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Software Industry Equals Open StandardsTrond Arne Undheim, PhDDirector 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?

EnterpriseEnterprise

ManufacturingManufacturingIndustriesIndustries

RetailRetail

CommsComms

BankingBanking

InsuranceInsurance

UtilitiesUtilities

OthersOthers

Applications

Diversified Enterprise Portfolio Across Industries

EnterpriseEnterprise

PerformancePerformanceManagementManagement

IdentityIdentityManagementManagement

ContentContentManagementManagement

MiddlewareMiddlewareManagementManagement

DatabaseDatabase

Systems Systems ManagementManagement

Technology

Leader In Key Markets

• Database• Data Warehousing• Database on Linux• Embedded Database• Middleware• Enterprise Portal• Application Server• Enterprise Performance

Management

• CRM• Human Capital Mgmt• Retail• Communications• Financial Services• Banking• Public Sector• Professional Services

“ENOUGH!”

Let’s do the math

Interoperability =

Open standards

Let’s do the math

Open standards+

Wide implementation=

Good Business

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“Opting for open standards is a very wise business

decision indeed”

Nelly KroesDG COMPETITION

The Benefits of Open Standards

Reduce costsEconomic growthMarket access

Market stabilityAvoid lock-inTransparency

New technologyBetter productsInnovate

Source: The Momentum of Open Standards - a Pragmatic Approach to Software InteroperabilityThe 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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“In the software business, creating, consolidating and promoting open standards is the best way to ensure interoperability“

Trond Arne Undheim, Ph.D.Oracle Corporation UK Ltd.

European Commission

European Parliament

Member States The Council

The European Standards Policy Environment

• Benchmarking• Best practice• Legislative initiative

• IMCO-committee• ITRE-committee

• 27 Member States• EU27+• Influence in Asia and

Latin-America

• Decision making• Regulations• Directives• Decisions

EU

THE

FUTURE

OF

BUSINESS

IS

OPEN

STANDARDS

Why Open Standards are important

• Enabling innovation (TCP/IP).• Avoiding lock-in (ODF).• Reducing costs (interoperable technology).

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“The Internet is fundamentally based on

the existence of open, non-proprietary standards.”

Vint CerfFather of the Internet

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

Single vendor lock-in

Chinese government

Oracle

The Broken Way

SMEs

EU

Open Standards

Chinese government

Oracle

The Better Way

SMEs

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

Global

Royalty free Disclosed ex ante

• Healthy process

• Non-RF as the exception

• Certainty• Late disclosure as

the exception

• Wide implementation• Actual interoperability

Open

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 STANDARDSSee Trond’s Opening Standard http://blogs.oracle.com/trond