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Overhyping the emerging markets. Does closed beat open?

Thomas W. Hazlett, a professor of law and economics at George Mason University, discussed open and closed information systems in an insightful article for the Financial Times. He argued that even though we are all busy hyping user generated content, it is the closed information systems that are just as valuable if not more.

He drew attention to the $$ that companies like Forrester and Gartner charge for their proprietary closed research and also discussed the iPod/iTunes as an example of a closed system. Hazlett even emphasized that electronic games are achieving explosive growth as closed systems.

I am not quite sure if I agree with him. Both Gartner and Forrester give lots of proprietary information away for free and have been forced to publish open blogs just to stay engaged with their readers. Much of the growth in electronic games is now happening because they of the ability to play them online leveraging open Internet standards. And finally, Steve Jobs himself would rather the iPod/iTunes system be open.

User generated content and open systems may not alter every existing economic model but what is certain is that they will at the very least influence these models - both outside and within the enterprise. Your users demand control, give it to them even if they are your employees. Read Nicholas Carr's perspective on this too.

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