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Today, Google announced its acquisition of Motorola Mobility for not less than $12.5 billion in cash. And I completely agree with Forbes’ contributor Eric Jackson, who states that

Androids

Saad Irfan, CC BY-NC-ND

[i]f you think this is about Google getting into the handset business, think again. If Google were to get into the handset business, they would turn their back on partners like HTC, Samsung and others.
Today’s deal is all about acquiring Motorola’s backlog of mobile-related patents. When Google lost out on the batch of Nortel patents, they worried that Android was significantly at risk.

A risk stemming from the fact that, in spite of developing Android under an open source license, powerful patent holders such as Microsoft were able to squeeze out licensing fees from corporate Android users. The bizarre result being that Google, the main developer of Android, gives away its contributions to the operating system for free while its not-contributing competitor Microsoft charged hardware producer HTC $5 for any shipped Android (!) smartphone (see business insider). Read the rest of this entry »

Microsoft’s 1991 “Press Computer Dictionary” defined “Vaporware” as follows (taken from Bayus et al.):

“vaporware n.  (1) a product that the vendor keeps promising is about to arrive ‘really soon now’, but it goes so long past its shipment date that no one believes it will ever really ship […] (2) slang for announced software that may never materialize […]; (3) a term used sarcastically for promised software that misses the announced release date, usually by a considerable length of time”

Into management language “vaporware” could probably best be translated as “strategic product pre-announcement”. Especially in technological network markets, corporations with strong market power pre-announce upcoming products and promise a wide range of features so that customers refrain from adopting or even switching to an already existing alternative solution. The rationale behind those strategies is relatively simple and it transcends network markets, reaching into the realm of standardization with network effects in general: “the standard that is expected to become the standard will become the standard”, as Shapiro and Varian put it in their seminal book “Information Rules” (1999, p. 13).

For decades, Microsoft was the uncrowned king of vaporware. (Actually, already in 1985 Bill Gates received the “Golden Vaporware Award” by Infoworld’s editor Stewart Alsop.) The long pre-announced introduction of Windows 95 is legendary and has just recently been topped by Microsoft starting to announce new features of Windows 7 immediately after the release of its unloved Windows Vista.

Seen in this light, the recent reactions of Microsoft officials to Google’s pre-announcement of “Chrome OS” (see “Microsoft vs. Google: New Fronts in a Paradigmatic Battle“) do not lack unintentional humor. Microsoft’s Senior Vice President, Bill Veghte, bemoaned in an interview that “so far Google’s Chrome OS is nothing more than a blog post.” Even more revealing is yesterday’s remark of Microsoft founder Bill Gates, as reported by CNET:

“Gates said it was hard to really say much about Chrome OS, since Google has said so little about how it will actually work. ‘The more vague they are, the more interesting it is,’ he said.”

Both critiques resemble accusations Microsoft regularly had to deal with in the past. But maybe Microsoft is right and Google will be its successor to the throne of vaporware. We will see.

(leonhard)

Together with our recent guest blogger Sebastian Botzem from the Social Science Research Center in Berlin I prepared a piece for this year’s EGOS Colloquium, which is taking place in wonderful Barcelona. In the sub-theme titled “The social dynamics of standardization” we are presenting our paper “The Rule of Standards: Codifying Power in the Transnational Arena” (PDF), in which we try a relatively unorthodox comparison: We contrast the case of Microsoft Windows as a technological market standard with non-technological and negotiated accounting standards in the realm of the International Accounting Standards Board (IASB).

Not least to our own surprise, both examples of standardization show many similarities that allow drawing conclusions for transnational governance by standard setting in general. Among these are the following:

  • Due to coordination effects, in both cases an increase in the total number of adopters paves the way for – though not guaranteeing – one dominating standard.
  • While having been developed differently (market competition vs. political negotiation), in both cases growing standard diffusion reduced the need for participatory or inclusive modes of standard-setting (see the figure below).
  • Finally and again observable in both cases, growing adoption can trigger what we call the dialectics of power in standardization: The successful establishment of a standard redistributes benefits and power among affected actors and feeds back into the standard formation process.

Comparing Standardization Processes

But aside from these conclusions, the paper may also illustrate why gathering seemingly very different empirical fields under the common umbrella of “governance across borders” in this blog might make sense after all.

(leonhard)

The Book

Governance across borders: transnational fields and transversal themes. Leonhard Dobusch, Philip Mader and Sigrid Quack (eds.), 2013, epubli publishers.
January 2019
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