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Software Industry Equals Open Standards
Trond Arne Undheim, PhD
Director Standards Strategy and Policy EMEA
EU-China Project on the Protection of Intellectual Property Rights (IPR2)
London, 5 December 2008.

Who are we to talk?
• 3,000+ products
• 2,000+ patents
• $3B in development expenditures this year
• 20,000+ developers
• 6,500 product support specialists
• 300,000+ test scripts nightly
• 6,500 customer-driven enhancements yearly
• 30,000+ servers
• 15,000 Partners
• 300+ customer advisory boards

Why – of all companies –
does Oracle advocate open
standards?

Diversified Enterprise Portfolio Across Industries
Applications Technology
Enterprise Enterprise
Manufacturing Performance
Industries Management
Retail Identity
Management
Comms Content
Management
Middleware
Banking Management
Insurance Database
Utilities
Systems
Management
Others

Leader In Key Markets
• Database • CRM
• Data Warehousing • Human Capital Mgmt
• Database on Linux • Retail
• Embedded Database • Communications
• Middleware • Financial Services
• Enterprise Portal • Banking
• Application Server • Public Sector
• Enterprise Performance • Professional Services
Management

“ENOUGH!”

Let’s do the math
Interoperability
=
Open standards

Let’s do the math
Open standards
+
Wide implementation
=
Good Business

<Insert Picture Here>
Nelly Kroes
DG COMPETITION
“Opting for open standards
is a very wise business
decision indeed”

The Benefits of Open Standards
Innovate Better products New technology
Transparency Avoid lock-in Market stability
Market access Economic growth Reduce costs
Source: The Momentum of Open Standards - a Pragmatic Approach to Software Interoperability
The European Journal of ePractice, No.5, 2008 [http://www.epracticejournal.eu/document/5156]

To which certain industry players may ask
• Who
• What
• Why
• Where
• When?

Open Standards Enhance Innovation
• Who?
– UC Berkeley economist Hal Varian in Information Rules.
– European Commission funded FLOSSIMPACT study.
– UC Berkeley sociologist Neil Fliegstein in Architecture of M.
• What?
– Innovation is whatever action an organization values highly.
• Why?
– Enables sustainable innovation on top of agreed platform.
• Where?
– In every well-functioning market – supported by institutions.
• When?
– Whenever standards create new business (PDF, ODF, XML).
– The Internet itself is the best example (HTTP, TCP/IP).

Open Standards Avoid Lock-in
• Who?
– Repeated attempts at platform monopoly.
– All other software players work against this practice.
• What?
– Collaborative interfaces between technologies.
• Why?
– Unsustainable in the long run. Hurts markets. Unfair.
• Where?
– Developed in 500+ consortia – W3C and Oasis.
• When?
– Whenever competing standards are avoided.

Open Standards Reduce Costs
• Who?
– Industry analysts like AMR, Forrester, Gartner, & IDC agree.
– 1/3 of an average IT budget is spent on integration.
• What?
– Standards drastically reduce integration costs.
• Why?
– Business standards are unorganized. Too many, too
complex.
• Where?
– Our acquisition of BEA systems – integrate, don’t shut down.
– Oracle Fusion Middleware – connecting technology pieces.
• When?
– Whenever businesses must collaborate. All business should.

“WAIT!”

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Trond Arne Undheim, Ph.D.
Oracle Corporation UK Ltd.
“In the software business,
creating, consolidating and
promoting open standards is
the best way to ensure
interoperability“

The European Standards Policy Environment
• Benchmarking • IMCO-committee
• Best practice • ITRE-committee
• Legislative initiative
European European
Commission Parliament
EU
• 27 Member States • Decision making
• EU27+ • Regulations
Member States The Council
• Influence in Asia and • Directives
Latin-America • Decisions

THE

FUTURE

OF

BUSINESS

IS

OPEN

STANDARDS

Why Open Standards are important
• Enabling innovation (TCP/IP).
• Avoiding lock-in (ODF).
• Reducing costs (interoperable technology).

<Insert Picture Here>
Vint Cerf
Father of the Internet
“The Internet is
fundamentally based on
the existence of open, non-
proprietary standards.”

Disruption v. Collaboration

Contemporary Challenges
• Business
• Social web
• Cloud computing
• Semantic web

Contemporary Challenges
• Business
– Core Components Technical Specification (CCTS)
(UN/CEFACT)
• Cloud computing
– Few standards efforts so far
• Social web
– Open Social (OpenSocial Foundation)
• Semantic web

Characteristics of Open Standards
The controversial EIF 1.0 (2004) definition:
2. “Adopted and maintained via an open process in
which all interested parties can participate,
3. Published and available freely or at a nominal
charge,
4. For which the intellectual property – i.e. patents
covering (parts of) the standard – is made
irrevocably available on a royalty free basis,
5. There are no constraints on the re-use of the
standard”.
Source: European Interoperability Framework, European Commission IDABC Programme.

The Openness Continuum
W3C OASIS ISO Open Social Single-vendor
ODF Flash OOXML DocX

The Broken Way
Oracle SMEs
Single vendor lock-in
Chinese
government EU

The Better Way
Oracle SMEs
Open Standards
Chinese
government EU

The Path Towards Openness
Adobe (PDF) PDF/A ISO (PDF) Implementations (PDF)
imgres

European Standardization
• Legal base
– Council Decision 87/95 (ICT standardisation in public sector).
– Directive 98/34 (formally recognised standards organisations).
• European standards organizations (ESOs)
– CENELEC (1959) – Electro-technical standards.
– CEN (1961) – European pre-standards and standards in ICT.
– ETSI (1988) – Telecom standards.

The Ideal Software Standards Ecosystem
• Healthy • Certainty
process • Late disclosure as
• Non-RF as the Royalty free Disclosed ex ante the exception
exception
Open
Global
• Wide implementation
• Actual interoperability

Transparent Patent Licensing
• Prevent IPR obstacles in software industry.
– Prefer ex ante policy, so we can know the terms early.
– If disclosure is not made, we favor default royalty free.
– RAND is too vague, gives patent holders ex post leverage.
• Less burdensome rules for standards participation.
– Standards participants are not lawyers.
– All users should have de facto access.
• Ensure interoperability by open standards.

Conditions On The Ground
• Standards edging higher on government agendas
– Interoperability Frameworks in many EU Member States.
• Denmark and The Netherlands leading the way.
– EU considers standards reform
• Has 20 year old regulatory framework.
• Cannot reference fora/consortia standards in legislation.
• Some actors resist change
– European Standards Organizations (CEN/CENELEC)
– National Standards Organizations (DIN, AFNOR, BSI)
– Still selling standards. Need a new business model.

Conclusion
• Open standards are market-led activities
– Governments must reference fora/consortia standards.
– We must all help to simplify the standards environment.
– We must try to prevent IPR obstacles by transparency.
• In software, ex ante disclosure is important. If not in
place, default royalty free can ensure interoperability.
• Open standards must be widely implemented – usage
means efficiency, effectiveness – for all actors.

THE FUTURE OF
BUSINESS IS
OPEN STANDARDS
See Trond’s Opening Standard
http://blogs.oracle.com/trond