Standards Battles And Pie Sizes
By Mike Masnick, Tue Mar 15 21:00:00 GMT 2005

Wherever there's a standard these days, there's also a standards battle. These battles almost always revolve around questions concerning control. It's about time companies realized the benefit in having a standard is in making it as open as possible, not in locking it down.

It's getting increasingly difficult to name a wireless standards process that isn't beset with tremendous arguments over what technology goes into the standard, and then how the standard is implemented. From UWB to RFID to WiMAX to FLASH-OFDM to ZigBee and onwards -- there are stories about tremendous fights in creating and implementing the standard.

Sometimes the issue concerns patents. A company that holds certain patents wants to make sure its technology gets into the standard, so it can set up a tollbooth and collect money on every implementation. Sometimes it's about legacy or incumbent systems. An incumbent technology or service provider doesn't like the idea of having too much competition to an existing offering, and prefers to kill off a standards process. However, quite often, it's about controlling the customer.

While everyone admits that the whole reason for having a standard is to get the entire market on the same page, that's also the biggest problem. If everyone's on the same page, how can a company differentiate itself? Too often, that thinking leads to limits on the standard or the end-user, rather than recognizing the differentiation comes in continuous innovation. What it comes down to, though, is little picture thinking vs. big picture thinking. A perfect example is the current situation with Bluetooth -- which is just now reaching a modest level of success, years and years after it should have been much more widely accepted.

The little picture thinker worries that a really open standard means a customer can easily go elsewhere. Therefore, he takes the standard and tweaks it a bit -- to build lock-in. However, what he's locking in is a smaller market. The big picture thinker, recognizes that a truly open standard means more of everything. There may be more competition, but prices are cheaper, customers are more plentiful, and the openness of the standard leads to greater innovation, creating more value for everyone. The pie is much bigger.

With Bluetooth, this manifests itself in incompatibility and complexity. Bluetooth still isn't that easy to use -- and even when it can be used, it doesn't always work as it should. Too many companies are afraid that Bluetooth, if implemented fully, would make it too easy for customers to go elsewhere -- so they end up crippling it. All that really does is make the offering much less useful -- which does the opposite of the intended effect. Instead of locking in users to the existing provider, it just makes them more interested in moving to a provider who gives them what they want.

With all of these other standards battles and efforts over walled gardens and locking in users -- it's important to remember that for every bit of control, the pie shrinks. Locking in users to a smaller pie isn't a long term strategy. It's long term suicide. Competition is helped by open standards which increase the pie size and making the overall solution more valuable. This "locks in" users by continually giving them new innovations and the products that they want -- rather than the products that force them into doing things only one way.