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  Business Case for Open Standards

Business Case for Open Standards

By Erik Sliman

Created April 30, 2002
Updated May 9, 2002


Executive Summary

Open standards begin when a collaboration of interested parties results in a consensus on specifications for implementing common requirements. They permit open access for anyone desiring to utilize the results in a way that enables conformity across implementations. While open standards describe openness in both the standards setting process as well as access to the specifications, industry de facto and government-led standardization alternatives are less open. The choice to use open standards over the alternatives can improve one's ability to realize common objectives.


You can optimize your options through the use of open standards, improving the choices that help you to reduce risk, implement durable solutions, obtain flexibility and benefit from quality. Since multiple vendors can support open standards, you can spread the risk out among them instead of on one proprietary vendor, reducing overall risk related to dependency on and support for the technology. This also leads to increased durability of options, as open standards are able to last longer than limited vendor solutions. Vendors come, and vendors go, but open standards, transcending them all, remain durable. With vendors competing to implement and help you use open standards, your vendor options are more flexible. In a market where accessibility to open standards are high, this leads to higher quality and lower pricing, key differentiators in an environment where conformity to open standards sets the foundation.


The more we use and deploy open standards, the greater our vendor independence. Open standards decrease the cost of changing vendors by decreasing the costly components of change, resulting in improved and increased vendor options.


Interoperability results when components are able to work together to complete a process. Open standards, by helping to define component interfaces, increases interoperability. This leads to simpler, repeatable and quicker integration efforts.


By helping those involved in using open standards to use common terminology, communication is improved when organizing, planning and implementing open standards based technology.


Open standards help to consolidate competing standards, increasing the aggregate pool of resources available for using them without the cost inefficiencies of a single vendor de facto. For suppliers, this helps to consolidate a larger customer base. Instead of picking the portion of customers using the proprietary standards you are equipped to support, you can instead offer products and services to a larger consolidated base of users. For users, this pools vendors together, increasing competition and price pressures, yielding better quantity and quality of vendor options. This also results in consolidated pools of people skills. Instead of looking for specialists in the proprietary standard you use, you can choose among a larger base of consolidated specialists empowered to support multiple vendors using the same open standard.


By reducing costs, speeding time-to-market, and increasing market adoption and acceptance, products and services developed around open standards benefit from a higher Return on Investment (ROI). They benefit from lower barriers to market entry created through decreased customer risk with vendor selection as the association of support and durability with the individual vendor is transferred instead to the pool of vendors supporting open standards.


Obtaining the advantages of open standards begins by declaring it a high priority, considering it in all your options, including it in your planning, and improving your processes to use open standards. Initial steps you can take to lead your organization include opening dialog, increasing participation in open standards processes and raising awareness.

Open Standards Introduction

Open Standards is the concept of people working together openly to collaboratively develop solutions for addressing common requirements and goals.? Often they work together in committees through open standards organizations, such as the Internet Engineering Task Force (IETF) or the World Wide Web Consortium (W3C).?


Open standards permit everyone to utilize the resulting specification to build infrastructure and various solutions.? This creates the opportunity for unlimited vendors competing on the quality of their implementations and their ability to meet the diverse needs of the end-users in the markets utilizing the open standards.?


For standards requiring communication or interconnectivity, an open standard can help to ensure that the various implementations by the users can interoperate and integrate.? By using the Internet's TCP/IP communications protocol, for example, virtually any component on a network can talk to any other component, creating an infrastructure for collaborating and coordinating resources across the globe.?


To be sure, open standards are not the only means of obtaining standardization.? Whereas open standards exhibit openness in the collaborative efforts to create the standards, and access to the resulting specs and technology necessary to implement those specs, there are other types of standards such as industry de facto and government.?


Industry de facto standards often require the adoption of proprietary technology and may require the payment of licensing to a sole or few providers of that technology.?? People often use them because they are popular, increasing the user's ability to interoperate and collaborate others.? Where the benefits of standardization are high, de facto standards can be very difficult for competitors to unseat; yet, in the absence of open standards, continue to abound.?


Government standards can be set through several means, including direct dictates in the form of laws, or mandates via regulatory bodies carrying the force of law.? Sometimes, government agencies may also lead efforts for voluntary compliance, and may even partner with private, public and commercial parties.? While open standards do not necessarily preclude government participation, nor do they require it, and should not be limited by it.?


