1. Standards As An International Competitive Alternative October 25, 2004

2. Sources of Communications and Technology Standards Pre-design discussions to ensure consistent implementation of shared technology (rare) Formal decisions by an official standards group (ISO model--tends to be very slow) Parallel open implementation and voluntary consensus around standards in practice –Internet model Proprietary solution comes to dominate and becomes de facto standard (vendor model)

3. International Standards Organizations ISO (International Standards Organization) is the core standards organization - www.iso.ch –each nation has a member body –in the US it is ANSI (American National Standards Institute) - www.ansi.org –use of the standards is written into law and guides governmental buying as well as technical and product development in many industries

4. A Multi- Layered Group of Participants

5. Typical Standards Layers National and International BodiesIndustry AssociationsConsortiums, Forums, Alliances Standards Companies, Corporations Specifications

6. What Factors Drive Standards Adoption Need for buy-in by critical mass of technology providers, vendors, and customers for new innovation or solution Perception and reality of need for standard to drive global marketplace and meet interoperability requirements Recognition of wide marketplace acceptance of a de facto standard Genuine spirit of cooperation

7. What Undermines International Standards Competitiveness and desire for “ownership” of the marketplace Rapid pace of technical breakthroughs and adoption cycles –Length of time required to discuss and come to consensus around any consistent approach or solution is considerable Deliberate blocking by key stakeholders to protect financial or competitive interests in other solutions Availability of several comparable and competing technologies in different countries with no need for global interoperability or consensus about which standard will win

8. Benefits of International Standards Provides interoperability between product generations and geographic locations Opens the field to more providers and typically expands the international market and accelerates adoption by customers –Building products around a standard is useful for smaller companies because it reassures customers that the product won’t be orphaned Accelerates technical advances –More developers are motivated to adopt and develop for a standards-based platform

9. So Why Not Just Standardize Everything? Biggest advantage goes to companies that can develop and patent and protect certain technologies or solutions –Can sometimes still get their solutions adopted as standards and license to all comers Typically there are strong vested interests and investments in a variety of existing proprietary technology –Most companies have an agenda in the standards forum Interest in protecting domestic markets or national distinctiveness often dominates desire to attract global base (at least for large countries and rapid growth markets)

10. Comparing Standard and Patent Strategies