PGP CTO Blog

Ode to an Open Standard

By Derek Atkins
derek@ihtfp.com

28 Jun 2004
As they say, those who do not study history are doomed to repeat it. Similarly, those who do not use open standards are doomed to repeat them...poorly.

Open standards are descriptions of processes and protocols published in an open forum where anyone can obtain and read the publications. Indeed, anyone could build a compliant system based solely on the published standard document. Instead of fearing this process, however, smart companies have embraced it.

One might think that providing competitors access to your bread and butter protocols would ruin your company. History has shown this is just not the case. For an example of why open standards are a good thing, just look at the Beta versus VHS battles in the 1980s. Although Beta is arguably the better technology, Sony failed to open its solution to other competitors. So the majority of companies started creating VHS-compatible units, thereby overwhelming the Beta users.

The same issues are valid in computer and Internet standards. It's a rare company that has the power to create a protocol, keep that protocol to itself, and gain complete market penetration. Even Microsoft has not accomplished that objective; there are alternatives to Word that can successfully interoperate.

The open standards process enables companies to encourage the community as a whole to embrace a particular company's technology. Using this process, a company gains name recognition (by naming the protocol) and has a jump-start on the implementation. Open standards also increase demand for implementations: the higher the demand, the more units can be sold.

If everything is the same and works fine with everything else, what causes consumers to purchase one vendor's product over another? The answer is differentiation. Even though product A and product B both solve the same problem and can work just fine together, consumers need to chose which product to buy. Generally, they will choose the product with the better (easier-to-use?) interface, greater reliability, improved integration, and lower cost of deployment. These differentiators are what decide sales.

Contrary to popular belief, even the best product will not sell itself. Only when a product works in conjunction with others to gain a dominant market share of the platform will that product sell. Therefore, the best approach to generating larger sales is to stand behind a standard platform and supply the best implementation of that platform to the end users. Embracing open standards increases the potential size of the market and, in the end, will only improve sales.

In conclusion, it's in your best interest to embrace open standards and sell your product based on differentiators. You'll increase the market share for users of your protocol and by being first, gain a foothold to being the best. By naming the protocol, you'll gain increased name recognition. In the long run, you'll in a better position to sell your products to more potential customers in an environment where consumers know who you are. Only then will the best product win.