The Value of Standards

As more and more global players come online and start offering IT products (hardware, software, etc), one obvious effect is more competition. But it also means an opportunity for more specialization.

Right now, however, it seems to me that our industry itself is helping to enflame this issue. How many IT departments do you know that refuse to consider anything but the largest one or two players in a particular segment (be it a database, web server, or whatever)? In effect, we restrict our options because of a mindset. You can reasonably argue that you get better support and a more polished product from the #1 or #2 vendors, but you end up changing your approach based on their tools, as opposed to finding a tool that fits your specific needs. You also typically pay a premium for those products.

There is value in "standards", but how far do you go? Is it really necessary for your company to use exclusively a specific version of a single vendor's web server (as a crude example), when there are perhaps a dozen that all comply with larger, RFC-based standards? Don't laugh--I've seen it at larger companies. In that sense, your company's selection of a particular product is not a true "standard", but only a restriction of choice among products that are all standards compliant. You don't want anarchy and chaos in a datacenter, of course, so I'm not suggesting that it should be a free-for-all either. But I do think we need to strike a balance between the extremes that we don't see today.

What I'm trying to get at is that a larger pool of products and technology can be good for everyone. Companies get exactly what they need, and vendors are able to stay in business. One example might be Apple Computer. They've long been considered to have somewhere under 10% of the computer market, yet they're doing just fine. Some would say they represent a "vertical market" segment. Regardless, you'll never see them in the datacenters of many of these corporations solely because they're not considered the #1 or #2 player in the computing market. If you're a Fortune 500 company, you can refuse to do business with anyone but other Fortune 500 companies, and that's your prerogative. But here's where I see opportunity for smaller, more agile competitors to get an edge. I see the recent X Prize winner as an example of that. Boeing and friends don't seem at all interested in a $10M prize--it's too small for them to notice.

I think the key to the future is compliance with open standards (not to be confused with open source) and a change in mindset. If we can do that, I believe market forces will make it possible for players both domestic (meaning US) and foreign to all share in that market.

As a political observation, the Republican party tends to be friendlier to business (both small and large) than the Democratic party. So it seems to me that the results of this year's elections can have a significant impact on the process above.