How Facebook stands to gain by sharing its trade secrets
Internet companies seem to enjoy turning the world upside down by sharing software and operational details. Of course, it's still done out of self-interest.
Remember the days when a company would tightly guard its operations lest competitors gain an advantage by divining its trade secrets?
Secrecy is alive and well, of course, but there are striking examples where the opposite practice makes sense. Exhibit A: Facebook's detailed disclosure Monday about how it runs its data centers, powers its Web site, and develops its mobile apps.
A 71-page report (PDF) goes into great detail about the company's approach -- everything from removing the plastic bezels from the fronts of its "vanity-free" servers to rejecting mobile app modifications that increase power consumption to embracing Google's WebP image format. Mobile chipmaker Qualcomm and telecommunications equipment maker Ericsson also contributed to the report, but not with nearly as many juicy tidbits as the top-ranked social network.
The companies published the report as part of a multi-company effort called Internet.org to . The effort comes with a philanthropic tone involving economic empowerment and human rights, but of course Facebook has plenty to gain from helping to open up huge new markets so it can spread beyond the 1.15 billion users it had in June.
There's another reason besides opening up new markets that Facebook might want to share such a wealth of detail: making its own life easier.
Today, it's notable that giants like Facebook and Google design so much of their own technology. They don't build their own processors, but they use their own hardware designs running their own software in their own data centers. Money is one big reason for doing so: Facebook said its first data center, opened in Prineville, Ore., in April 2011, was 38 percent more energy efficient and 24 percent lower cost to operate than the previous leaded facilities.
But operating at this scale and building all your own gear isn't easy. If Facebook can get more companies thinking like it does, they'll buy the same sorts of gear Facebook does. The less exotic its gear, the lower its costs. Facebook is an immense customer, enough to steer product decisions at companies like Intel and AMD, but having even more customers would help more.
Facebook's move has a parallel, open-source software, that also derives from the the size of the technology industry and the sharing the Internet enables. Plenty of companies support open-source software efforts that are important for what they do, but not fundamentally something they make money doing.
For example, open-source software such as Hadoop for large-scale data processing at Yahoo and Facebook might compete directly with the products a data-mining company sells, but Yahoo and Facebook are willing to fund lots of work that's given away freely. When others adopt and improve it, the software gets better.
There are innumerable open-source efforts that compete directly with others' proprietary software -- file systems, virtualization software, databases, compilers, and of course. Large-scale Internet companies like open-source in part because they don't have to pay for its use, as long as they're willing to take responsibility for it.
Thus, Facebook gives away technology that doesn't make money directly. In this case, though, instead of open-source software, it's data center design tips like how to save money by using a mister to increase air-cooling effectiveness.
Facebook surely doesn't make decisions lightly about what to share publicly, and it keeps plenty of its own software and technology under wraps. And sharing operational details doesn't magically erase Facebook's huge lead over any rival trying to carve into its social-networking turf. Moreover, most companies can't come close to operating at Facebook's scale.
Thus, Facebook need not fear that it's giving away the keys to the kingdom. Despite that, however, it's fascinating that a company can see competitive advantage in giving away some of its secrets.