Category : Innovation

Everthing on innovation & their relationship with patents

Op maandag 5 februari 2018 organiseert IPEG Consultancy een “Workshop Blockchain, Technische & Juridische Uitdagingen“. De workshop zal worden gehouden bij Deloitte, Gustav Mahlerlaan 2970 Amsterdam (gebouw “The Edge”).

De starttijd is (exact) 14.00 uur, eindtijd omstreeks 17.30-17.45 uur.

Inschrijving: klik hier

Blockchain voor juristen, een introductie.

Jacob Boersma en Inger Bijloo (Deloitte) zullen blockchain technologie toelichten. Hoe werkt het? Wat zijn verschillende toepassingen? Wat zijn de juridische uitdagingen?

Jacob en Inger introduceren hun topic op deze video: https://youtu.be/TEb9cJveaHU

Live Contracts

Arnold Daniels en Rick Schmitz (LegalThings). De oprichters van start-up Legal Things vertellen over hun visie op de toekomst van contracteren. Zij geloven in “live contracts”, een oplossing die de natuurlijke taal van een juridische contract, verbindt met de technische voordelen van een smart contract in programmeertaal.

Arnold introduceert zijn topic op deze video: https://youtu.be/sQWzX8EASro

Smart Contracts, technische en juridische implicaties

Sandra van Heukelom (Pels Rijcken) en Olivier Rikken (Axveco). Als auteurs van het rapport  “Smart Contracts als specifieke toepassing van de blockchain technologie ” vertellen zij over hun ervaringen met concrete Blockchain en Smart Contract toepassingen én de technische en juridische implicaties daarvan.

Sandra introduceert haar topic op deze video: https://youtu.be/rOAPO54LbY8

Olivier introduceert zijn topic op deze video: https://youtu.be/G0BWf6aD1Uk

De burger in controle over zijn eigen persoonsgegevens, via self sovereign identity op blockchain

Pieter Verhagen (Techruption Blockchain/TNO), Andrew Mooijman (Rabobank Fintech & Innovation) en Vonne Laan (Van Doorne). Pieter Verhagen is de programmamanager en mede-oprichter van Techruption Blockchain. Pieter zal samen met Andrew Mooijman een nieuwe decentrale manier introduceren waarop personen zelf hun persoonsgegevens gevalideerd kunnen delen, gebruik makend van blockchain. Pieter en Andrew zullen voorts in deze sessie een demo verzorgen van het Self Sovereign Identity Framework. Samen met Vonne zullen zij ingaan op de meest prangende juridische vragen, zoals aansprakelijkheid en de GDPR (General Data Protection Regulation).

Pieter introduceert zijn topic op deze video: https://youtu.be/FnaSqzeobzo

Andrew introduceert zijn topic op deze video: https://youtu.be/9VqC9EqWlLo

Vonne introduceert haar topic op deze video: https://youtu.be/UhMPE-sqIN4

Lagerhuis Debat

Indien zich voldoende deelnemers aanmelden zal de middag worden afgelsoten met een Lagerhuis Debat onder leiding van Gijs Weenink (DebatAcademie) aan de hand van stellingen over diverse blockchain onderwerpen.

De dag zal worden voorgezeten door Huibert-Jan van Roest

Workshop Blockchain 05022018

Author: 9 months ago

Creativity and innovation starts with thinking differently. It is a process of questioning, experimenting, learning and adapting. It requires an appetite for risk, a willingness to question, an open mind to look at things without preconception and perhaps most importantly, patience and perseverance. It can take many forms and the process itself involves ambiguity, controversy and non-linearity.

Creativity and innovation within sales & marketing:

Many mistakenly assume that creativity and innovation is the preserve of the R&D function or the manufacturing or production facilities within a company, and may only be found in those parts of the organisation. The sales and marketing functions within a company are often times overlooked.

This is a major mistake as sales and marketing can be a hotbed of creativity and innovation. Let us examine some of the different activities of sales and marketing in order to illustrate this.

