Integrating Standards Education 

into the Business School Curriculum 

Stephen K. Kwan, Ph.D. 

Lucas Professor of Service Science 

Nitin Aggarwal, Ph.D. 

Associate Professor, Management Information Systems 

Lucas College and Graduate School of Business 

San Jose State University 

One Washington Square 

San Jose, CA 95192 

Final Report - submitted 6/30/2014 

Award 60NANB12D285 

NIST Measurement Science and Engineering (MSE) Research Grant Programs 

Standard Services Group (SSG) Grant Program 
Abstract 

Standards' are ubiquitous, yet the U.S. workforce awareness about the importance of standards 

and their economic and societal impact is minimal. For example, very few people will attribute 

the emergence of global trade and commerce to standardization of shipping containers in 1956. 

We attribute this lack of awareness to the dearth of standards education in many institutions of 

higher education in the U.S. In this project we identify reasons attributable to the lack of 

standards education in universities and outline a solution for generating interesting, relevant and 

engaging teaching materials to overcome these shortcomings. The developed solution is stealthy 

and not intrusive, by design, so that it can be easily adopted and integrated with existing teaching 

materials. We illustrate this solution with examples applicable to an undergraduate business 

systems and policy course in an accredited business curriculum. We intend to disseminate the 

teaching materials to the community. We also discuss how this solution could be implemented 

for graduate level courses in business. 

l. introduction 

Few people, if any, would know and attribute the advancements in global trade, outsourcing, and 

shrinking of the world distances2 to standardization of shipping containers. Yet, the fact of the 

matter is, with standardization of shipping containers in 1956, the cost of shipping was 

drastically reduced, and the shipping process greatly simplified, making large-scale outsourcing 

and offshore manufacturing commercially feasible (Levinson 2008). The containers carrying 

goods were freely and easily transferable from sea to rails to trucks to cities in a highly 

automated fashion thus permanently changing the economic milieu of the world. 

This is just one of the many examples where standards have had a major impact on our way of 

life. Unfortunately, when milestones like these get ignored while educating masses, it makes it 

difficult for the workforce to recognize and use such opportunities for economic gains. We 

believe that there is a significant problem oflack of workforce awareness in standards. As a 

result, there is limited knowledge among the general population on standards, what they are, how 

they impact enterprise strategies and decisions, how they affect our purchase decisions and 

choices, how they affect our lifestyle, etc. W c attribute this shortcoming directly to the lack of 

standards education in many institutions of higher education in the U.S. 

We have identified at least three reasons why standards education is missing in higher education 

curricula. First, there is a lack of awareness that standardization issues are not just technological 

and engineering in nature but span across many disciplines such as business, sciences, arts, law, 

and medicine, etc. Second, there is a lack of appropriate and interesting course material, 

textbooks, case studies, and other study guides that are conducive to teaching and engaging the 

1 In this, the tenn standard is used to refer to "standards and standardization". 

2 cf. Friedman 2005. 

2 
students. Third, even though coverage of standards-related topics is required by some disciplinespecific accreditation agencies (e.g., ABET'), the amount, vigor, and even common content and 

assessment criteria are not clearly specified. As a result, standards education is not a prominent 

subject area in university curricula. This is particularly true in business school curriculum even 

though business graduates are as likely to encounter standards-related issues in their career as 

their engineering peers. This lack of standards education has long-term consequences for the 

U.S. economy since the knowledge and expertise of the current generation of the workforce with 

standards acumen are not being sufficiently replenished. 

In the next section, we discuss the three problems in detail and provide support of our premise. 

We then describe our solution to address the problems based on our recommendations. Project 

personnel and qualifications, institutional capabilities, are included in Appendix B. 

2. Background 

2.1 Standardization issues 

Standardization issues are usually thought of as technical in nature. For example, issues such as 

how disparate technologies are made to work together? Or how information is exchanged 

between these systems? One would imagine that the solutions to these technical problems would 

also be technical. However, this is far from reality. Standardization involves many stakeholders 

with their own agenda. As a result, the solutions are usually a compromise ofeveryone's 

expectations or in most cases, resulting in a minimum specification that achieves interoperability 

among systems. This makes standardization as much of a social, economic, and political process 

as it is a technical issue. Unfortunately dealing with something like this is not something that is 

intuitive to most people, including experts in their own disciplines. It requires training and 

education to get a standards perspective and lack of this perspective could result in missed. 

opportunities. 

