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Now Cloud Computing vendors are increasingly embracing “openness” in their products and platforms. The adoption is a result of demand for openness among the users and any vendor who try to lock-in users’ data inside a proprietary enclosure faces the real danger of losing out in the competitive marketplace. Openness has moved from being a moral issue to a strategic issue. However, it also poses an unique dilemma to the Cloud Computing vendors.

Unlike in the traditional Open Source world where it is possible to develop a software without incurring any expenses (except for the time spent by the volunteer developers), Cloud based products incur heavy expenses in the form of computing resources. For example, if a Cloud vendor opens up their service using an Open Protocol, they pay heavily for the computing resources when third party developers access their service using these Open Protocols. The vendor subscribing to openness is now faced with an unique dilemma of minimizing expenditure while playing to the spirit of openness. Twitter is a very good example of a vendor struggling to find a way to effectively monetize the access to their service.

This dilemma is not unique to startups alone. Even giants like Google are susceptible to it, especially during a recession like the one we are facing right now. Sometime back, Google started offering SMS text messaging from inside of Google chat. Since Google has committed to Open Communications for Google Talk service, third party developers could take advantage of the Open Protocol and offer their own apps/services. One such company is Innerfence and they developed an app called InfiniteSMS for iPhones taking advantage of Google’s Open Protocol. There are few other developers who built apps/services on top of this protocol. Now, Google has decided to shut down access through their Open Protocol, probably, because they are in a cost cutting mode due bad economic conditions.

This brings into focus some questions related to the idea of embracing openness. Does it make sense to implement Open Protocols if the vendor is anyhow going to shut down access through these protocols? If shutting down is not an option, what is the optimal way to monetize such access? If vendors are going to shut down access suddenly, we won’t be seeing an ecosystem around platforms like Google or Twitter. It is important for them to have a clear strategy from the beginning so that companies that build their apps/services on others’ platforms are not left in a lurch. It is time for companies to get their priorities straight. Embracing Open Protocols blindly, without a proper strategy, doesn’t help anyone. Feel free to add your thoughts on this topic in the comments section below.