When standards become business models: reinterpreting “failure” in the standardization paradigm

Abstract

Purpose

This paper aims to explore the question: “What is the relationship between standards and business models?” and illustrate the conceptual linkage with reference to developments in the mobile communications industry.

Design/methodology/approach

A succinct overview of literature on standardization, business models and platform markets in the paper leads to a hypothesis on the relationship between present‐day standardization processes and business model design. This is then explored by means of three short case studies.

Findings

The case studies of Mobile‐ICT illustrate that regardless of institutional orientation or process, the most important standardization strategy for equipment and service providers is to create platforms that are open to the development of complementary products and services while at the same time preserving the proprietary edge necessary to ensure lock‐in effects. All three cases yielded strong reasons to doubt whether many of the traditional advantages of standardization (interoperability, economies of scale, positive externalities, etc.) will be achieved equitably for all of the stakeholders.

Originality/value

This is an exploratory paper that aims to shed light on present‐day concerns about “failure” in the standardisation paradigm.

Citation

Hawkins, R. and Ballon, P. (2007), "When standards become business models: reinterpreting “failure” in the standardization paradigm", info, Vol. 9 No. 5, pp. 20-30. https://doi.org/10.1108/14636690710816426