  • Competitive analysis
  • Customer understanding
  • Market intelligence
  • Product analysis
  • Sales techniques

Competitive analysis

This is about identifying competitors and evaluating their strategies to determine their strengths and weaknesses relative to those of the company’s own product or service. Competitive intelligence is the action of defining, gathering, analysing, and distributing intelligence about products, customers, competitors, and any aspect of the environment needed to support executives and managers making strategic decisions for an organization.

Competitive intelligence is the gathering of publicly-available information about an enterprise’s competitors and the use of that information to gain a business advantage. The goals of competitive intelligence include discerning potential business risks and opportunities and enabling faster reaction to competitors’ actions and events.

Customer understanding

Customer intelligence is the process of gathering and analysing information regarding customers; their details and their activities, in order to build deeper and more effective customer relationships and improve strategic decision making.

It includes

  • Customer Development Cycle
  • Customer Information
  • Customer Needs & Buying Habits
  • Customer Service Procedures
  • Proprietary Customer Lists
  • Proprietary Information Concerning Customers

Market intelligence

Market intelligence is the information relevant to a company’s markets, gathered and analysed specifically for the purpose of accurate and confident decision-making in determining strategy in areas such as market opportunity, market penetration strategy, and market development.

Such information may include market survey data; marketing and sales promotion plans; marketing plans; marketing techniques; focus group data; internal analysis of current economic factors; and methods for obtaining greater market share.

Product analysis

Product analysis can take different forms but in general it means asking questions about a product and forming answers. It can mean experts analysing a product or members of the general public or potential customers/groups of people. Product analysis can take place at almost any stage of the design process. It may include product life cycle analysis; product pricing formulas and methods; product roadmaps plus more.

Sales techniques

Some describe sales as art rather than a science. That said there are processes, systems and associated data linking to sales. These may include sales calls reports; sales forecasting techniques; sales techniques; strategic alliance information; supply and demand models plus much more.

There are specific practices that sales people can utilise to engage more leads and to close more deals. The art versus science debate has gone on for many years. However there is a definite science, an intellectual, systematic method that can help sales people transform prospects into customers.

Protecting all of this creativity and innovation

Intellectual property is a means to protect different forms of creativity and innovation. It is most important to realize that there are multiple regimes of intellectual property rights, such as patents, trademarks, designs, domain names, copyright and trade-secrets. These are valuable assets for any business, possibly among the most important that it possesses.

But what form of IP is best suited to protected the creativity and innovation highlighted within sales and marketing?

I would argue that trade secrets should be the first form of IP protection considered.

Trade secrets

A trade secret is a formula, practice, process, design, instrument, pattern, commercial method, or compilation of information which is not generally known or reasonably ascertainable by others, and by which a business can obtain an economic advantage over competitors or customers. The scope of trade secrets is virtually unlimited.

A trade secret is therefore any information that is:

  • Not generally known or readily accessible to the relevant business circles or to the public.
  • Confers some sort of economic benefit on its owner. This benefit must derive specifically from the fact that it is not generally known, and not just from the value of the information itself. It must have commercial value because it is a secret. Commercial value encompasses potential as well as actual value.
  • The trade secret must be subject to reasonable steps by its owner to keep it secret. What is reasonable can vary depending on the specific circumstances.

A trade secret continues for as long as the information is maintained as a trade secret. However, information may no longer be considered to be a trade secret once it becomes easily accessible, is no longer properly protected or has no commercial value.

Trade secrets involve no registration costs. Of course, there may be costs associated with the administrative, technical and/or legal barriers the company puts in place to protect its trade secrets. Trade secret protection does not require disclosure or registration, unlike for example a patent which becomes public information. Trade secret protection is not limited in time, unlike for example a patent which only lasts for twenty years. Trade secrets have immediate effect, unlike for example a patent which may take a few years to be granted.

Trade secret asset management

Trade secrets are an important, but an invisible component of a company’s intellectual property portfolio of assets. They can add tremendous business value, so they need to be properly and professionally managed, and looked after. Trade secrets may be found throughout an organization. A significant number of trade secrets will be found within the sales and marketing activities of a company.

