Every chapter of Living Networks is being released on this blog as a free download, together with commentary and updated perspectives since its original publication in 2002.
How Standards and Integration Are Driving Business Strategy
OVERVIEW: Standards are the foundation of communication, and of all networks. Building on the existing foundation of powerful standards and connectivity, there are three sets of emerging technologies that are driving the next stage of the networks: XML and web services; peer-to-peer; and network interfaces. In the connected economy, standards and network strategy are at the heart of all business.
Chapter 2 of Living Networks – Commentary and updated perspectives
It would seem likely that a chapter written in 2002 about emerging technologies would date very quickly. However the emphasis of this chapter was on standards and integration, which have absolutely been at the foundation of technological change over the last five years, and continue to be firmly at the center of what dominates technology today.
The (very) gradual shift to open, accepted standards (see below in the text for explanation)
I selected three sets of emerging technologies to focus on in this chapter: XML and web services, Peer-to-peer networks, and Network interfaces.
There has been less talk about peer-to-peer networks today than five years ago, but the concept underlies how the Internet is evolving. The five domains for peer-to-peer domains I described remain totally relevant: Distributed content, Distributed computation, Collaboration, Distributed processes, and Markets. My definition of Web 2.0 is “distributed technologies, built to integrate, that collectively transform mass participation into valuable emergent outcomes.” The value of what the Internet has become today is that it is almost fully decentralized. Technologies are distributed, with single applications rarely trying to do everything required on their own. They are built to integrate, to draw on other applications, and often to be available to other applications, forming a peer-level network of data and applications.
What I called ‘the interfaces that merge people and technology’ are still fundamental to our future. I have more recently spoken and being interviewed about the current state of our interfaces with technology and the potential they hold. Despite the rise of voice recognition and video glasses, we are far from transcending clunky keyboards, and the true merging of humans and machines is yet to happen.
When we launched Living Networks, the idea that most captured the imagination of the media was ‘proximity dating’, leading to interviews on national breakfast television and substantial newspaper coverage. While I have been interviewed many times about mobile social networks over the last five years, their prime time is yet to come. However the next year or two is likely to see broad adoption, as social networks transcend computers and shift to mobile devices.
The final section of the chapter is on Standards and Network Strategy. While business strategists now often implicitly understand these concepts, standards strategy is rarely fully thought through by major organizations.
The diagram at the beginning of this post illustrates the shift to open, accepted standards. In the chapter I wrote:
Since the trend to open, accepted standards is clear, it is far better to go with it rather than fight it. Long-term success must be based on aligning yourself with these shifts. Over time, the greatest rewards will go to those who provide effective leadership towards standards, while implementing clear
strategies on how they are positioned and create value within the unfolding landscape.
The shifts in attitude of Microsoft, IBM, Google, and others demonstrate that this position is now pretty well accepted. Strategy needs to unfold within this playing space.
The examples I used in my four action steps for developing network strategies included Flash, the Amex Blue card, instant messaging interoperability, Bluetooth, FXall and the Xbox. There are any number of new case studies that could be used, with HD and HD disk standards among the most visible. I think a useful addition to the literature over the last years has been The Slow Pace of Fast Change by Chakravorti, which examines how game theory can be applied to standards strategy, however the fundamentals transcend any specific technology or epoch.