Open standards bodies can include participation from government and industry.? Ideally, they are free to operate with the independence necessary to serve the principles and objectives set forth in their own charters.? Differentiating an ideal open standards body from similar constructs is the ability to permit participation while inhibiting dominance inherent in political, financial or market power.? Its goal is to balance the interests in order to support objectives while adhering to principles.?


For decision makers in charge of guiding and influencers able to impact an organization's technical direction, possibly by choosing vendors, products or technologies, it can quickly become challenging to sort out the options.? One needs not only to assess the degree of reliance on proprietary versus open standards each choice can bring, but the impact the decision will have on the organization.?


As one begins to take hold of the dynamics of these decisions, and how open standards can play a role, options can become more clear and simple, and commitments more resolute.? Increasing the transparency and understanding of open standards can not only help one realize better decisions, but can help obtain the reassurance that comes from discerning how open standards create improvements.?

Optimize Options

Optimizing options is about giving you more and better choices for accomplishing your goals.? Choices that help you to reduce risk, obtain durable solutions, acquire flexibility and benefit from quality optimize your path to success.? If open standards increase access to these options, then they are an empowering means to help you achieve a better end.?

Reduced Risk

Open Standards increase options that lower risk.? When selecting a proprietary solution, you are often putting your chips in one basket.? You risk that the vendor will be around for awhile, that they will choose to continue to support the technology you implemented, they will improve their product and their improvements will match the growth in your needs.? You also risk interoperability issues.? Will your suppliers, customer, partners and other related entities integrate well?


Open standards can reduce this risk in many areas.? Since, by definition, more than one supplier supports them, you spread your chips out among those implementing the standards.? This can increase the probability of long-term availability of support and continuous improvements, and can even open doors to those improvements being more applicable due to the increased representation of interests inherent with open standards.? With broad support and increased vendors behind it, it is easier to achieve interoperability needed to integrate your internal systems with each other, your suppliers, customers and partners.?


Open standards, such as the Structured Query Language (SQL), have proven to have higher durability over time than proprietary solutions.? Whereas individual vendors of proprietary solutions have an incentive to alter and phase out support for older technologies to solicit investment in upgrades even if costly upgrades are not the ideal growth strategy for your organization, open standards have demonstrated their resilience to this pressure.? Open standards last longer as they can be more reflective of the demands of the users, and are not subject to a single vendor's interests.?


SQL is an example of an open standard demonstrating durability in a competitive market place.? Since SQL is used throughout the relational database industry by vendors such as Oracle, Microsoft and IBM, no single vendor has enough control to force you to replace it.? You can choose to continue to use SQL until something has proven to meet your requirements better.?


Open standards can continue to improve until you require something new. Since open standards can achieve a high user base through universal adoption, the drive is there to continue improvement so long as it is required.? Of course, if an open standard is ready to be replaced, then a new open standard can be created, opening the door to collaboration on migration and interoperability.?


The increased vendors available due open agreement on open standards gives you more flexible options.? In considering supplier options, one size usually does not fit all.? For a proven standard, there may be larger vendors available for those who require global support and higher reliability, while, for the same standard, there may be more localized vendors able to provide you with the implementation you need at a more appealing price, and possibly a more personalized service conducive to your growth needs.?


If multiple vendors implement a standard, this can decrease the cost of switching vendors compared to leaving or moving to a vendor of a proprietary solution.? Proprietary solutions are often incompatible with competing solutions, and can also require a high learning curve for the support specialists to make the switch.? Open standards can reduce the impact of change to your systems, your support staff, and other business assets.?


For example, using SQL can decrease the impact of switching from one relational database vendor to another.? However, producing code using proprietary super sets of SQL (e.g., Oracle's PL/SQL or Microsoft's Transact SQL) increases the cost of replacement.? Using n-tier architecture, business logic can be coded outside the database avoiding dependency on these supersets and, consequently, their vendors.? A simple decision about where to place logic can optimize options by decreasing the cost of replacing relational database vendors.? Due diligence leading to a better understanding of open standards can go a long way towards improving the effectiveness and efficiency of your IT infrastructure, operations and dependent solutions.


Open standards can also provide increased flexibility to your internal systems.? You can leverage interoperability options through open interfaces, giving you options you may not have considered otherwise.? Open source implementing open standards can also offer flexibility by competing with your vendors.?