Trade secrets should be on the agenda of any in-house intellectual property function as well as on the agenda of any Legal or IP Firm advising organizations. Trade secret legislation has strengthened in key jurisdictions, interestingly at a time when other forms of IP seem to be weakening in some locations.

Trade secrets can be the crown jewels in an organization’s intellectual property portfolio. They possess some clear advantages over other forms of intellectual property. However, trade secrets only work if managed properly and they are well looked after. Proper and professional trade secret management requires a thorough understanding of this particular form of intellectual properly, a fit for purpose trade secret management process underpinned by a robust trade secret management system, plus a good governance process together with regular trade secret audits.

Trade secrets are fragile and therefore require some TLC. The in-house Legal / IP Function and/or the external Legal / IP Firm advisors to an organization should not overlook the creativity and innovation within sales and marketing and give some serious thought to trade secret asset management there.

Donal O’Connell, IPEG consultant, managing director Chawton Innovation Services Limited

Author: 1 year ago

Although not limited to software, open source is dominated by this particular technology and by the open source software community. Open source software does not just mean access to the source code. The distribution terms of open-source software must comply with the following criteria:

  • There must be free redistribution.
  • The program must include source code, and must allow distribution of the source code along with the compiled form.
  • The license must allow modifications and derived works, and must allow them to be distributed under the same terms as the license of the original software.
  • The license may restrict source-code from being distributed in modified form only if the license allows the distribution of “patch files” with the source code for the purpose of modifying the program at build time.
  • The license must not discriminate against any person or group of persons.
  • The license must not restrict anyone from making use of the program in a specific field of endeavour.
  • The rights attached to the program must apply to all to whom the program is redistributed without the need for execution of an additional license by those parties.
  • The license must not be specific to a product.
  • The license must not place restrictions on other software that is distributed along with the licensed software.
  • The license must be technology-neutral.

There are many different variants of open source licenses (Apache, GPL, Lesser GPL, Eclipse, etc.) with some subtle and not so subtle differences between all of these variants.

It’s free:

Open source software is software that is freely licensed to use, copy, study, and change the software in any way, and the source code is openly shared so that people are encouraged to voluntarily improve the design of the software.

This is in contrast to proprietary software, where the software is under restrictive copyright and the source code is usually hidden.

This has made open source software very attractive to many companies.

Open source software is free, which is good. But is it really free?

Total cost ownership:

Total cost of ownership is a financial estimate intended to help buyers and owners determine the direct and indirect costs of a product or system. It is a management accounting concept that can be used in full cost accounting.

The average price of a new car in the USA tops $33,000, according to car-buying site Kelley Blue Book, so buying a vehicle is a major financial move. While many consumers may focus on the sticker price or the monthly payments, that overlooks many other costs. You have license fees, registration fees and taxes. You need to buy insurance, fill the gas /petrol tank, have regular maintenance, etc. And your car loses value from depreciation every day you own it. The total cost of ownership of a new car is not the same as the sticker price.

The same applies for a software product. The total cost of ownership is the purchase price of the software product plus all of the additional direct and indirect costs associated with taking the software product into use.

When choosing among alternatives in a purchasing decision, one should look not just at the software product’s short-term price, which is its purchase price, but also at its long-term price, which is its total cost of ownership.

The software product with the lower total cost of ownership is the better value in the long run.

The purchase price of the open source software product is zero, but what is its long-term price or total cost of ownership?

The components:

In order to calculate the long-term price or total cost of ownership of a software product, one needs to identify all of the different components associated with taking a software product into use.

I suggest that these include at least the following:

  • The initial license fee for the software product (zero in the case of an open source software product).
  • Any costs associated with hardware or software tools to develop or test the software product.
  • Any costs involved with customising or configuring the product.
  • Any associated hardware costs to deploy the software product.
  • Any hosting costs.
  • Any maintenance costs.
  • Any support costs.
  • Any additional software license costs.
  • Any costs associated with feature or functionality updates.
  • Any license costs to access other 3rd party software.
  • Any insurance costs.
  • Any direct or indirect costs associated with future updates / upgrades.
  • Any training costs.
  • Any warranty costs.
  • Any direct/indirect liability costs.

This list is not exhaustive and there may be other components to consider.

