Standards Future

"Good evening," said the fellow in the suit and tie, "I'm Gudfa Business, and this is my counter-partner Gudfa Himself. We are here to give you a view into where the industry may go, based on your decisions about standards today." He was accompanied by a dude with a Mohawk hair-cut, a variety of rings piercing his body, with a holster, 6-guns and roller blades.

"Like figure the future, dude," said GH, "It's do your own thing time! You're 60's you can dig it. Every dog for himself. You want Disney, you got Disney, just tune into ABC's satellites, connected with ABC's dish, ABC's set-top box, which also plays games you can get at any Disney store, and bundled into the low monthly fee you get Internet Connections, not just any Internet, but DisneyNet, using DisneyWeb and your hopes for finding Porn on the network are History, got it, History."

"Now maybe you want Universal Studios stuff instead. For that, you order up Cable One Hundred, not just from any Cable company, but from DoubleTrouble Cable, the folks that own the Twin Cities. With their set-top, you also get Internet, well, they call it DoubleNet, and access to millions of Web sites that provide a modest kick back to the DoubleDippers Fund. Since the Twins are going to be in the Series in '04, I suggest you get a hookup, that's the only way to see the game."

"Now for something a bit more fun, try GameNet; yep, that box over there, the 14th one down on the TV set. The connection to that is from one of my long distance carriers, who is also supplying interactive games, and virtual reality. If you haven't tried Virtual Sex you haven't lived! You can't get that one on prime time TV. Actually, you can't get anything on prime time TV anymore, all of the content is tied to specific suppliers who own end to end delivery systems and collect monthly fees for access. The "annuity" model they call it. It may look like an ugly stack of settop devices to you, but behind each of those boxes is a company just raking in the dough, well some of them, but hey, if you can't take the heat, you shouldn't be in the kitchen. The real money is in the implicit and explicit advertising, as well as the associated shopping channels. As we say, 'when you've got them in your mall, their hearts and minds will follow.'"

"What about my laptop?" asked a concerned Scrooge, who was always looking out for his investments.

"Dead meat", replied GH, "Went out the windows with the death of Microsoft. I can see that surprises you, I didn't say Gates, I said Microsoft. Gates just about lost it there as the private channels with content discovered that they didn't need anything he had to offer. Sure he had the Louvre, but folks just didn't want to see those kinds of pictures. When he bought out WonkaVision for peanuts, that's what kept Bill in the game. It was dumb of that Wonka fellow to leave the patents to an elephant, and even dumber for the lawyers to let Bill near the beast, but that's the way it was. WonkaVision delivers real products over the network, ok, over BillsNet, which used to be called WebTV, box 18 over there. Now if you think Virtual Sex is interesting, try item #42092 from BillsNet! What I don't understand is how she can charge every time, like I thought I had purchased something, but boy you got to read that small print."

"Gotcha," said a quiet whisper from somewhere else.

"Hold on," said Scrooge (yet again), "I don't believe this stuff. How can an industry that is rapidly moving towards a single dominant model of operation, a "franchise" as we like to call it, be blown to pieces?"

"Well, it's all a question of size and power," responded GB, "If the I.T. industry were the only show in town, convergence on a single platform might have gone on forever. It didn't help when some hackers took out all the clone systems connected to the net in '02. That's the problem with clones, they all go together when they go, and boy did they go. I.T. folks never get this straight, its the applications, stupid. And that is not just a computer program. Folks don't put bumper-stickers on their car 'born to word process', that's not reality. The real content folks, and the real communications folks teamed up to make things that made sense, and having only one path for delivery was cutting them out of the pie. So they re-cut the pie, these folks aren't dumb, and they weren't born yesterday, they know what side their bread is buttered on, and also what side of their congressperson needs buttering. Its amazing how fast the justice department can move an antitrust suit forward when there is some will behind it. Microsoft was divided into little pieces, sold off to the highest bidders, Bill made a bundle on the deal."

"What's amazing is that everyone started right back down the same track, incompatible systems that were distinguished by content access, not internal functionality. Differential, but no standards."

"What happened to the I.T. industry standards forums?"

"Nobody home, by the time the I.T. industry figured out that it needed to drive though a new suite of standards for the common platform interfaces, enable a diversity of microprocessors on one side and applications on the other side to all play together, it was too late. The purchasing swing had moved onto consumer electronics houses, with content as king."

It starts to dawn on Scrooge that he is looking at his own future. "Tell me, what happens to my company?"

"Oh, you probably don't really want to know;" responded GB.

"But you should," responded GH, "You were right at the lead, took the fall on the anti-trust suit from a neat deal cut in a consortium that your lawyers thought was fairly clean. Spent a little time in the clink with your business chums, and ended up with stock in Avatark when you got out, not a bad investment. Did a lot better than the IBM folks who were merged into, and then downsized out of General Congopoly, most of them are working retail. In fact, video-tele-selling GC's products."

"Is there no alternative future," despaired Scrooge?

"Lots," responded GB, "But they didn't suit Marley's objectives. The only real question is what type of standards do you want? The Lennys gave you your choices, this scenario assumes you get caught between Lenny #2 and Lenny #3, while focusing strictly on the bottom line. Sound business model until you look up and see where you're going, and more importantly where other players in the converging world are going. Here are the two questions you need to ask your self.

  • Are there any areas where real standards can significantly increase the market?
  • Where can you go to get those standards done efficiently?"
"Sure, there is work that can have an impact: work on security, electronic commerce, privacy, guidelines for web pages. But where to go? There are lots of choices, consortia, national standards bodies, international standards bodies, trans-national groups, coffee-klatches. Which is efficient? How would I know, we have so many, I've got folks in most of them, Where's that Grace woman, she said if we gave her a few million...."

A raven crowed out to great the rising sun, and Scrooge rolled out of bed. He felt oddly refreshed in spite of an odd hostelry and the night visitors. Being a quick learner, Scrooge discovered which of the 5 shower controls set the water temperature between freezing and scalding with minimal injury. Once dressed, he found a door to the elevator where he was presented with two buttons:

Maximize quarterly profit margin.

Maximize long term revenue.

Scrooge did not like this choice. How could he explain it to the analysts, to his board? He had just instituted a new compensation program for his management team, referred to as the "revenue or resume plan", and this did not fit in well. It was quite plausible that he was not in a zero-sum game, and that collaboration with competitors could grow the market to much larger proportions, where smaller margins would easily be offset by larger revenues; but how could he engage his competitors even if it was to their benefit? Scrooge gazed at the buttons for a very long time.


The "Business Value" page provides a bit of a 2020 (year) update on this tale.  While the Twins didn't do the '04 series (the Red Sox won?... if I had said that no-one would have believed this story.) ... We now are watching the emergence of a batch of content specific networks -- Hulu, Netflix, CBS plus, NBC's Peacock, Apple TV, Amazon Prime, even PBS Passport ... and more.  While they don't have their own set-top boxes (yet), it can't be ruled out. With 5G delivery, one can imagine this method for controlling piracy, and perhaps in 2020 more important is the implicit and explicit advertising revenue alluded to in the 1997 story.  And don't mention China.  Actually, go to the Business Value page for more on that.