Jan Softa CEO at somerco.com Date: 2013-09-01

Enhance EC member states competitiveness in R & D

Part 6: Standardization as a tool to increase competiveness

Abstract: I discuss how standardization can be used as a competitive tool for present ICT technology and move

on with futuristic ICT products that later could be on the market. EU with ETSI, CEN, CENELEC and industry

should figure out what is the most likely scenario to reach an industry standard and at the same time gain an

advantage to European ICT companies. There are three scenarios for ETSI, CEN and CENELEC to consider

when they work to use standardization as a competitive tool for European ICT companies.

Background

Helping geniuses! Our slogan sums up who Somerco aims to help. Somerco are a company

that target to help researchers and innovators so that these geniuses can create prosperity and

jobs in society. In this discussion draft, I present how EU can work with different parts of the

ICT sector to become more competitive. It is relevant for European companies who work

with hardware and software.

Introduction

The Commissions Enterprise and Industry and the ITRE committee at the Parliament has an

interest in helping the industry to become more competitive. A measure is to set the agenda

on the market by using standardization for industry products and services. To use

standardization as a competitive tool can be used by most industry sectors.1 In this discussion

draft, I focus on how standardization can be used as a competitive tool for European

companies in ICT.

Standardization organizations & private companies

An industry standard can come about in different ways - sometimes planned and sometimes

unintentional. When they occur unintentional it emerges from the private sector often due to

that they have had a successful product or service on the market.2 The planned are set by

standardization organizations such as the International Standardization Organization

(ISO),the European Telecommunications Standards Institute (ETSI), the European

Committee for Standardization (CEN), the International Electrotechnical Commission (IEC)

and the European Committee for Electrotechnical Standardization (CENELEC) often

1 The point I am making is not that we should rush into setting industry standards just to gain competitive

advantages for the sake of it, but it is important to be aware it can be used this way and map out how and when

it is possible to help the European ICT companies. 2 An example of this is when Phillips and Sony created the old CD format for music, which later became an

industry standard.

Jan Softa CEO at somerco.com Date: 2013-09-01

promoted by private companies or by organizations that promote open source products in an

industry sector. In this proposal, I suggest that ETSI, CEN and CENELEC increases its

efforts with especially the European companies in order find out if there are possibilities to

use standardization as a competitive tool.3

Many standards for Information technology is discussed by ISO in the committee ISO/IEC

JTC 1 – Information Technology and IEC before they are adopted and therefore ISO and IEC

are an important target for ETSI, CEN and CENELEC after they held discussions with the

European industry. To a great extent this is already happening. However, when it concern

ETSI, CEN and CENELECS work with companies outside the EU-zone it could be just as

important for European companies to have an early on knowledge of what is happening with

new products that are about to be standardized and introduced on the market. I believe it is a

somewhat different approach for ETSI, CEN and CENELEC and demands more proactive

work in order to gain knowledge outside the EU-zone. Initially they should lend the ears of

its 60.000 technical experts from industry, research and academia. After they got their

feedback about companies, universities and research institutes that conduct R & D that can

set new industry standards - invite them for discussions and try to involve the European

companies in the discussions. It could benefit European companies by helping them to

prepare their production facilities to meet the demand for these new products. A bonus is that

these European companies have established contact with potential new clients.

Perhaps, the European Commission in its discussion with ETSI, CEN and CENELEC should

push for this development. In order for ETSI/CEN/CENELEC to be able to do these work

tasks effectively it would be beneficial if the Commission could earmark funding for this

purpose. This money could be used for inviting interesting companies, research institutes and

organizations or go and visit them for information.

Standardization to compete To start with, it is important to map out in what areas European

ICT companies are leaders and thereby can set new standards in industry that give them a

competitive advantage over their rival companies outside Europe. In the areas where the

European ICT companies are not dominant it is necessary for Governmental Standardization

Agencies to take the lead in order to discuss and create European/global standards that give

the European ICT companies a competitive advantage.

The figure display different ICT sectors EU should help to gain a competitive advantage in

the present and in the future.

Present Future

Hardware Components (microchips)

Infrastructure (4G netw.)

End-user (smartphone)

Components

Infrastructure

End-user

Software Infrastructure (Android)

End-user (Apps & Windows)

Infrastructure

End-user

3 I want to point out that an industry standard does not have to be based on filed patents. In information and

communication technology the open source community is large and can also set new industry standards.