Costs associated with open source software risks:

Of course, total cost of ownership is an issue for both proprietary software products as well as open source software products.

However, some additional components may need to be consider when trying to calculate the total cost of ownership of an open source software product, namely the costs associated with managing the risks involved, which divide out into the following categories

  • Legal issues
  • IP issues
  • Operational issues
  • Security issues
  • Business issues

(These additional components are explored in more detail in another paper already published).

The bottom line:

When you are comparing cars you like, you should go beyond sticker price. You should research the ongoing costs of driving and maintaining each model, so that you get a true understanding of affordability. A realistic estimate of a vehicle’s total cost of ownership is crucial in helping you choose a car that fits your budget. The same applies to purchasing a software product, regardless of whether it is an open source software product or a proprietary one.

Donal O’Connell

Author: 1 year ago

Yesterday the “Startup Fest Europe” had its kick-off meetings and formal opening in Amsterdam with innovators from large companies from US and Europe. Start up festival is an European festival of events that help startups grow faster by bringing together founders, investors, business leaders and developers around specific themes (or verticals). It is held in various Dutch cities from 24 – 28 May 2016. The program can be found here.

Not usually high on the agenda of start-ups is intellectual property. Most of them can only think of patenting their innovation, be it as a prerequisite of investors for safeguarding their investment or as a intended “protection” from competition. However Intellectual Property Management is more than just that. We blogged about the subject many times on the IPEG blog.

We offered StartUpDelta when it as still in its infancy to assist start-ups in their initial stage with intellectual property issues for free. Unfortunately this offer was never followed up. This seems to be the place to reiterate this offer.

IPEG offers a max. of three hours for any technology-start-up in The Netherlands that has issues, questions or ideas on intellectual property at no costs during the StartUp Fest and one month thereafter.

Please contact us at info@ipeg.com.

Author: 2 years ago
Tomlinson’s legacy: the ubiquitous @
Letters and numbers are for words and figures, both important to humans. But computers need more abstract instructions, requiring coders to reach for their % and their *, the { and the ], to tell machines what to do. In 1971 Ray Tomlinson, who died on March 5th, invented a way to send e-mails from one mainframe computer to another (previously, e-mail only worked between users of a single machine). He picked one of the remaining rarely used symbols. Since then @ has conquered the globe: a character that might well have been left off keyboards (it replaces a word of merely two letters in English) is now universal. Speakers of other languages have chosen more creative names than “at”. Greeks call it a papaki (“duckling”, for a purported similarity to comic-book ducks); in Italian it is the chiocciola (“snail”); in Danish, snabel-a (“elephant-trunk A”). With lives around the world governed by e-mail, Mr Tomlinson’s legacy is secure.

The Economist Espresso, Saturday March 12, 2106
Author: 2 years ago

Recently the Dutch financial newspaper “Het Financiele Dagblad” spent an article (” (“spin-offs rely on deep pockets University holding“) on how (un)successful Dutch universities have been with their academic spin-offs, how many have been able to actually provide enough starting capital to give the spin-off a head start? How many universities only provide advice, but no capital? Some universities have set up special Holding companies to hold the shares (or part of it) in the spin-off, provide licenses under the academic inventions in patents necessary to operate the spin-off or simple act as a business advisory to the newly set up companies that come out of academic research. Only a handful of them have been able to gather enough funds to also financially support the academic spin-offs. The University of Leiden has “Libertatis Ergo Holding”, VU University in Amsterdam has “Ooievaar Holding”, (Technical) University Twente operates their ” Technopolis Twente” holding company. According to the finding of Het Financiele Dagblad the differences between the various holdings are substantial, some of them only “hold” legal title to a part of the shareholding in the spin-off, some have financial buffers enabling them to provide starting capital. Some universities have no holding or other form of formal participation in spin-offs at all, like the University of Tilburg.

Two universities (AMC -the medical group of the University of Amsterdam and Utrecht University have considerable financial holding s of approx. 44 million euros (2014), partly due to the sales of biotech company ChromaGenics to Crucell and the sale of software maker Euvision to Qualcomm in the US. Other sources of income are license income under the intellectual property on the inventions done under the academic umbrella.

