Saturday, February 3, 2007

Is Standardization Broken?

As I’ve said my research and this blog, open product compatibility standards provide the essential interoperability for the creation and use of most IT products. Of course, openness is a matter of degree: even the most proprietary standard usually has some degree of openness to allow third party use and complementary products such as software applications.

When creating standards for a given technology, firms face four competing imperatives:

  • technical interoperability, the nominal (and usually easiest) goal of a standardization effort;
  • creating value, both through features of the technology, and by encouraging a supply of products that deliver or build upon that technology;
  • capturing value, since if the various producing firms don’t make money there’s not much point in getting involved; and
  • timeliness, because if the standard comes too late (as with 56K modems or 802.11n), firms will go ahead and ship products without a standard.
On Tuesday, Carl Cargill delivered an impassioned plea at the DCCI conference arguing that the standardization regime as we know it will be unable to meet the demands of the 21st century IT industry. (His slides are not yet posted, so for now I’m working off my notes and a private copy of the slides.) A sample quote:
We’re post-industrial society and we have a pre-industrial standards regime … We still have the basic model for ISO as we had in 1945.
Cargill focused on standards consortia, which he described as "where we get together and help each other". Some of his major points:
  • Consortia are increasingly balkanized, with declining participation.
  • Standards are no longer an open effort to encourage interoperability but an attempt to block rivals. [NB: Pam Jones of GrokLaw recently used documents from a Microsoft court case to show how proprietary extensions eliminate interoperability and buyer choice.]
  • Standards are largely ignored by teachers, researchers and consultants.
  • China uses standards as an industrial policy, Europe for social and political goals, but US policy largely ignores them.
While the railroads and Gutenberg had 50 years to get their act together, by Cargill’s estimate, we have only 5 years to fix standardization. If cooperative standardization fails, the alternative is proprietary standards.

Some readers might say Carl who? Cargill did standards at DEC, Netscape and now is Chief Standards Officer of Sun. He’s been the most visible proponent of U.S. IT standardization for more than a decade, having testified before Congress, written various books and articles, funded an online library of standards research, and sponsored a series of provocative industry workshops on standardization issues. We first met at the 1999 edition of SIIT, the main academic conference on IT standards.

From any other source, I might accuse the speaker of having a lack of perspective: after all, cooperative standardization has often been about jockeying for position and digging in your heels if you don’t get what you want. But Carl’s no Pollyanna: he not only lived through the Unix wars, he was a field commander for one side.

If there’s a canary in the coal mine, it’s last year’s IEEE 802.20 mess, where Intel and others aligned with the competing 802.16 (WiMax) standard sought to block a standard backed by Qualcomm. In an unprecedented move, the IEEE suspended the committee and its leaders until it straightened the mess out.

Tim Simcoe noted how firms that try too hard to capture value won’t create any. I’d like to think that this would lead firms to self-correct, but obviously there are cases where such self-regulation has failed. One cause may be that a firm prefers the status quo to a successful standard; as the lawyers like to say, cui bono?

Update February 4 (08:45 a.m.) — Carl’s slides have been posted to the program.

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1 comment:

Jeff said...

It seems to me that open standards would be a good thing - allowing companies to focus on implementation rather than the standard itself.

The problem with closed standards, IMO, is that you always run the risk that people will tire of your standard and move to others. With an open standard, people may move away from your implementation, but as long as they are on the same standard you can easily draw them back. Makes for better competition, all in all.