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Standards: Open for business

If you pay attention to high-technology business markets, you have undoubtedly noticed the frequent usage of "open standards" as not only a product strategy, but also as a marketing message and political mantra.

"He's different and he don't care who knows it.
Somethin' about him
Not the same.
He's different and that's how it goes.
And he's not gonna play your gosh darn game"
--Randy Newman, I'm Different

If you pay attention to high-technology business markets, you have undoubtedly noticed the frequent usage of "open standards" as not only a product strategy, but also as a marketing message and political mantra. Leading high-tech executives such as Andy Grove, John Chambers, Jim Barksdale, Larry Ellison, and Scott McNealy all wax poetic about their "support for" and "adherence to" open standards.

Of course, they are not the only supporters. Executives of small start-ups, magazine columnists, industry analysts, and even customers such as CIOs and MIS managers express their "loyalty to" and fundamental "belief in" open standards. With all this support, adherence, loyalty, and belief, you might think that discussing open standards would be a short-lived exercise--kind of like discussing the force of gravity or a human's need for oxygen.

We all know that this is not the case. While everyone voices support for "openness," time and again we see executives and analysts quibbling over the true definition of open and whether this company or that company is really adhering to the standard. If we all agree that standards are a good thing, why is there so much dissent? When I hear executives announce support for open standards, I am left with an innate empty feeling. It's not that I don't trust these people; it's just that I believe supporting openness as a fundamental philosophy runs directly counter to the basic objective of most businesses: differentiation.

How do you differentiate your product if your core mission is to ensure that your product operates exactly as your competition? The bottom line is that you don't, and this paradox is behind most of the confusion and rhetoric regarding open standards.

With this as a backdrop, I would now like to walk through what I see as seven fundamental principles of open standards. It is not my objective to halt all future arguments and discussions related to the topic (although a reduction in attention would certainly be welcomed). I do, however, hope to open people's eyes to the realities that surround these standards, such that we can move past this current "religious war" environment where nothing is ever settled. Moreover, I hope to highlight the motivation behind certain corporate initiatives, not so that we can criticize a company's behavior, but rather so that we can empathize with their natural search for survival and success.

Principle 1: Open standards are a good thing.

Make no mistake about it, open standards have a huge positive influence on technology markets. First, they speed market evolution. Since there is a high need for interoperability, guaranteeing that every printer works with every PC seriously reduces the R&D tasks for both the printer company and the PC maker. This allows both companies to get products to market faster, and reduces costs. With standard, or open, interfaces, the design requirements for a printer or PC are greatly reduced. The customer also benefits through greater flexibility. If you buy a printer from one vendor, and then upgrade your PC, it is nice to know ahead of time that you won't also need to buy a new printer. This flexibility also helps protect the customer from becoming overly reliant on a single brand. If you buy a cellular phone from one network service provider, you can feel safe that the phone will work on its competitor's network, such that you are not "locked in" to a single solution.

Principle 2: Openness is a product-specific interoperability strategy. It is important to recognize open standards for what they are. Companies choose to support open standards on a product-by-product basis. When it makes sense for a company to embrace openness they will; when it does not, they won't. This may sound trite, but many people try to position openness as a religion, business strategy, or corporate mission. This is going too far. It would be virtually impossible for a company to adhere to a policy of openness in everything it does. Would you consult a standards committee every time you made a corporate decision? Would you post the design plans for your next significant product on the Internet for all to see, including your competitors? Do you invite outsiders to your internal meetings to ensure compliance? Sure, Sony lost a great deal of money when the proprietary Betamax failed to gain market share against the open VHS. However, other companies have grabbed significant share and market capitalization by achieving success with proprietary design. Sometimes it makes sense, and sometimes it doesn't. Intel supports open standards on high-speed xDSL technology but works diligently to patent-protect its microprocessor spin-out. Is Intel open?

Principle 3: The "open" buzzword is overused. Undoubtedly, many high-tech executives are guilty of abusing the "open" term, either to position their company or to discredit their competition. We need to recognize that openness is really a position along a continuum and not an absolute way of life. We can choose to be completely open, or completely proprietary, but there is a huge gray area in between. You likely have heard the phrase, "We will support open standards, but innovate on top of them." Is this open? It's hard to say. The fact of the matter is that open is nondefinitive, and therefore its use serves more to confuse than to clarify. I think executives should be limited to stating support for specific standards, and should be dissuaded from stating that a product or product category is inherently "open" in and of itself. "This product supports standard PCMCIA interfaces" is a more sincere statement than "this product is open."