Jan Softa CEO at somerco.com Date: 2013-09-01

I have divided the discussion into different parts that makes it easy to find out what needs to

be focused on in each of these sectors. EU with ETSI, CEN, CENELEC and industry should

figure out what is the most likely scenario to reach an industry standard and at the same time

gain an advantage to European ICT companies. Before I go deeper into the discussion, it is

important to acknowledge that it is necessary to cooperate with companies outside EU who

have a dominant position on the market and companies, universities and research institutes

outside the EU-zone who develops new cutting edge technology. Another scenario for ETSI,

CEN and CENELEC to consider is when European ICT companies could set an industry

standard on their own. A third scenario is when ETSI, CEN and CENELEC have to take the

lead and push for industry standards to be adopted. It means there are three scenarios for

ETSI, CEN and CENELEC to consider when they work to use standardization as a

competitive tool for ICT companies. (A) A non-European company is dominant in the ICT

sector means the European ICT companies and ETSI, CEN and CENELEC listen and catch-

up to them. The action is to seek cooperation with them as soon as possible in order to gain

knowledge and thereafter implement standards. (B) When European companies are leaders on

the market it means ETSI, CEN or CENELEC should listen and implement standardization

on their suggestions and (C) ETSI, CEN or CENELEC chooses to take the lead because there

are not any European companies or dominant non-European companies on the market that

can set industry standards on their own.

Hardware - components4

I categorize hardware components as parts necessary for the functioning of smartphones, PCs

and blade servers etc. Another criterion is that without being put together with other

components they have little usage of its own. Examples of these components are amplifiers,

memory cards and computer chips.

When it concern components the product portfolio is vast with producers in Europe and

outside. It means there are many scenarios to consider for how to best set a new industry

standard. Multiple European companies are producers of hardware component such as

STMicroelectronics, Alcatel-Lucent, Infineon, AMS, xFAB, dektec and Kontron. Alcatel-

Lucent and Infineon are large well-known European producers of semiconductors.

STMicroelectronic is especially known for its production of microcontrollers. There is also

plenty of research in this sector conducted by SMEs and when these come up with a cutting

edge technology it is important these are backed. ETSI/CEN/ CENELEC should try to back

their suggestions for industry standards in Europe and also promote them at ISO and IEC.

As mentioned before, I believe ETSI, CEN and CENELEC should seek up researchers and

companies outside EU in order to help the European companies. For instance, companies as

4 The European Electronic Component Manufacturers Association has close links to the European

Semiconductor Industry Association and European Passive Components Industry Association.

Jan Softa CEO at somerco.com Date: 2013-09-01

Intel, AMD, Marwell and Renesas just to mention a few are interesting to have a dialogue

with. The US companies AMD and Intel are dominant and leading producers of computer

chips and therefore conduct a lot of R & D. Their future product portfolio is interesting to

discuss in order to find out what standards they are planning to use. Therefore,

ETSI/CEN/CENELEC should invite these to a dialogue as early as possible. Their dominant

market position when it concern microchips makes it important for European companies to

have knowledge about for their own R & D of new products. Moreover, to have an early

knowledge of possible future standards make it possible for European companies to meet

their demands and offer to become producers of their products.

It is a fact that a lot of R & D resources are put into developing new competitive products in

this sector. It has a heritage of large investments in time and financial resources before these

new products turn up on the market. During the latest decades we have seen an enormously

rapid development in the performance of components. As an example, it has been said that a

microchip double its performance every 12-18 month. More futuristic types of technology are

being researched for the production of components. In the more distant future we will see

even larger jumps in performance due to new production methods but especially due to new

technology are ready to be used in production such as nanotechnology.

“Using nanoscale light-emitting diodes, or LEDs, computer engineers at Princeton have found a way to transmit

information via microchips using much less electricity that current methods, which typically rely on lasers.

"Nanophotonics is key to thetechnology. In the heart of their device, the engineers have inserted little islands of

the light-emitting material indium arsenide, which, when pulsed with electricity, produce light."”5

The European Union are also financially supporting an increase in performance of

microchips. For instance, FP7 has funded a project that focus on Germanium:

“In the Duallogic project, we wanted to replace [the] silicon channels of transistors with higher-mobility

semiconductor materials like germanium and compound semiconductors to make the charge carriers - electrons

and holes - move faster through the transistor.”6

It is possible to discuss possible industry standards for also these technologies with industry

in order to find out if these can be adopted later. An early understanding of future standards

could help European companies figure out how large scale production could be done. I

believe, it could turn out to be a big competitive advantage for Europe.