Coupled with durability, your flexibility is greater with open standards over the long haul, as technological progress tends to isolate proprietary solutions over time.? This was clear on the Internet when some early commercial Internet Service Providers (ISP) tried to implement proprietary connectivity to the Internet.? The early CompuServe and Prodigy networks are a memory today, while the Internet as a whole continues to grow.?


Quality is the degree to which a product or service meets your requirements.? One way to measure quality is to measure defects, where a defect is anything other than complete satisfaction of your requirements.? Less defects translates to higher quality.? 100% free from defects would mean that your requirements were wholly met 100% of the time.


Increased competition increases quality.? Since the cost of switching vendors is decreased, they have a higher incentive to improve the metrics that impact your decisions, and quality is usually one of those metrics.?


Increased vendor competition also increases capacity to meet your requirements.? This capacity can be demonstrated in increased performance, scalability, features, security, or other means.? Since this increase can increase the ability to meet your requirements, you have higher quality selections available to you.?


Open standards are subject to the highest degree of peer review since the specs are available to everyone to view and scrutinize.? With open participation in the standard setting process, open standards also enjoy early peer review.? Widespread and early peer review increases early identification and resolution of potential problems, leading to higher quality results than closed proprietary solutions where the public may not be able to adequately determine quality.?


CASE STUDY: Public peer review of open standards solutions has helped to increase the adoption of Public Key Infrastructure (PKI) solutions based on X.509 standards set by the IETF.? The acceptance of solutions for security business assets requires trust.? In areas of great complexity where it is infeasible for each prospective user to understand all the issues, yet the protection of valuable assets is at stake, open public peer review can offer reassurance where proprietary options might fall short.? The reassurance results from the perception that increased and early peer review can result in higher quality.?

Improve Vendor Independence

One does not need to be in IT long to witness the reality and impact vendor dependence can have.? Many IT decisions have been made due in part to the potential costs of switching vendors, which, much of the time, is ruled infeasible.?


De facto industry standards encourage this dependence, reducing choice and competition.? If your customer requires that you transmit an artifact in a proprietary format, the cost to you of not supporting the proprietary solution could translate to lost revenue and profit.? Of course, it may not be your customer's fault.? They may be under the same pressure.? A de facto standard can be hard to break out of because it is like trying to solve the chicken and egg problem, only without a chicken or an egg.? Unless we all change to an alternate solution together, our ability to free our selves from vendor dependence can prove elusive.?


Of course, not all vendor dependence is this strong or driven by customer requirements.? Sometimes, it is simply too costly to switch vendors due to proprietary technology.? You might, for instance, have a significant portion of your business code written in a proprietary language that is part of a vendor's product.? Switching vendors may require a costly ?rip-and-replace? rewrite.? Also, after the switch, the value of employee knowledge and expertise in that language you no longer use will drop, often requiring retraining or replacement of employees.?


CASE STUDY:? Although there are plenty of vendors in the relational database market, many have created their own procedural language for creating complex application logic in the database server.? During the client/server era, where the only other alternative was putting all the application logic in the client, a lot of code was written in Oracle's PL/SQL, Microsoft's Transact SQL and other proprietary languages of vendor databases.? Although the n-tier architecture has decreased the reliance on these stored procedures by creating tiers between the front-end client and back-end database where logic can reside, in the absence of vendor independence objectives, the practice continues.? This means the cost of replacing one of one database vendor with another may include the cost of rewriting the server-side logic of the applications.?


Open standards help to reduce vendor dependence.? With increasing agreement by vendors on issues involving your business assets, the cost of switching vendors while preserving your business assets is reduced, leading to increased vendor-independence and lower barriers to choice.?

Increase Vendor Choice

In a market driven by open standards, the quantity and diversity of vendors and their ability to address your requirements can be substantial.? The quantity can grow to address decreasing barriers to entry since the ability to implement the standards is available to all.? The diversity is a result of vendors creating solutions to match the variety of requirements in a market subject to high competitiveness.?


CASE STUDY: Internet Service Providers (ISP) utilizing open standards to deliver their services are an example of high quantity and diversity of vendor choice.


Part of what enables this is the decreased cost of switching vendors.? Your ability to easily pick another vendor lowers the barriers to entry for the suppliers, as your current vendor is no longer as strong of a barrier to your competitors.?


