Standards and Profits

Standards and Profits

I have been on panels, and in interviews with analysts and press over the last few weeks and the subject of standards (and pseudo standards) has come up repeatedly. The software industry is obsessed with standards and the politics of creating them. Perhaps CS departments should offer a specialization in standards!

The confusion comes from the fact , people assume companies are creating standards for altruistic reasons. This is not to say that many individuals are not working very hard to create a better world through the standard bodies and I applaud their efforts.

Companies are out to make a profit and produce returns for their investors. The standards process is just a way to maximize this return. A good rule of thumb is the more effort a company puts into a standard the higher the return they expect and hence the more skeptical we should be of it. It is totally appropriate for us to question our own and others motives for creating and supporting standards. "The market demands standards" is a true statement, customers like standards but the actual standard they get may not be optimized for customers, it may be optimized to generate more revenue for the vendor.

Standards are great and we need them to make the development process easier, allows products to interoperate and be more secure, but lets be pragmatic and look at individual standards to see who benefits the most.