Hardware – infrastructure

In product terms, I would describe hardware infrastructure as telecom network gear from

Ericsson or blade servers from IBM.

5 Nanotechnology Powers New Microchip http://bigthink.com/ideafeed/nanotecnology-powers-new-microchip 5

Feature Stories – Microchips for the mobile information age.

http://cordis.europa.eu/fetch?CALLER=OFFR_TM_EN&ACTION=D&RCN=7176

6 Feature stories – Microchips for the Mobile Age.

http://cordis.europa.eu/fetch?CALLER=OFFR_TM_EN&ACTION=D&RCN=7176

Jan Softa CEO at somerco.com Date: 2013-09-01

To obtain a dominant position on the market when it concern hardware infrastructure

demands a lot of efforts, financial strength, good sales channels, large production capacity

and often huge investments due to that this ICT sectors is more mature and have much

competition. At present, there are several European companies active in the hardware

infrastructure sector but only the very few and largest of European companies can set an

industry standard. An example is the Swedish Ericsson who is by far the largest distributor of

telecom network gear. Also Chinese Huawei is successful in this sector with a somewhat

similar product portfolio. When it concern research institutes, universities and SMEs in this

sector it is highly unlikely that they will be able to set an industry standard on their own. It is

more likely they come up with new state-of-the-art technology. It is difficult to achieve

success in this market sector because it demands a lot of financial strength and capacity to

produce on a large scale.

These requirements should affect the work of ETSI/CEN/CENELEC. It is helpful for large

companies like Ericsson to have an early dialogue with them and also to find out if CEN can

help to promote their wishes for adopting new industry standards at ISO. It is more difficult

for universities, research institutes and SMEs to obtain industry standards on its own by

having a large market-share. Therefore, ETSI/CEN/CENELEC needs to be leaders in this

work on a European level and by promoting their interest at ISO and IEC.

Fibre-optics for communication and media networks was once considered a futuristic

product, but is today a reality. What lays ahead when it concern fibre-optics in the near future

is more on improving technology to increase fibre-optics efficiency. At Monash University

researchers have found a way to increase data capacity of fibre optic networks. The finding

could greatly accelerate the speed of the NBN.

"Rather than laying hundreds of new parallel optical fibres to boost network capacity, we can make more

efficient use of the existing network by tweaking the way data is transmitted over long distances," Professor

Lowery said.7

More futuristic products probably lay in how well researchers can develop functions for new

material such as graphene. The European Commission is investing heavily in R & D to find

new usage of graphene and for how to produce these products. At least,€1 billion has been

put into EU funded research projects. Graphene is considered to be the fastest conductor of

electricity and have a low energy loss. When graphene can be produced in large scale for

networks it could reshape communication and usage of networks entirely. Mass production is

far- off, so the challenges are to find an economical way of producing it.

ETSI/CEN/CENELEC should be involved in EU funded projects of these more futuristic

products in order to discuss possible standards. It is also important to invite other leading

research projects outside the EU-zone that can reshape the performance of infrastructure in

hardware. If it is possible to find common grounds for industry standards early we could see

products on the European market earlier than in other parts of the world.

7 Improving the flow of the fibre-optic freeway. http://www.monash.edu.au/news/show/improving-the-flow-of-

the-fibre-freeway

Jan Softa CEO at somerco.com Date: 2013-09-01

Hardware – End-user

Hardware for end-users like you and me could be smartphones, PCs, Macs and tablets.

Currently, this sector is a very competitive market to enter and companies in this sector often

have a product portfolio that includes all types of end-user products. Nokia has a history of

success in this sector with their mobile phones, but they have a limited product portfolio in

comparison to many of their current competitors like Apple, Samsung and Sony who also

include PCs, Macs and tablets. More global companies outside EU like Google and Facebook

have an interest in entering this market sector. Since there are plenty of actors it is rare that

they on their own can set an industry standard. Herein, lays an opportunity for

ETSI/CEN/CENELEC to take the lead and cooperate with industry in and outside EU. It will

benefit European companies and the subcontractors in Europe.

Many ICT companies in Europe and outside Europe work on developing new futuristic

products that will enter the market in the future. Also here are new types of material in focus

because they can transform the shape and usage of end-user products. Once again the

material graphene could be used as replacements material for laptops and tablets. Nokia

might use graphene to make a lighter, more durable phone that can’t overheat. There is also

much research outside Europe on graphene. South Korean scientists say they have developed

flexible memory technology that could support bendable computer platforms for e-books and

cell phones.8

How can ETSI/CEN/CENELEC help the European companies set standards for futuristic

products so that European companies will gain a competitive advantage against competitors?

