Automotive Standards

By Warren Savage, CEO, IPextreme

The Downside of Standards
The benefits achieved by standards are not without cost. Let's review some of the downside that comes along with standards.

- Standards can take a long time to gain acceptance, making the "time to money" much longer than a proprietary solution. However, if the standard is adopted, the upside is well worth the wait.

- Standards, by definition, limit the ability for differentiation, increasing likelihood of commoditized products, which is usually a desired outcome of the community backing the standard

- Standards usually deliver solutions that are not cutting edge technology

- Standards often are a compromise. It’s not uncommon for parties developing a standard to disagree over a particular feature or requirement that is to become part of the standard. The resolution often results from a technical compromise which is satisfactory, though not ideal for either party.

- Standards can be political. Has a company ever pushed a particular standard for its own commercial benefit?  Absolutely! 

While the downsides associated with standards seem compelling, in reality, the benefits dramatically outweigh the negative aspects.

Why Standards are Essential
One of the most beneficial aspects of standards is their ability to enable rich ecosystems. A standard allows for interoperability across the entire supplier base. This has the benefit of increasing the number of players by "leveling the playing field" and ensures multiple winners in a crowded market. If leaders fail their customers, the market will quickly find interoperable competitors that can quickly come to the front.

As such, standards enable efficient industries. Many competitors encourage continuous improvement through competition and as a result high quality solutions become available to customers at the lowest possible price.

Automobile standards are especially important due to the long life and safety critical nature of the application. These standards allow for a stable replacement parts industry that can continue to provide parts for consumers long after vehicles have gone out of production. In addition, these automotive standards can help improve safety by establishing a formal specification of the standard that an independent testing organization can use to verify compliance with the standard.
 
The Future is Standards
In an era when the cost of development is ever rising, standards will prevail over proprietary alternatives largely due to the benefits provided to both manufacturers and consumers. For example, the automotive industry is going to drive suppliers to standards-based technology which limits their supplier risk, keeps their costs low, and provides their customers with the best, cheapest, safest product.

If you have any questions please do not hesitate to contact us at info@ip-extreme.com