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3 - The economic realities of open standards: black, white, and many shades of gray

Published online by Cambridge University Press:  22 September 2009

By
Joel West
Edited by
Shane Greenstein  and
Victor Stango
Joel West
Affiliation:
Associate Professor of Technology Management Department of Organization & Management College of Business San José State University
Shane Greenstein
Affiliation:
Kellogg School of Management, Northwestern University
Victor Stango
Affiliation:
Tuck School of Business, Dartmouth College
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Summary

Abstract

Open standards have long been popular among buyers of goods and services in the information technology sector. Self-interested buyers and sellers, however, have had incentives to overstate (or understate) the openness of various standards. This paper rejects the simplified view that there is a single model of an open standard, as well as the assumption that a fully open solution is always an optimal (or even a feasible) outcome. The author analyzes various economic and technological forces that make standards more or less open and how these economic forces are affected by the policy choices available to firms, standard setting organizations, and regulators. The author uses this analysis to suggest objective measures for standards openness and a typology of common bundles of standards rights; he also notes the practical limits to open standards.

Open standards: ideals vs. reality

The concept of “open systems” has become an icon to conveniently express all that is good about computing. It … has always been held up as the ideal to which computing should subscribe.

(Cargill 1994, 3)

As Cargill indicates, “open” for compatibility standards has been promoted as a universally good thing – right up there with motherhood and apple pie. For many corporate and individual users of information technologies, open standards are the ne plus ultra for external technologies.

Type
Chapter
Information
Standards and Public Policy , pp. 87 - 122
Publisher: Cambridge University Press
Print publication year: 2006

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