When it concerns how to standardize ICT products for graphene, the Graphene Flagship

Consortium backed by EU is a good starting point. To have an early input from this

consortium will help potential European producers for end-user products to figure out how to

mass produce products based on graphene. Europe has already initiated research cooperation

with South Korea when it concern graphene’s potential usage for end-user products. Horizon

2020 should continue on this path and perhaps also look into how ETSI/CEN/CENELEC can

be part of this development by planning for new industry standards.

Software – infrastructure

Software infrastructure is everything from operating systems to middleware to database.

8 As China takes graphene lead, Nokia, Phillips, Europe get cracking.

http://www.smartplanet.com/blog/bulletin/as-china-takes-graphene-lead-nokia-philips-europe-get-

cracking/12029 AND South Korea scientists develop flexible computer technology.

http://www.youtube.com/watch?v=cDag6K-2-co

Jan Softa CEO at somerco.com Date: 2013-09-01

The Android platform for smartphones is an example on a software infrastructure. To

develop, market and maintain a software infrastructure for the market often need strong

financial support and a community of supporting developers outside the company or the

developers. Without at least one of these criteria it will not become a success.

The Android platform is an example that fulfills both criteria and in addition it was made

open-source. These are reasons it very rapidly became a success. Android has a large

community of developers writing applications ("apps") that extend the functionality of

devices. Previously, European companies have developed software platforms for their mobile

phones. However, today when smartphones has replaced mobile phones they opt for Google’s

Android as a platform. Nokia use Microsoft’s Windows Phone. The US companies Apple and

Blackberry use their own software infrastructures. This development shows that the European

software infrastructure producers has been out-competed when people has started to use

smart phones. An interesting issue to discuss is if the European software infrastructure

producers of mobile platforms would have been able to remain competitive against its US

competitors if they could have agreed upon common standards. Perhaps, this is an example

on how ETSI/CEN/CENELEC with the backing of the European Commission could have

helped by being a driving force for cooperation among European companies.

In particular, US companies are successful when it concern non-mobile platforms. We find

US companies such as Attachmate, Brocade, Cisco, Microsoft and IBM. However, there are

excellent examples of European companies active in the software infrastructure sector as

British Canonical who uses Ubuntu and Software AG, Germans second largest software

company, provides enterprise architecture management, BPM and ESB technology.

Moreover, there are European companies that provide software infrastructure for cloud

solutions. Examples are Zimory who offer a technology suite for enterprises to transition

virtual data centres into cloud-based infrastructure and Abiquo whose cloud management

platform offer businesses to develop, control and deploy applications across private, hybrid

and public clouds. The US Company Amazon has its Amazon Web Services. In an initial

stage ETSI/CENELEC/CEN should focus on the European companies in order to discuss

future standards they can promote at ISO. Thereafter, invite dominant software infrastructure

providers such as Amazon and also those companies and research institutes outside EU that

could be future providers of state-of-art software.

The open-source community is large in this sector with Linux operating system as one of the

more known examples. Linux has its advocates in industry and in research groups at

universities. A driving force in Linux development is the Linux Foundation with supporters

like Intel, Samsung and HP. Much R & D efforts are being put into future software

infrastructure by these actors.

In the report the Future of Cloud Computing they address some of the future challenges for

the research and technological development in the area of Cloud Computing. One example

they discuss is that plenty of research issues remain to be addressed in the context of cloud

provisioning. Europe should exploit the available expertise and results from areas such as

Jan Softa CEO at somerco.com Date: 2013-09-01

Grid, Service Oriented Architectures and e-infrastructure to help realizing the next generation

of services on cloud systems.9 The people who conducted this report could make a valuable

contribution to ETSI/CENELEC/CEN about potential new standards.

Software – End-user

There are much software for end-users such as apps for smartphones, video games, Windows

and more business oriented software such as procurements software and science software for

RNA-analysis etc.

