Compatible IT products means the winner won’t take it all

New research has found that competition among digital products is moving away from business environments distinguished by “standards wars” between similar but incompatible technologies.

The study, published in Communications of the ACM (Association for Computing Machinery), found that firms are able to increase total market share by offering compatible formats, cross-licensing, and avoiding standards wars.

Basic economic theory, the authors write, has traditionally predicted that markets for ICT will tip toward a single dominant standard, with competing technologies falling away. However, many technologies with multiple formats are now succeeding alongside one other, largely due to brands offering compatible products.

“The digital medium allows you to make conversions easily, yielding near-perfect copies,” University of Pittsburgh professor of information systems Chris F. Kemerer says. “Converters are the game-changer.”

Read more at University of Pittsburgh