Two universities have chosen not to directly participate financially in their spin-offs, but rather invests in third party Investment Funds managed by external, independent management. There are no clear rules on when and how universities can support their spin-offs.

On the same page in Het Financiele Dagblad reference is made to the situation in the United Kingdom. An example is Imperial College who set up a company “Imperial Innovations”. Other UK universities also work together with this entity. A rather odd quote by the Vice Chairman of Leiden Universiteit (Willem te Beest) appeared He was being quoted as saying:

The IPO is the dumbest thing Imperial College ever did, as they lost all their patents in one strike

We asked Imperial College and Imperial Innovations for their comments. Here is what they have to say:

“Please allow me to correct any misunderstandings. Imperial College has not lost all of its patents. For over 20 years it has assigned its patents to a separate professional licensing company (Imperial Innovations: IVO) in return for a share of future proceeds. This arrangement did not change as a result of the IPO. The only change is that Imperial College no longer has a controlling equity stake in IVO, and instead has a much tighter contractual relationship to ensure that it receives the technology transfer services it requires in a high quality manner. The IPO has allowed Imperial to gain access to a balance sheet fund of over £0.5 billion GBP of patient capital to invest in university spin-outs, and to gift its endowment fund with a multi-million pound sum in the form of cash and shares held in IVO (it owns 17% of a company currently valued at £660m GBP). Imperial College continues to retain a seat on the board of Imperial Innovations and enjoys a close working relationship with the technology transfer unit of IVO.

As such, whilst the model adopted by Imperial College may not be suitable for all institutions, to call it ‘dumb’ seems to not reflect the results achieved to date.

Imperial College London has operated with a separate holding company for its intellectual property assets for many years – Imperial Innovations Limited. This is the prevalent UK model for larger universities. UK universities are charities and cannot trade, hence they generally place their IP assets and spin-out shareholdings into a separate vehicle. This allows the company vehicle to hire a specialized and professional staff dedicated to translating the university’s IP assets into societal impact and commercial gain. The university routinely transfers ownership of its IP assets to Imperial Innovations in return for a significant share of future revenues from licensing and/or equity realizations.

In 2006, due to the lack of venture capital to invest in early-stage university start-ups and to scale them up, Imperial took the decision to list Imperial Innovations on the London Stock Exchange (AIM: IVO). This allowed the company to raise a substantial amount of capital to invest in new spin-outs. Since 2006 IVO has invested £236m GBP into UK university spin-outs and the portfolio has raised a total of £1.3billion GBP. Not only has Imperial realized a very substantial sum in cash, equity and cost-savings since then, but it retains the full services of a professional TTO and it (and its academic inventors) continue to receive a share of future proceeds from any patents filed or spin-outs formed. More importantly though, it has access to venture funding spanning the very earliest stages of IP development (e.g. £25k GBP) through to investments such as the £25.5m GBP invested by the company into Circassia, an Imperial spin-out now listed on the London Stock Exchange. This long term funding from IVO’s balance sheet represents a stable longitudinal source of finance for university spin-outs which often require gestation periods of 8-15 years to an exit event(I.e. much longer than the typical 6 year investment periods of most 10 year venture funds).

Imperial Innovations is unusual in combining a technology transfer model alongside an investment model. It works for Imperial College, but others have taken a different path. E.g. Some UK universities have partnered with IP Group and Mercia (which are also listed patient capital balance sheet investors) whereas others such as Oxford have raised their own fund in return for an option to invest in their spin-outs.

It is important to recognize that there is no ‘one-size-fits-all’ solution for this newly developing sector. Each university operates differently, with different cultures and drivers. As such, each university will find its own path with respect to the technology transfer and funding solution that suits it best.

So whats the conclusion of all thi: the comment by a the Vice Chairman of Leiden University seems therefore a bit, well shall we say…”dumb”? We are confident that he will revise his opinion once he reads the above comments of Imperial Innovations.

