Smart business people know the difference between short and longterm investments. They understand what needs to be spent to meet orincrease this quarter's revenue and profit targets, and they balancewhat they spend so they get growth in future quarters and futureyears. For example, if you are a commercial software developer andyou are starting work on a product that will be available startingtwelve months from now, you know that it won't give you revenue nextmonth. You hope that it will be a product that will be of great valueto many customers and really increase your revenues. You will havemoney and people tied up in the product development for some time asan expense, but the plan is for future revenue to offset this andmore.
When you put money in the bank or stock or bonds, you lose theability to spend the money but you hope for bigger payoff eventually.This is well understood.
If I look around the industry, I don't always see people makingthis kind of investment in standards. Not only is there a lack ofinvestment some places, but there is the wrong investment in otherplaces. As in the stock market, sometimes this is simply betting onthe wrong things despite good advice to the contrary. Other times itis simply throwing good money after bad: putting more money intosomething that you think will probably not succeed. Yet anotheroccurrence is putting too much money into something that willunder-perform, thereby missing the opportunity to do betterelsewhere. If you trust the wrong people to manage your investments,you'll also not get the returns you expect.
Companies need sound investment strategies for standards. Theyneed to put the right people, the right number of people, and theright money behind developing good standards and then actually doingsomething with them. If you invest in a stock and then don't sell atits peak price, you lose. If you invest in standards development andthen don't employ them well in the products you build or the servicesyou provide, you lose again. If your next door neighbor invests inthe market better than you do, he or she will be moving to the biggerhouse down the street. If your industry competitor invests better andsmarter in standards development and then executes well ondeployment, they will eat your marketshare. So not matter how wellyou do this quarter, you will suffer in the long run.
Horizontal standards like web services are well understood andhave received a lot of industry investment. I think companies andcountries who are not investing now in how they will deploy ODF, theOpenDocument Format, will lose big in the future (just my advice). Asin the stock market, there are always those who will hawkalternatives or options that have been around for a long time. Pastsuccess is no guarantee of future success. The same is true in thestandards world.
What are the standards areas that are hot right now and can leadto big gains in the future? Two areas: vertical industries andemerging markets. A lot of people are investing in various ways inthese areas and a lot of the investments are problematic. Some arenot investing enough, some are investing too much and then executingbadly, and some just don't see the big picture.
Standards solve problems, standards lead to innovation, standardscan drive growth, standards can drive competition and offer greatervalue to customers. Invest sufficiently and wisely or you will paythe price. You heard it here first (ok, maybe not, but I just wantedto say that).[Read More]