When it concern software for end-users European companies are able to compete

successfully. In game development US are no 1 and Japan are no 2. Examples on US

companies are SEGA and n-Space and examples on Japanese companies are Nintendo and

Kotami. There are also plenty of European companies who produce games such as Techland

from Poland, FUN Labs from Romania, Haeminont from Bulgaria and Black Rock Studios

from UK. The production cost for most games are very high and therefore requires many

players and buyers of its products. This industry develops it games based on software

infrastructure provided by other companies, so ETSI/CEN/CENELEC task should be to put

these two sectors together in order to discuss possible future standards. By knowing what to

expect of the future software infrastructure the European game industry can early on plan for

what games they can develop. Moreover, game developers in particular are dependent on the

performance of components so to have an early knowledge of their capacity will also help.

When the first search engines was being develop the market was dominated with US

companies and since then no European companies has managed to create a search engine that

can compete in performance with the US. Nowadays, Google and Yahoo dominate the search

engine market for Latin letters. Outside the EU - zone we see that companies like Rambler

and Yandex from Russia and Baidu from China are dominating their markets. It is due to that

the Russian search engines are developed to search effectively for the Cyrillic alphabet and

Baidu for Chinese signs.

Semantic search engines are techniques that are considered to be the future for doing searches

of content on Internet. When it concern semantic search engines there are not any European

companies who can claim to be a dominant actor. The French semantic search engine Yatedo,

who is a people search engine, is an example on a European company that could succeed in

its niche. In semantic search also US companies are successful with Wolfram as an example.

Even more important is that Google is going to base its future search engine on semantic

technology. It is not that European research institutes and companies has not put in funding

for researching technology for semantic search engines, the issue is that they are not able to

turn it into competitive products on the market. It would have been interesting for

ETSI/CEN/CENELEC to ask their technology experts to collect knowledge from European

research institutes and companies in order to discuss potential future standards for semantic

9 The Future of Cloud Computing http://cordis.europa.eu/fp7/ict/ssai/docs/executivesummary-forweb_en.pdf

Jan Softa CEO at somerco.com Date: 2013-09-01

technology. Perhaps, it could lead to a competitive European search engine sector. If it can

happen in Russia and China it could happen here.

When it concern software for end-users, apps for smart phones is probably the easiest sector

to enter and become successful in by gaining a huge penetration on the market. The

competition is here too, but with internet and a buzz of a company’s products it is easy for

customer to find them. When it concern apps it will probably be difficult for

ETSI/CEN/CENELEC to push for industry standards. Much is due to that this sector bases its

technology entirely on software infrastructure provided by other companies as Google’s

Android. However, I believe it is important to invite these for discussions at the same time as

developers of software infrastructure in order to find out what they expect to do in the future.

Software for research is helping with finding research discoveries faster and cutting costs for

universities and companies. It is considered to be a highly profitable software sector. There

are plenty of European companies active in this product segment, such as Lifetechnologies,

Sourcebioscience and Sciencedirect. Also software for business is a product segment that is

competitive and this is also one of the sectors where European companies excel. The most

successful European software manufacturer for business use is German SAP. As a

comparison, SAP (€16.22 billion) is the European company who come closest in revenue

with the likes of Microsoft ($77.85 billion) and Google ($50.18 billion). To push for

standards in Europe and at ISO will benefit many European companies. The sector is still

growing rapidly and have a high net profit.

The future of new software products is very dependent on what products we will see in the

other sectors on the market in the future. Here we will see how all the other ICT sectors

future products will have a large effect on how future software for end-users will be used, its

layout and design. For instance, the development of bendable monitors based on grapheme

technology will also affect the layout of software products, the design of the software itself

and how we can use this software.

An example on a futuristic software product for end-users is being developed by Los Angeles

tech firm Oblong Industries. The software essentially creates a multi-screen tabletop, on

which can be scattered videos, documents, notes and so on. Special wands or hand gestures

allow the user to sift through the files, drawing connections between related items and

zooming into others.10

It is a perfect example on how the layout and usage of futuristic

software could be in the future.

Also Microsoft Research is presently working on some pretty clever 3D holograms. By

combining the age-old optical illusion of the mirascope toy with a modern light field display,

a team of researchers have managed to make a moving 3D image float in midair at 15 frames

per second, emulating 192 different viewpoints at a time.

10

Futuristic software from Minority report is real. http://www.foxnews.com/tech/2012/07/23/futuristic-

software-from-minority-report-is-real

Jan Softa CEO at somerco.com Date: 2013-09-01

What more?

The European Commission in its discussion with ETSI, CEN and CENELEC should push for

this development. In order for ETSI, CEN/CENELEC to be able to do these work tasks

effectively it would be beneficial if the Commission could earmark funding for this purpose.

This money could be used for inviting interesting companies, research institutes and

organizations or go and visit them for information.