As you replace proprietary dependency with open standards in potential solutions, risk is transferred from the owner of the single vendor technology to all the vendors supporting the open standards.? Since this offers a more durable option, your overall risk is decreased.? Additionally, a solution that can be more widely supported lowers the barriers to entry for other potential suppliers, giving them more cause to construct offerings crafted to satisfy your requirements.?


The combination of your greater accessibility to alternate vendors with the increased ability for them to be able to provide you with open solutions results in an increase in choice, as you are now able to select from a larger pool of supplier options.?

Decrease Vendor Cost

The decreased cost of changing vendors and savings obtained from an increasingly competitive supplier market results in decreased vendor cost through open standards.? The increased competitiveness as open standards lowers barriers to entry in your supplier market also increases efficiencies resulting in lower overall costs throughout your vendor's market.?

Optimize Interoperability

Interoperability is achieved when components are able to function together to share in the fulfillment of a process.? The components that interoperate can be of varying degrees of granularity from components within a single system that work together to create the processes within the system to components between systems tying customer, supplier, vendor, and other external processes into your business.?


In between systems you may also have middleware, which can have its own components with varying degrees of interoperability.?


Increasing interoperability increases your ability to connect and automate processes that transcend technologies, platforms, languages and customizations.?


Open standards and open architectures are continually improving to reduce the barriers to integration of disparate systems.?


CASE STUDY:? Web services, a set of protocols based on open standards, are the most recent example of ways to increase interoperability options while decreasing costs of integration.? As these standards gained quick acceptance, it became clear that platforms that were previously too economically infeasible to even consider integrating now offer unprecedented synergy.?


Clearly, there are solutions that don't need every interoperability option.? Yet, increasing those options gives you more ability to optimize your use of integration.? Open standards can increase interoperability you need to produce synergy.?

Simpler Integration

Two people talking the same language is simple.? Talking through a translator is not as simple.? Writing a letter, having it translated, sending it, and waiting for a reply is not simple.?


The latter example demonstrates some of the techniques used to integrate systems without open standards.? The ability to collect information from one system, transform it into a format another system can understand, then find a way to get the new data correctly inserted into the new system can be a challenge.? One thing is clear, if the two systems could talk directly to each other, then the work would be simpler.?


Open standards have become a means of creating common ways all our systems can talk to each other.? Integration tools were quickly revamped to exploit the benefits of recent open standards such as SOAP, while system development platforms have likewise quickly added capability to use open standard protocols to include integration features to new and current systems.?

Quicker Integration

The concept using of ?plug and play? to integrate devices and computer components was born out of the demand for simple and quick integration.? Yet, a look at how it is implemented reveals that it is simply a standardization of integration specifications, automating the satisfaction of repeatable requirements.?


Open standards in interoperability issues helps to foster processes for quicker integration of components having standardized interfaces and increased automation of common requirements.?

Encourage Repeatable Processes

Open standards are creating common ways of integrating systems, replacing many unique vendor solutions.? This is helping to foster repeatable integration processes for enterprises, and increasing repeatability throughout dependent industries.?


Open standards increase the availability of resources sharing the same processes.? For example, you have five specialists, each using tools that deploy different proprietary technology for achieving the goals, and methodologies developed around each solution, then one of the specialists is not a direct substitute for the other.?


Now, if all five specialists use the same fundamental technology based on widely adopted open standards, then your ability to substitute one for the other is greater, increasing your pool of available specialists for a given solution one to five.? Specialists, likewise, are able to take advantage of learning efficiencies, as five schools of thought become one.?


Substitution increases the pool of knowledge matching your requirements and the ability of knowledge workers to find a need for their skills.? This benefits the technology efforts as a whole by creating the opportunity to increase repeatability.?

Increase Available Resources

Just as using open standards based technology can increase the number of vendors able to address your needs, there are other resources that can increase, as specialization becomes more commonly focused around open standards.?


CASE STUDY: The Unified Model Language (UML) is an example of an open standard accomplishing this.? By integrating three differing de facto object-oriented modeling standards into one open standard, modelers increased their ability to substitute each other, benefiting providers of modeling skills as well as consumers.? Even though there are many vendors of UML tools, repeatable methods of using UML have arisen permitting enterprises to select the UML tool that best balances their capacity requirements with cost, while choosing a repeatable process using UML transcending vendor implementations.?


Not only does this increase the UML vendors to choose from in contrast to selecting one of the three primary modeling languages in the early 90s, it also combines the labor pool for the OOAD modeling category.? Whereas before you searched for specialists that supported the standard you selected to avoid learning and conflict costs, you can now simply look for someone who knows UML.?


