The Law of Opposite Numbers: Standards Dynamics and the Global Logic of Software

Philip E Agre, Department of Information Studies , University of California, Los Angeles

1/01/2005
(Original Publish Date: 8/7/1999)

In the first few decades of computing, much software was developed for theuse of a single organization. More recently, however, powerful economies ofscale have encouraged a trend toward packaged applications whose development costs can be distributed across numerous customers. This trend has contributed to the extraordinary importance of standards, not just in the computer industrybut in every industry that uses computers heavily. A well-established bodyof literature has examined the economics of standardization, for examplethe market's tendency to create winners and losers through network effects.Despite the great success of this economic work, it must be admitted thatthe picture that emerges from it is quite dissimilar from the market of AdamSmith. To better understand this picture, I will draw on concepts fromsocial theory to explore the situation of software buyers in a world of standards.The economic literature, not to mention the business press, has pointedto the central role in establishing standards of negotiations among vendors.But customers obviously play an important role as well. The dynamics ofthe global software market are usefully understood in terms of collectivebargaining between vendors and customers to distribute the value that iscreated in society from the establishment of a new standard. I will closeby suggesting strategies for customers to manage the new standards environmentand briefly drawing out consequences for policy.