In their classic work on the role of modularity in the design of
complex systems, Baldwin and Clark identify three benefits derived
from modularization. First of all, modularity makes complexity manageable.
They allow designers to work in parallel on different parts of the
system. Finally, modularity accommodates uncertainty. Computer
industry has shown modular development over the years. This has
allowed firms to specialize in particular areas or stacks, while
depending on other firms to supply other parts of the total system.
The reward awaiting participants in the modular design is
compatibility and interoperability. This reward is ensured by the
presence of design rules that govern the architecture, interfaces and
tests of the system.
This brings us to Google. First of all, Google has created a separate
identity for search. Given that there is lot of uncertainty around
what comprises search and how it should be delivered, Google, the
design architect, has created a separate industry module. Within
search, Google has defined the components, the interfaces and the
test to determine conformity. By becoming the de facto platform,
Google has creates the design rules for the search platform. As a
result, Google has created a lot of value within the industry.
However, all the design rules and interfaces are open for all to
view. Given this, how does Google appropriate value?
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