2005Stan Curtis, WW PLM CompetencyWilfred Pinfold, Director Strategy DEG

DRAFT

Agenda

• Global Innovation

• City-State References

• Open Platforms

• Top100 Economies

• Applying it to the Pacific NorthWest

Global Markets …Regional specialization

GLOBAL INNOVATION…

• Hudson Bay – beaver• Homesteads – apples

• MacMillan Bloedel lumber-rail

• Anaconda, mining• Yukon rush, ferries

• Wool, Pendleton• Paper, Weyerhauser• Trucks, PacCar, FTL• Planes, Boeing

• Tek, Mentor• Intel, Microsoft• Expedia, Amazon• ??? Jobs, skills ???

Oregon Territory

Well connected Customers… Fashion-trends accelerating

GLOBAL INNOVATION…

Global-urban markets … job-skills shifting to Services

GLOBAL INNOVATION…

Major Intel Sites Around the World

IrelandIreland

IsraelIsrael

OregonOregon

CaliforniaCalifornia

ColoradoColorado

ArizonaArizonaNew MexicoNew Mexico

MassachusettsMassachusetts

Costa RicaCosta Rica

MalaysiaMalaysia

ChinaChina

PhilippinesPhilippines

RussiaRussia

WashingtonWashington

UtahUtah

TexasTexasIndiaIndia

JapanJapan

Agenda

• Global Innovation

• City-State References

• Open Platforms

• Top100 Economies

• Applying it to the Pacific NorthWest

China joint-ventures …City State development

CITY-STATES

HongKong – Pearl River-hub• Financial, logistics, legal, entertainment • ShenZhen was the 1st china-city-state• Macau• GuangZhou

TiaPei• TSMC= OpenFab• Solectron, Flextronics, BenQ, Quanta= OpenMfg• Acer= Market-branded services

TsingHua• Joint research labs with Boeing, Intel, and Microsoft• Joint innovation centers with IBM, GE

Exchange: …ENX …ANX …JNX …KNX …CNX

CITY-STATES

AUTO Network Xchange (ANX) standards …& clusters

- embedded Controllers… Service-bay diagnostics

- embedded Linux … Call-center “BusinessTone”

>Nagoya, Seoul, ShangHai… & Munich

BIOMED/Healthcare … (BlueGene) & grids

- Electronic Medical Records (EMR) banking…

- Biomed research …protein folding… NatlGeo, WorldGrid

>Rochester, Seattle… Boston, SanFrancisco… NewYork,WashDC

SMB (Small & Medium Business) Partners

- 60,000 ISVs in 55 countries…2000 in India

- China=Auto-dealers… Brazil=Govt.Services… India=SW.shops

>Pune, Bangalore …Munich, Rio de’Janiero …Haifa, DuBai

High Tech … Global Incubators

CITY-STATES

IBM • 8 global R&D labs …• Engineering & Technical Services (ETS) spinoff 1000 experts• 33% basic-research 33% product-driven 33% first-of-a-kind customer-driven• 100 innovation centers, 40 funded including Brazil,Russia,India,China• aligned with Government and Private sectors

Intel• Still need data

100 Venture Capitalists• Including Carlyle, Walden Intl, & 85 of Forbes Midas List• In Palo Alto, Boston, Singapore, Hong Kong, and London

PartnerWorld• 60,000 ISVs in 55 countries including 2000 in India• 30% of IBM revenue, 50% of IBM-services• In Pune, Bangalore, Munich, Rio de’Janiero, Haifa, DuBai

Agenda

• Global Innovation

• City-State References

• Open Platforms

• Top100 Economies

• Applying it to the Pacific Northwest

Open Platforms … new “growth-rings”

OPEN PLATFORMS

Open Source • OSDL Open Source Development Lab• OpenCV computer vision• ORP open runtime platform

OpenFab• SemaTech & NanoTech • EastFishkill• Chartered, Sony, Samsung-design rules

OpenBlade• 25% to 50% marketshare (doubled)

OpenGrid• Boeing/Defense network-centric military

OpenDesign• 1000 Engineer & Technical Services (ET&S) first-of-a-kind

Open Innovation OPEN PLATFORMS

Individual componentsComponent

Value

IT Industry …Technology realigning Value

TECHNOLOGY

Infrastructure Value

Business Value

Services and software to improve business performance

Hardware, software and services integrated into a computing environment

OPEN PLATFORMS

OPEN?

OPEN?