2.2 Lack of course material 

In this project we focused on standards education in an accredited business curriculum. We are 

confident that what we developed can be easily extended to other disciplines. We surveyed the 

top five textbooks for a business systems and policy course 

4 and found no reference to standards 

or standards-related issues. These textbooks are designed for an introductory course that is 

required of all business students and covers business technology topics like running an enterprise 

to using technology for competitive advantage. 

The lack of coverage in the textbooks means that standards issues do not come up for discussions 

in the class in any form. As a result, the business students do not get familiarized with the 

concepts of standards, their impact on our society, and their value addition in our economy. 

3 Accreditation Board for Engineering and Technology. 4 Often offered as an Introduction to Management Information Systems (MIS) course. 

3 
2.3 Lack of direction 

Some agencies such as ABET require coverage of standards-related topics as part of a course 

curriculum in their respective disciplines. However, the content area and assessment criteria for 

such requirements are usually not explicitly specified and vary widely from discipline to 

discipline ( e.g., in different Engineering curricula such as electrical engineering, industrial and 

systems engineering, etc.). 

Often times the standards are studied and researched in the business school particularly in the 

areas of Technology Management, Management Information Systems, Innovation, and 

Competitive Strategy. However, the coverage is limited to few graduate level electives or 

academic research, but not a part of business school curricula. Standards are also not considered 

a part of the Business Knowledge in an AACSB5 accredited curriculum. 

3. Proposed Project 

An obvious solution to the problem would be to introduce courses on standards in the 

appropriate disciplines. However, this is not a viable solution because of the inflexibilities in the 

structure and operations of universities. There are immense bureaucratic barriers in introducing 

new courses. The problem is amplified by the lack of understanding of the use and importance 

of standards by faculty. Another problem is that standards cannot be tied to a single domain. 

For example, just in the area of information systems, we have database standards, networking 

standards, programming standards, systems analysis and design standards, service quality 

standards, etc. As a result it will be difficult to introduce so many standards courses in every 

area. Thus, we feel that just introducing courses on standards will be impractical and 

unreasonable. 

3.1 Plan 

We believe that, targeting course material supplements without requiring the modification of the 

course syllabus, while maintaining the accreditation agency's assessment goals, is much easier to 

implement and a much more practical approach than introducing a new course. We advocate a 

non-intrusive method to introduce standards into the curriculum by stealth. To demonstrate, we 

developed and will share teaching materials for a business curriculum. Our intended point of 

stealth entry is in the upper division business systems and policy course required for all 

undergraduate business majors. The course is usually required as the implementation of the 

underb>raduate Program Learning Goals of Business Knowledge, Critical Thinking, and 

Innovation in an AACSB International accredited curriculum6

. 

5 The Association to Advance Colleges and Schools of Business: the premier accreditation organization 

for business curriculum. Currently there are only 711 accredited business programs in 4 7 countries (June 

2014). 

6 We are basing this on some of our college's Program Leaming Goals. Each AACSB accredited program 

has similar Goals. 

4 
To develop a set of useful course materials that can be easily integrated with the existing course 

curriculum, we surveyed a variety of textbooks to identify a common theme ( see Appendix A for 

more specifics). We also reviewed different versions of the same book to identify trends and 

contemporary topics. What we found was that almost every book covers traditional topics such 

as strategic use of information systems, databases, networking, and data communication. These 

topics had remained the same across many versions of the books. In these chapters we often 

found short case studies and vignettes scattered throughout the pages to illustrate topics being 

covered. 

While reviewing the textbooks, we also noticed that the most recent versions of the above books 

were trending towards introducing chapters on newer technologies such as e-commerce, social 

media, mobile commerce, cloud computing, and globalization. It is these areas that we feel our 

contribution will be maximized because these topics will become mainstream in the next few 

years and it will be easier for us to incorporate new terminology along with new concepts. 

We wrote a series of short case studies that could be used as supplemental materials to illustrate 

and strengthen discussion of these topics. These case studies were crafted from real world 

scenarios taken from enterprise practices and business news that have relevance to standards. We 

prepared student study and discussion questions as well as teaching notes to accompany each 

case. The teaching notes identified areas where the instructor could bring in the relevance of 

standards and enhance the discussion in doing so. We believe that it is possible to produce such 

case studies for many, but not all, the areas covered in the course. We have made the materials as 

easy to adopt and integrate as possible regardless of which specific textbook was adopted by an 

instructor. 