People who Live in Glass Houses Should Not Throw Stones Proverb

 

Author: 2 years ago

On Tuesday March 24, the Lisbon Council  launched a new Study,  “2015 Intellectual Property and Economic Growth Index: Measuring the Impact of Exceptions and Limitations in Copyright on Growth, Jobs and Prosperity” by Benjamin Gibert. The Index – the result of a of a year-long research project – examines the relationship between economic growth and intellectual property regimes in some of the world’s most innovative economies.

The report builds a system for measuring the impact of exceptions to copyright on economic growth and finds that countries that employ a broadly “flexible” regime of exceptions in copyright also saw higher rates of growth in value-added output throughout their economies.

Out of many countries it appears that copyright protection in Europe is almost nowhere as strict as in the Netherlands. According to the Study, in this digital age this puts a brake on the growth of the Dutch economy.

Economic growth, according to the study benefits from ample opportunities to software, music, movies and news sharing over the internet. “In the digital age, access to basic content, as well as opportunities to link that to mix, copy, and especially to share, writes Benjamin Gibert, the author of the report.

The conclusion is especially relevant for the Netherlands, that of the eight countries surveyed, the least flexible legislation on copyright. On a scale of 1 to 10 scores a 5.9 Netherlands. France and Japan stand with a 6.3 on a shared sixth place, and are thus slightly more liberal than the Netherlands. The sharing of creative products via the Internet is the easiest in the United States, which leads to a 8.1. European countries score lower than the US because the number of exceptions for libraries or for educational purposes, is limited. Netherlands accepts exemptions from copyright slower when it comes to parodies, reviews and scientific purposes. In Europe, the copyright legislation around has hardly harmonized, in contrast to the patent legislation.

A flexible interpretation of legislation on copyright, the study clearly contributes to the growth in the publishing industry, the world of television and in the ICT sector (Information and Communication). At the same time show greater freedom to software, music and written articles to share, contribute to employment and growth in the economy as a whole.

The conclusion of The Lisbon Council goes against the idea that it is necessary precisely stricter legislation to boost economic growth. The creative industries, including many media companies and software makers have long lobbied for a strict interpretation of copyright because only in this way could recoup their investments

The study signals a change in trend, especially in the music industry. The International Federation of the Phonographic Industry (IFPI), lobbied in the past always tough legislation, but now realize that the value of creative products is increasingly determined by the attention she managed to generate. Through social media arise communities generate income in a different way. The paid acquisition of the product is correctly less important.

(from Het Financieele Dagblad, Netherland’s main financial newspaper of Wednesday March 25, 2015)

Author: 3 years ago

How Nokia’s smartphone software strategy failed and ultimately killed the brand.

Much has been written about the ups and downs of the cellular / mobile phone industry over the past 25 years, and particularly the smartphone industry in more recent times. There seems to be a rule in this particular sector that the leading companies eventually lose their positions – often quickly and brutally. Mobile phone champion Nokia, one of Europe’s biggest technology success stories, was no exception, losing its market share in the space of just a few years.

In 1999, one in every three phones sold in the world was a Nokia handset and the Nokia brand was the 5th most recognisable brand in the world. Not so long ago, the thirteen note ringtone of a Nokia handset was the de facto soundtrack of the mobile revolution. By 2007, Nokia had achieved a market dominating position with more than 40% of mobile phone sales worldwide. But consumers’ preferences were already shifting toward touchscreen smartphones and mobile applications. With the introduction of Apple’s iPhone in the middle of that year, Nokia’s smartphone market share shrank rapidly and revenue plummeted. On 25th April 2014, Microsoft Corp. announced it had completed its acquisition of the Nokia Devices and Services business for US$7.2 Billion, and just recently announced plans to stop using the Nokia brand on its handsets altogether. Nokia as a brand has all but disappeared.

The demise of Nokia has mystified and fascinated many, given the tremendous success it enjoyed during the late 1990s and early 2000s, its roots in Finland, and its historical ability to re-invent itself. So where did it all go wrong for Nokia? In practice, Nokia died from a thousand cuts rather than any one specific mistake, but the software cut was the deepest.