Services Oriented Enterprise … Open Sourcing?The Beginning of the On Demand Era

Source: US Department of Commerce, Sept. 2002, IBM analysis

Client / Server EraPersonal & Departmental Productivity

Mainframe Era

Administrative Productivity

On Demand EraBusiness Productivity & Innovation

Rethinking Core vs. Non-core Processes

100%

0%

% o

f S

ales

10%

IT

Profit

10%

40%

Retained Business Processes

40%

Outsourced Business Processes

= $500B

Global Platforms?

OPEN PLATFORMS

Agenda

• Global Innovation

• City-State References

• Open Platforms

• Top100 Economies

• Applying it to the Pacific Northwest

Top100 EconomiesTOP100 ECONOMIES

Cooperative InnovationTOP100 ECONOMIES

Open Collaboration – “Digital Enterprise” Roadmap

helpdesk?

Open?

Global Eco-Grid: Industry specific supply chains

High Tech: Trade Routes… already started

AUTO industry… (E&E embedded) … shared platforms increasing:AUTO industry… (E&E embedded) … shared platforms increasing:

Platform

Profit-zoneIndustry structure

Auto- Models/year increasing from 35 to 50- 70 % COGS from suppliers- New warranty risks from tires, electronics

(smaller)

(larger)electronics

body-styling

powertrain

30%

$1

$2

$3

$4

$5

$6

$7

$8

Analog Color TVAnalog Color TV

DigitalTVsDigitalTVs

DVD PlayersDVD

Players

New Growth Mature Aging

$9

($ B

illio

n)

Digital Market maturity curve

VCR DecksVCR

Decks

Non-Digital Market maturity curve

Illustrative

Non Digital Lifecycles - 2-6 years

$10

Digital Lifecycles - 6 months -3 years

• Digital lifecycle speed linked to massive value shift related to internet & wireless

• Faster moving digital technology price/performance

• Faster product ramp up

• Narrower window for product introduction, differentiation and profit

Move to digital, shorter lifecycles …

…more complexity

2 Carryover-concepts Carryover-concepts

1 Computer-conceptsComputer-concepts

Global Eco-Grid … more collaboration is underway

Global Lambda Integrated FacilityWorld Map – December 2004

www.glif.is

The Innovator’s Dilemma: …Open?

Performance whichcustomers in the

mainstream market canutilize or absorb

Perf

orm

ance

Time

DisruptiveTechnology

Most-demandingcustomers

Least-demandingcustomers

Figure 1:The Intersecting Trajectories of Improvements that Customers can Utilize, Versus Those that Innovators Provide

TOP100 ECONOMIES

Agenda

• Global Innovation

• City-State References

• Open Platforms

• Top100 Economies

• Applying it to the Pacific Northwest

Portland OpportunityPNW OPPORTUNITIES

Open InnovationPNW OPPORTUNITIES

Open Technology - Cluster

• Portland

• Seattle

Digital City – wireless “lastmile”

Node on the Eco-Grid

IBM first announced the IBM eServer BladeCenter T using Intel-based blades in March, 2004. BladeCenter T is designed to address the requirements of the telecom industry, such as VoIP, softswitches, wireless gateways, call centers and other enterprise environments requiring extremely rugged solutions.

IBM BladeCenter owns 39.2 percent of the blade server market and has been leading the market for seven consecutive quarters, according to industry analyst IDC.

Integrated Product Development (IPD)= Internal + External

Project Development Teams

Concept Plan Develop Qualify Launch Life Cycle

Profit

Satisfied Customers

Integrated Portfolio Management Team (IPMT)

Understand the Market-place

Perform Market Segmen-tation

Perform Portfolio Analysis

Develop Business Strategies& Plans

Align & Optimize BusinessPlansacross BusinessUnits

Manage Business Plan and Assess Performance

Investment Review Board (IRB)

Resources Allocation Investment Priorities Corrective Actions Performance Data

Offering

Past strategies

Market information

Customer feedback

Competitor information

Technology trends

Current product portfolio

Off

eri

ng

/S

olu

tio

n B

us

ine

ss

Pla

n Market Characterization

Customer request Pricing/ Term strategy Distribution strategy IMC strategy Support strategy Fulfillment strategy Performance Risk assessment

Candidate Projects

What is IPD? -> Business Design…Open-by-Design?...GreenDesign?

Open Innovation … a shared reference library… cookbook?

