Standards and Disruptive Technologies

A long story by David Strom at InformationWeek called Five Disruptive Technologies to Watch in 2007 couldn't help but catch my eye on New Years Day.  The reason is that all five technologies, and the strategies of the vendors that are promoting them, rely upon standards – in most cases, fundamentally.  That's no surprise, because disruption by definition is painful, and no one in the supply chain (including end users) likes pain.  Providing a convincing argument why the resulting pleasure will more than offset the pain is therefore imperative.

One type of pain that vendors and end users particularly dislike is the risk inherent in buying into a new technology or service model.  For a vendor, that means investing in lots of R&D, set up and marketing in a new product that may not sell.  For an end user, it means buying into a new product or service that may prove to be poorly supported with (at best) little competition or choice provided, and (at worst) ultimate abandonment and the need to switch again.

One of the best ways to mitigate against this type of risk for both sides of the sales equation is to create standards that everyone agrees to adopt, ensuring that there are many stakeholders that have a vested interest in seeing the disruptive model succeed.  In today's increasingly interoperable and networked world, those standards are in any case often essential for the model to work at all, blunting the competitive urge to try and own the whole opportunity.  The result (only up to a point, of course), is an "all for one and one for all" coordinated promotional campaign that seeks to project the image that the new technology is one that you need and just have to get, whether it be a new architecture being pitched to Fortune 100 companies, or yet another entertainment format being promoted to consumers.

With that as prelude, let’s take a look at the Disruptive Technologies article, and see what Strom had to say.  The article begins as follows:

2007 will be the year when a host of hot technologies which have been percolating around the mainstream rise high on the radar screens of CIOs and IT managers.

For example, radio-frequency identification, frequently viewed as a standalone tagging technology, will begin to ramp up the data loads IT centers must handle, as the tags become more pervasive. Web services, long touted as the next big thing, is poised to begin presenting workaday challenges, as managers are tasked with integrated Web-based apps into the enterprise. Mobile security is a no-brainer as a hot technology for the coming year, as far-flung workforces face newer and more troubling threats. Each of the three technologies referred to are completely reliant on standards.  Indeed, at the design level, each of these products and services is in large part simply the implementation of the underlying standards, with those standards often coming from multiple standards organizations as part of simultaneous (and at times competing) efforts.

 Let’s look very briefly at each one, beginning with RFID which is built upon a suite of standards that address the various components of an RFID system (chips, antennae and readers).  While RFID chips may ultimately be used in everything that moves – including you and me – they are reaching the market first as elements of global inventory tracking systems, using standards created in part by the aptly named EPC Global.  Many standards created by EPC Global and other organizations have already been adopted by ISO.  This level of coordination is also mandated by the fact that RFID systems use radio frequencies that are regulated by the Federal Communications Commission (in the US) and by the FCC’s corollaries in the many other nations throughout the world where RFID-tagged goods will travel.  Significant credibility was given to RFID technology when both Wal-Mart and the US Department of Defense announced that they would be requiring the use of RFID inventory controls in much of their procurement.

Web services are dependent upon an even larger web of standards, dozens of which were created in draft form by the so called “Men In Black” (Microsoft, IBM and BEA), and then submitted to several standards organizations, such as the W3C and OASIS. These standards were then processed through the usual adoption process by technical committees formed for that purpose, and then formally adopted.  As with the decision of Wal-Mart and the DOD to mandate RFID tags, the major commitments made by competitors like the Men In Black, supported on a specification by specification basis by numerous other partners, provided the credibility for Web Services that the marketplace was looking for to persuade the CIOs of major companies that this is a service model technology to be taken seriously.

Mobile security, once again, is a standards-based technology in many of its most important parts – at least if you want to have freedom of choice in setting up your system.  There are many standards organizations developing the standards needed to make mobile networking practical, from the base level of WiFi standards, up through areas such as federated identity, to make mobile as well as fixed computing less tedious.  Organizations active in this area include broadly based organizations, such as the Liberty Alliance and the Open Mobile Alliance, as well as more narrowly focused organizations, like the Mobey Forum,  which focuses on financial transactions.  You can view many, many more standards organizations developing standards for wireless and mobile applications in general here, and for security in particular here.

The other two technologies featured in the article are earlier in both the technology as well as the standards development cycles, making them longer-term bets, as Strom recognizes in his article:

Most challenging may be two technologies that will begin their ascent in 2007, but may take a bit longer to assume a dominant role in the enterprise. Those would be virtualization and advanced graphics. The latter will get a big boost from the advent of Microsoft’s Vista operating system.

I won’t go into these in detail, but you can get a taste of the role that standards will play by checking out this article on 3D Imaging,  and this one on virtualization.

As you can see, the success of many disruptive technologies really does rely heavily on standards, not only at the purely technical level, but at the marketing level as well.  And the lesson is hardly a new one, going back to the advent of railways (with common gauges) and telecommunications (in virtually all respects).  Neither of these commercial revolutions could have attracted the increasingly large amounts of capital investment or commercial and consumer uptake required until network standards were agreed upon.  That level of standardization permitted the purchase of non-proprietary (and therefore increasingly competitively priced) components, and then interoperating but privately owned systems that could be linked together, as well as later industry consolidation.  

In the IT world, where the opportunities to launch disruptive technologies appear with increasing frequency (and challenges), the role of standards in lowering risk shouldn’t be ignored.  Although it’s become a cliché word, standards development is a splendid example of “co-opetition” – an opportunity for competitors to work together to achieve common goals, while preserving the right to compete in all other respects.

Look for more and more recognition of the importance of standards-based co-opetition in the years ahead – and for the success of more disruptive technologies as a result.

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