The Need for Standards: Networking, 1975–1984

Abstract

tain future. As early as December 1980, a respected market research firm issued a report forecasting LAN sales to grow from essentially zero to $3.2 billion by 1990.1 A year later, the Economist magazine summarized the state of affairs in local area networking as “a technological jungle in which experts violently disagree and potential buyers stand aghast.”2 Could technological order emerge from this chaos? While the focus of our book has been on the emergence of new markets pio­ neered by new firms, market order does not always coalesce when many com­ petitive technologies exist to meet similar user needs. Technological outcomes don’t always follow from market competition alone; in many cases, the creation of technical standards helps to reduce diversity and stimulate market growth. How­ ever, establishing the social structures needed to create and administer standards can be every bit as challenging as the founding of new companies. As is the case with other markets, in the networking market the adoption of standards helped to create market order and usher in a period of explosive growth. The institu­ tional entrepreneurs who led these new standards-making institutions faced both political and economic challenges. They were successful when they were able both to secure the backing of existing authority structures and to steer rivals toward collective decisions and actions. The Need for Standards: Networking, 1975–1984