References

1. Open Innovation – Henry Chesbrough2. Elephants Dance – Lou Gerstner3. Global Innovation Outlook – IBM 20054. National Innovation Outlook – www.compete.org5. Beyond Blue – BusinessWeek 18Apr056. Outsourcing Innovation – BusinessWeek 21march057. IBM Prospectus – IBM 20058. Clusters of Innovation – Research Triangle porter019. Grid Economy – North Carolina cohen0310. Designed in Portland – Portland Monthly april05

Connectivity => Productivity

Market ecosystem – renewable lifecycles …shared services

Chemicals and Natural Resources

Fiber

Energy

Chemicals

ERP-schedule

Waste

Recycle

Paper ($100B)

($x00B)

($y00B)

($500B)

DCS PLC

PLM-configure CRM-diagnostics

BPM

Market ecosystem – a matrix of public & private …utilities?

example Eco-system Chemicals and Natural Resources

Natural Resource: Fiber –to- Paper

Energy sourcing: Boilers –to- Power co-Gen

Chemical sourcing: Water –to- Cl02

Operations sourcing: DCS –to- PLC

SW sourcing: ERP –to- data mining

BPM Services: eco-system analysis… embedded-SW for partner-services

Asset m

gmt

Asset m

gmt

Quality

mgmt

Quality

mgmt

Capabilit

y Mgm

t

Capabilit

y Mgm

t

Insurance-option

Equip.maint

Vendor-service

supplier-service

Web-service

“Portal-of-PDX” = Global skills + Virtual services

Business Performance Management is the ultimate capability

Analytic Workers

BI Tools

Process Managers

Workflow Monitors Portals

Managers & Employees

IT Operations Managers

Management Tools

Optimized business results through streamlined business processes, rapid reaction to events, and optimal use of information On Demand

A business strategywith real-time accessto critical business performance indicators to improve business operations On Demand

On Demand Operating Environment

Running an On Demand Business BPMBPM

OpenCommons= Portal-of-PNW + Utility-grid + xxx?

Business Performance Management is the ultimate capability

Analytic Workers

BI Tools

Process Managers

Workflow Monitors Portals

Managers & Employees

IT Operations Managers

Management Tools

Optimized business results through streamlined business processes, rapid reaction to events, and optimal use of information On Demand

A business strategywith real-time accessto critical business performance indicators to improve business operations On Demand

On Demand Operating Environment

Running an On Demand Business BPMBPM

Digital City - node

OpenSupply: WeyCo + UPS + CostCo ?

EverGreen Fleets: Boeing + DCX + PCAR?

Getting started… & sustaining momentum

• OTBC - > Open Innovation Center

• CNIC - > 511 Response Center

• PNNL -> Amber Alert Center

• PDX -> “Port-o-call” Center

• ODOT -> Fleet Mgmt Services

• DAS -> OpenCommons Program Office

• OHSU -> WWAMI, PRAGMA Eco-grid

Shared Public-Private Roadmap

1. Leverage OpenSource and research community-practices• Align economic development clusters… with Open technology investment pools• Align market development planning … with Private-sector platforms and market-launch roadmaps• Establish an Open Innovation management program … aligned with VC portfolio investment stages

2. Benchmark and establish “open-commons” with IBM (RTP) & Intel “digital-city” pilots• Align open-gov source.forge for “first-response” and “utility-management” capabilities• Confirm VoIP web-phone service for pilot-city agencies (open-broadband license)• Leverage World Customs Organization (WCO) technology and security standards• Align “open-commons” pilots/roadmap with IBM-INTEL open-platform (blade-center) for web/teleco

3. Seek Federal-funds for PDX “port-of-call” with PNNL (first-response, utility-mgmt tools)• implement “last-mile” digital-city hubs for Portland/Vancouver metro (Wi-max?)• Setup (lease program?) & install “first-response” (wiPods, wiHubs) for first-response teams• Build pilot “first-response” and “utility-management” capabilities for PDX, Port-of-Portland/Vancouver• Seek federal-funds for disease-alert, eco-warnings …Grid-bridges to WWAMI/PRAGMA

4. Incorporate public-private joint-venture for urban Eco-grid “utility-management”• implement “first-response” emergency vehicle capability with “amber-alert” funding• design “open-port” service-center for other “dial-tones” 311, 411, 511,…811, 911• design fleet-locator for trains, buses, taxis…& cell-payment option?• design Flexicar car-pools for major employers: OHSU, city, IBM, Intel, DCX, Nike

5. Design co-marketing program for “Eco-grid” investment plans• Align “Urban-port-utilities” with key joint-ventures: Boeing-7X7 supplier-grid with japan & china• Align “Fleet-management-utilities” with key joint-ventures: DCX/FLC supplier-grid with japan & china• Align “Market-support-utilities” with key joint-ventures: Nike/W&K retailer-grid with japan & china