On the importance of open standards

Nob Hill, San Francisco

There has been much debate recently on the importance of open standards in enabling market adoption of new technologies.

On one side of the argument, proponents of closed systems correctly highlight the fact that standards-based ecosystems are slower to market.  By definition, an open standard is discussed and modified and voted on by a community composed of entities with (at least slightly) different goals.  This leads to both a slower maturation of the technical aspects of the solution as well as a set of compromises which may not be ideal for any given narrow application of the technology.

The counter argument insists that without that process of debate and compromise, the technology will be unable to meet broad market needs, which ultimately leads to market fragmentation and an associated lack of the economies of scale and efficiencies of market competition which are required to achieve the promises of that new technology.

Closed systems protect the producer by removing choice from the consumer, but offset that by offering the consumer a solution more tailored to their specific needs.  Of course this keeps prices naturally higher than an open system and limits the addressable market of the solution.  In the context of modern technology-driven solutions, all systems are a mix of open and closed sub-systems and the interesting question is: within a given solution, which systems should be open and which can be closed in order to most successfully bring the technology to market.  The premise being that the overall market will benefit from the introduction of this technology – through increased productivity, efficiency, etc.

If we look carefully at IoT solutions, we see not a single technology, but a solution stack.  In the most basic deconstruction, this stack is comprised of three layers: Applications, Connectivity and Physical Infrastructure.  In order to achieve maximal scale benefits (price, availability, reliability) the Connectivity layer must provide an open, standards-based interface to both the Applications and the Physical Infrastructure.  Without this, each solution is a vertically integrated solution, at a distinct economic disadvantage to solutions able to leverage shared building blocks.  We can deconstruct the Application and Physical layers and see similar benefits.  No one argues the value leveraging Web standards (HTML, CSS, etc) provides in terms of cross-platform availability and elastic scalability.  Similarly, hardware platforms needing fast time-to-market and competitive pricing, will take advantage of standard building blocks (storage, cpu, connectors) enabled by open standards.  So generally, standards ultimately allow us to build solutions more rapidly, with better pricing structures and better longevity in the market – after we pay the initial “price” of drafting and ratifying it.

Specifically drilling into IoT connectivity solutions, we can see standards in action in all three connectivity domains: Cellular, Local and Low-Power-Wide-Area.  Cellular connectivity is built from GSM and TCP/IP standards (very often augmented with Web standards for RESTful communication).  Local area and personal area solutions are based primarily on IEEE 802.11 (WiFi), IEEE 802.3 (Ethernet), and Bluetooth.  LPWAN connectivity is just now seeing standardization efforts, led by the LoRa-Alliance – and the lack of prior standardization has been the driving reason that wide-spread LPWA solutions are not widespread in the market.

Of course, not all solutions and all markets need the benefits of scale and interoperability that a standards-based approach enables.  For such markets (sometimes delineated by total size or unique technical requirements), proprietary solutions remain the natural route to market and will more slowly (if ever) take advantage of the open-standards approach.

For a classic example of an open-standards based connectivity solution, check out Senet’s Low-Power, Wide-Area public network at www.senetco.com.

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