Is cognitive radio ready for standardization?
Tuesday, 29 January 2008
What’s the best way for innovators in the communications technology industry to make money? There seem to be two basic approaches. One is to create a proprietary solution and strive for differentiation and customer loyalty. The other is to collaborate with others to create a standard that enables rapid growth and consumer acceptance, often as a result of declining costs through modularization and economies of scale.
Apple’s iPhone is an example of the former. Apple has created a tightly bundled system that gives its customers a complete multimedia experience. IEEE 802.11 (or Wi-Fi) is an example of the later. Wi-Fi has been a huge success, making millions for many, but is now a commodity component of larger systems. Nonetheless, it has enabled a wide variety of higher value services that need network connectivity to perform.
So what about dynamic spectrum access and cognitive radio? Microsoft is developing a white space appliance that presumably will be mostly proprietary. On the other hand, Motorola is investing heavily in a number of cognitive radio standardization activities. Which approach is best? It will be interesting to watch
The answer to this question is fairly complex…
The purpose of a standard is to “commoditize” a technology, essentially making it available to everyone. So, the answer to your question lies in defining who benefits from a standard and how. In existing markets, new standards allow new companies to enter the market, so they gain benefit through market access. For some types of standard, this may allow big companies to outsource to smaller companies, creating a potential win/win. Standards may also create a situation where new companies can compete directly with incumbants, causing the incumbants to loose market share. There are other permutations and combinations that work here, but the basic models are fairly well defined.
In greenfield markets, standards promote a new ecosystem of vendors, potentially allowing the market to build rapidly. The problem with standards in an early market, however, is that the requirements of the market are often not well defined, and so it often isn’t clear what needs to be “standardized”. As a result, a lot of time energy and effort has gone into a number of standards that are seldom, if ever, followed.
The alternative to standards for a greenfield market is the “first to market” model that says that the first to enter a greenfield market will define often the “defacto” standard for that market. So, whether a company invests in a proprietary approach or a standards based approached in this type of early market is often tied to their understanding of the customers requirements, their own core competencies, and the market dynamics, all mapped against a business case analysis that shows they can make more money in the long run following one approach or the other. If the market looks promising, some companies will even invest both models, hedging their bets on their proprietary approach with standards activities. And finally, many companies will participate in a standrads activity, especially in a greenfield market, to get their proprietary IP designed into the standard, allowing them to make money under “fair, reasonable, and non-discriminatory” terms on everybodies implemntation of the standard.
So I suspect the short answer to your question lies in looking at the business case analysis from the various companies.