Mobile Phones become Smartphones

The convergence of digital technologies, the emergence of the mobile Internet and advances in technology integration enabled the smartphone era. The biggest issue Nokia faced was that they were a hardware company and not expert in software and software management. Any company switching from hardware to software or vice versa faces major challenges and Nokia was no exception. Throughout much of Nokia there was a lack of understanding of the significance of software, how to manage it and what appropriate business models to adopt. The company was much more at ease with mobile communications technology and hardware such as electronics and mechanics, but faced major difficulties understanding, appreciating and managing software.

Building a Software Organisation

At the time the smartphone market development started, Nokia’s senior and middle management was populated by people with mobile phone business and mobile hardware backgrounds. Most were very experienced and capable people, but lacked experience of software and Internet based business models or of leading large software development organisations. The company could have aggressively hired Silicon Valley or software industry experts in the early 2000s to prepare for smartphone and online service development. This may have injected some much needed software and Internet business understanding and strategy. Instead, Nokia chose to look internally for its software strategists and leaders. At that time, software development process and discipline was lacking in many key teams – with the possible exception of cellular software – and this was impacting product quality and slowing progress in developing a smartphone platform.

It’s only software” was a common refrain in Nokia, trivialising the problems associated with managing the increasingly complex software technology and architecture. Senior management could easily understand the process and status of mechanical tooling or printed circuit board design, but the same did not apply when it came to software – there was clearly a disconnect between software engineering and management.

Selecting a Software Platform

Tough decisions about which software platforms to support, and which ones to ‘kill’, were made slowly. Nokia tried to support multiple software platforms, variants and releases (Series 30, 40, 60, 90, Maemo, MeeGo) which meant ineffective and inefficient use of valuable resources, as well as fomenting internal rivalries. Supporting multiple platforms put tremendous pressures on other parts of the company as well, not just the software community. Product Management, Services, Software Procurement, After-Sales Service … all these functions were stretched by the diversity of software options in Nokia’s products. One could even argue that in Symbian, Nokia made the wrong choice of platform for smartphone development as it was optimised neither for real-time nor touch, requiring a huge effort to correct and leaving Nokia far behind the competition. Symbian, was clunky, complex and not consumer or developer friendly.

By the late 2010’s, with Android joining Apple in the market, the two main smartphone software platforms were Unix/Linux based, although they used different application programming languages. Fuelled by the explosive growth of applications in both Android and Apple ecosystems, development tools quickly emerged that enabled application developers to port their software from one platform to the other. Symbian was not in that club, but perhaps MeeGo could have been? The MeeGo joint development with Intel promised a new platform which could gain wider developer acceptance and enable Nokia to refresh its smartphone UI, but after only one product launch, MeeGo was dropped in 2011 when the deal with Microsoft was announced.  In the end, for a variety of reasons, Nokia chose Windows Phone. After two years of making Windows Phone products, Nokia had 90% of market share for the platform, but only 10% for the overall smartphone market (by volume, Andoid now has 75% and Apple 15%). Since then, market share has dropped.

Connecting to Users

Despite all of the resources allocated to customer research, market analysis, business intelligence and consumers, Nokia was late to spot the key trends in the developing smartphone market, most notably, touch UI and mobile applications. Even if they were aware of such trends, the company failed to energise itself in those directions until competitors had led the way. Some key figures within Nokia even thought that touch was a novelty feature not to be taken seriously. The lack of a coherent strategy for software and services, coupled with an overloaded requirements management system not fully integrated with holistic product management, caused a disconnection between consumer needs and delivery teams. Nokia became a follower, not a leader.

Creating an Ecosystem

Nokia struggled to create a viable Symbian ecosystem and monetise it in the way that Apple had done with the iPhone and iTunes. Most available Symbian applications were operator or business oriented, rather than consumer focused. Later releases of Symbian were not backwards compatible with earlier versions, so existing applications required extra effort from developers to port them to the new release. This caused a fragmented ecosystem that was confusing for developers and users alike. With over 1.2 million applications in both Google’s Play store and Apple’s iStore today vs. 300,000 in Microsoft’s Windows Phone store, the gap continues to widen. Symbian application development support tools were poor and often delivered late, giving developers little time to finalise their applications before the new release was in the market. The acquisition of Trolltech and the introduction of Qt on the Symbian platform didn’t drive application development as hoped. For these reasons, the developer community did not thrive and grow, leaving the door open for Apple and Google. Symbian also did not attract many licensees, the key ones who actually brought Symbian-based smartphones to market were Fujitsu, Mitsubishi, Motorola, Sharp and Sony-Ericsson – but in all cases the sales volumes were low and Symbian was eventually dropped. Nokia was left standing alone.