The available labor pool for a project that has already selected specific a vendor's UML tool is increased by virtue of the increased substitutability of human resources that have experience with UML with other vendors.? Although there are differences in UML based toolsets, largely categorized around the bells and whistles not directly relating to UML itself, the use of UML decreases the learning curve from moving from one vendor tool to another in contrast to a change to a tool that uses a different modeling language, increasing substitutability of resources and repeatability of processes.?


Open standards can increase the quantity of all resource pools supplying knowledge or technology utilizing the specification by consolidating resources.?

Optimize Communication

Besides automated communication improvements yielding improved interoperability, open standards simplifies and streamlines communication between people.?


By encouraging open dialog and participation from the outset, open standards encourage communications that leads to consensus.? The unified objective mindset of the contributors to the open standards process encourages adoption of common terminology used in the discussions before the specifications or processes are themselves concluded.


The common terms flow outside standards setting processes, advancing throughout industry and public discussions.? As the technology and standards are adopted, communication is increasingly streamlined, permitting educational and corporate institutions to apply the concepts and terminology.? Implementers and users of the standards can communicate more efficiently by using terminology predefined and visible to everyone interested.?


The streamlining of communications derived from common open dialog ensures higher productivity from users of open standards in contrast to operating with closed concepts.?

Increase Return on Investment (ROI)

Return on Investment (ROI) is the return an investment yields over a period of time, a financial metric for helping to determine and contrast the potential value of investments.? The higher the return you achieve with your investment, the greater the positive impact it can have on your bottom line.?


There are basically three ways to increase ROI.? The most obvious is to decrease cost.? Another is to increase benefits, or return.? Lastly, since the development of information systems cannot begin to yield a return until they are deployed in production, you can increase ROI by shortening the time it takes to enter production, speeding time-to-market.? This increases ROI by indirectly increasing return for the same period of time.? This may also yield competitive advantages increasing long-term return.?


You can decrease costs through the use of open standards, thereby increasing ROI.? Open standards can increase your vendor options, resulting in lower vendor costs.? Consolidation in other resources, such as training costs, can also decrease overall costs.?


As you demand quicker time-to-market, increased competition between vendors in an open standards market increases pressure to produce and pass on improvements and efficiencies.? Increased use of open standards increases the ability to share improvements across the industry, yielding improvements for all users.?


By helping to decrease cost and speed time-to-market through improved competition among suppliers and consolidation in other available resources, using open standards can help to increase ROI.

Increase Acceptance of Products and Services

Building products and services using open standards improves market acceptance, since part of what you are offering, the implementation of open standards, has already been accepted.?


Increasing market acceptance by virtue of the choice to use open standards can decrease your barriers to market entry and growth.? In markets where highly proprietary solutions dominate, customers often choose larger vendors to reduce risk, often creating a market where a few are dominant, and barriers to entry are high.? Open standards lowers these barriers, opening markets to you as customers consider you an alternative to their current suppliers.?


Customer risk is lowered independent of the vendor chosen as risk is transferred from a single vendor to multiple vendors implementing the same open standards.? The decrease and transfer of risk increases the ability of the customer to consider more vendors.? This increases your accessibility to new customers as your products and services enjoy increased acceptance through the utilization of open standards.


Increasing the acceptance of the products and services through the adoption of open standards also means you will be competing for a faster growing market.? The increase in growth can create a business case turning even the most traditional proprietary players into advocates for open standards.? The ISP and website hosting markets are prime examples.?


For the consumption of products and services and the creation of internal solutions, using open standards can decrease your costs, speed time-to-market, expand available options and resources, improve communications, reduce risk and create more durable solutions.? Using open standards in the products and services you produce and internal applications directed towards such efforts offers these same benefits plus increased adoption and market acceptance of solutions and lower market barriers through decreased customer risk.? It also allows you to participate in faster growing markets.?


Obtaining these advantages begins with the decision to declare open standards among your highest priorities.? Decide to evaluate open standard options in all your considerations.? Address it in your planning.? Begin to build the process of understanding, contrasting and developing conclusions of how open standards can improve your decisions and impact your business.?


Raising awareness, increasing participation and supporting dialog of open standards are all steps you can take to help your organization leverage the benefits of open standards.? If you open discussions on open standards, you might be surprised when the dialog lends itself to articulating the business case for open standards.?


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