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Standards: A high-stakes game

Money and politics are playing a bigger role in the standards-setting process

November 22, 2004 12:00 PM ET

Computerworld - More than ever, businesses rely on IT products and services built around standards. But that demand, and the evolution of the industry, is changing how standards are created -- and who creates them. The old image of a group of engineers working together to find the best technology to solve a problem is giving way to new realities.
As the market for IT products and services has grown, the stakes for vendors and users have increased. An emerging technology such as ultrawideband (UWB) may open up a market worth $1 billion or more. With so much at stake, participation in standards groups has swelled, and vendors have pushed harder to have their technologies adopted as standard. That has made it difficult to reach consensus in some cases and created deadlock in others. And increasingly, vendors are trying to generate revenue by licensing intellectual property rights on the technologies they advocate as standards, rather than donating them for the common good.
"You now have compromises that are not just mathematical compromises or technical compromises but have major marketing compromises behind them," says Jim Carlo, president of the IEEE Standards Association.
Meanwhile, the evolution of more sophisticated systems has increased costs and worked against interoperability. At MasterCard International Inc., the challenge lies in getting industry-standard equipment to interoperate when inserted into complex systems such as its storage-area network (SAN).
"There are issues as you drill down into the management and interoperability of complex environments," says Jim Hull, vice president of engineering services at the Purchase, N.Y.-based financial services company. "You need to ask vendors whether they interoperate and at what level."

Jim Hull of MasterCard International
Jim Hull of MasterCard International
But some changes are also paying dividends for business users. "What's better is the testing and verification. The companies are taking it upon themselves to ensure that their products work as advertised and are expanding their test labs and their testing," says Hull.
Successful industry standards are issued by authoritative organizations and are widely accepted by the market. "A standard is an indication that you are buying a technology that has proved itself," says Alan Bryden, secretary general of the International Standards Organization (ISO). And while standards in and of themselves don't ensure interoperability, they are a necessary precondition.
Opportunity Beckons
To Hull, a successful standard is one that lets him find a second source and receive competitive pricing for storage networking equipment that will plug and play with his SAN. "Because I approach it from a standards perspective, my interoperability issues go way down," he says.
For vendors, standardization results in the opportunity of a

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