Nokia’s naivety in the software business also affected its software procurement function. Software procurement was split between different parts of the organisation with unclear responsibility and accountability. For example, there were two procurement functions responsible for software: direct and indirect. In the early days the responsibilities were clear, but as software technology developed to be functioning both online and on the device the waters were muddied. Like so many corporate behemoths before them, the Finnish phone giant grew dangerously intoxicated on its success during the late 1990s and early 2000s. Having ridden so high for so long, it is perhaps no surprise that a degree of complacency and arrogance crept in. This led to Nokia believing that it had little to gain by adopting software from outside.

Building a Service Offering

Nokia’s online service strategy faired equally badly. Software services were run by a separate business unit within Nokia with a lack of coordination to smartphone software, creating a fragmented, uncompetitive and non-viable ecosystem. Nokia tried to compete in maps and navigation, music, online apps store, photo library, games, messaging, mobile wallet and several other online services through both acquisitions and internal developments. The responsibility for procurement of consumer services was split between product management, developer support, marketing and the sourcing function. Once again the need to manage the needs of these different entities caused an increased delay in decision making and thus allowed faster moving competitors to close the gap. Nokia’s software mode of operation and organisational structure also posed problems as there were many very large software teams distributed across the organisation often disconnected from the customer and end-user due to a software ‘factory’ mode of operation. The Ovi sub-brand was created in 2007 for Nokia’s services, but failed to create a coherent offering and by 2011 was just a media and apps store. Nokia was aiming for global domination, but in the end, only maps and navigation remained viable.

Where did it all go wrong?

Nokia entered the new millennium as a mobile communications giant and pretty much created the smartphone category for the mass market. In 2005, Nokia had over 50% market share in smartphones and from 2005-2011 tried to develop an ecosystem and services that could rival Apple and Google, but it failed to …

  • Appreciate the importance of software to the smartphone business
  • Understand the key technology changes and consumer trends
  • Select a software platform that would support services and applications reliably and attract other smartphone licensees
  • Develop viable business models that included online services and mobile applications
  • Build a software development process that was integrated with holistic product management
  • Foster a developer community and apps ecosystem
  • Seek out the best expertise or partners to help expand into the software business

All of the issues listed above relate to software in one way or the other, and it is for this reason that the software cut was the deepest. Nokia failed to properly understand, manage and develop their software business. Software killed Nokia.

By Donal O’Connell, Bruce Godfrey, Nick Filler
This article was first published in November 2014 as a White Paper by Waves Associates Ltd.

 

Author: 3 years ago

In the 2014, volume 3 edition of the “Journal of Intellectual Property Law and Management” an article is published by IPEG’s managing partner, Severin de Wit, called “Challenges in Public and Private Domains will shape the Future of Intellectual Property“. The Journal is published by the National Taipei University of Technology (“NTUT”),  a national university located in Taipei City, Taiwan. The Journal is run by the Institute of Intellectual Property, an educational organization of the NTUT.

Summary:

Market failures, troubled access to medicine, impediments to free flow of information, copyright over-extension, digital right protection, overkill and patents stifling rather than stimulating innovation are just a few of the disparaging themes around intellectual property. The main drives behind changes in IPR systems are growing discontent with the right to exclude that is essential to most IPR systems, the diversity of IP policies between the West and the Developing countries as well as digitalization of information. The future of IPR will be shaped by its users more so than by international IP legislative initiatives. This article explores the main drives behind a growing critical view on intellectual property and how the law can change so as to restore confidence in the workings of intellectual property systems.

The NTUT article can be found here.

For other publications by Severin de Wit, see Selected Works

Author: 4 years ago