| In the 1980s, computing technology started to become more stratified with much more distinct horizontal structures. Vendors had very proprietary architectures, and it was extremely difficult to interface data and communications with other computer systems. This led to greater degrees of modularization and interoperability, and the development of a marketplace for peripherals. The net effect was an increase in the rate of innovation, greater value for customers, and a certain degree of loss of account control by hardware vendors. The software side of the equation also saw horizontal stratification. Operating systems started to become much more generic and independent of hardware platforms. The middleware layer evolved, allowing for greater cost-effectiveness and greater innovation at the client layer, since application vendors were freed from having to worry about the inner workings. These developments started to force standardization, which became vital in the effort to exploit networking technology and the growing use of the Internet. The potential for computers to communicate with each other and for great stores of information to be virtualized was predicated on simple and standardized communications. Therefore, while it may have been possible for a business to be an IBM, HP, or DEC shop in the past, it had become impossible for any one company to control the interfaces that ran the world's networks. During the 1990s, a number of major companies made strategic decisions to embrace this evolution toward open standards. These decisions were based on simple pragmatism: If we are going to live forevermore in a networked world, then that networked world must run on open standards. This development has been good news for customers of IT and the IT industry in general. The skill and resources of these industry players have been critical in the development of robust, functional, and highly practical interfaces, which are critical enablers of e-business. The battle for "openness" is still being waged. For the most part, businesses are beginning to embrace open standards as a means of ensuring degrees of flexibility and vendor independence. Many vendors have also embraced open standards, because their role in the ecosystem as either provider of horizontal infrastructure or networking capability necessitates it. It is also their desire to participate in markets dominated by other players who use their market position to promote their proprietary interfaces. Some vendors have been successful in exploiting what economists call the "network effect"—the tendency toward adoption of a common platform owing to the intersecting interests and interdependencies of ecosystem participants, including consumers. In turn, these companies have been able to exert control over programming interfaces and document formats to protect their market positions. |