Some examples of topics that are trending in the technology policy course that a stealthy 

insertion of standards could be easily accomplished: 

I. Mobile Payment Methods for the burgeoning e-commerce industry with mobile 

devices. This could lead to a discussion of multiple incompatible payment methods 

being employed in the U.S, and the need for standardization. This might also lead to 

discussion of international standards. 

IL The role of standards and standardization in a global economy. This is particularly 

relevant in the discussion of"The World is Flat"; a topic covered in most of the 

textbooks (Friedman 2005). 

III. Cloud computing and its impact on enterprise computing and cross-border provision of 

online services. Standards and standardization are significant part of the fabric that has 

technological as well as political and international trade implications. 

IV. The role of standards and patents in competition. For example, the "standards essential" 

patents acquired by Google from Motorola Mobility are part of an antitrust 

investigation by the Federal Trade Commission and the European Commission. The 

5 
issues relates to patents, standards, reasonable and non-discriminatory license fees, 

global trade, intellectual property violation, etc. (Winkler 2012). 

To disseminate these materials we intend to develop a website to provide free access and 

updates. We will announce and promote the availability of such materials to the Information 

Systems faculty community via mailing lists such as ISWorld7, and other mailing lists from 

American National Standards Institute Committee on Education (ANSI COE), European 

Academy for Standardization (EURAS), International Cooperation on Education about 

Standardization (ICES)8, etc. 

The website will contain general materials about standards education, pointers to other resources 

(from ANSI, NIST, IEEE, ICES, etc.9

) and background information about the relevance of 

standards in the business c111riculum. These materials will serve as motivation and resource to 

potential adopters of the teaching materials. 

The utilities of teaching materials depend on their freshness and relevancy. We will encourage 

faculty members interested in the concept develop their own materials and make them available 

on the website. The project co-PI's will act as moderators of the submissions. The materials will 

be made available under the Creative Commons License 1°. The authors retain copyrights to the 

materials and will be able to choose specifics of the license. 

We will also encourage the submission of feedback updates to the case studies. It is common 

practice to ask students to provide updates to the scenarios as part of classroom discussion. A 

sample question would be: "what strategy was adopted by the enterprise and what is the current 

direction taken by the enterprise?" With such updates, it is possible to sustain the usability of the 

materials without having to re-write the cases frequently. These updates could be easily 

incorporated into the website. We will also implement a Web 2.0 platform for an online forum11 

for instructors who adopted the use of the case studies to provide feedback and other usergenerated-contents. Thus the community will be able to share and shape their experience in using 

the teaching materials. The community would also benefit from learning about how some 

instructor use the materials in some innovative manner. 

3 .2 Experimentation and Assessment 

7 Mailing list of the Association for Information Systems (AIS) -the professional organization of 

Information Systems faculty. It cmTently has 3800 members. 8 The co-Pis are either members of, affiliated or partnered witl1 these professional organizations. 

9 http://www.standardslearn.org/ (retrieved June 1

st

, 2012). 

http://www.nist.gov/public _ affairs/edguide.cfm (retrieved June 1st, 2012). 

http://www.standards-education.org/ (retrieved June 1st, 2012). 

ht!p://www.ewh.ieee.org/soc/es/ (retrieved June 1st, 2012). 10 http://creativecommons.org (retrieved June 1

st, 2012). 11 For example, a social networking site using Ning (http://www.ning.com/). 

6 
We experimented using the case studies with students enrolled in our College of Business' 

accredited undergraduate program. They are representative of business students in many 

universities since they have to take similar courses covering accounting, finance, operations, 

organizational behavior, strategy, etc. The upper division business systems and policy course 

(BUS4 188) is one of the required core courses in the curriculum. Our College offers about 500 

seats of the course per semester. During tl1e project period we worked with scheduled instructors 

to employ some of the developed case studies in teaching this course. We conducted an 

assessment12 

as to how well the students understand the ease studies and whether they learned 

the conveyed concepts of the importance of standards in the business world. See Appendix B for 

a list ofresources available in Institutional Capabilities. 

3.3 Adoptability for Graduate Business Curriculum 

The proposed stealthy integration of standards educational materials into an undergraduate 

business course can be adopted for graduate level courses. Topics related to business technology 

and policy is usually not covered in a single course in an MBA curriculum. The best target for 

insertion will be elective courses such as Technology Management, Supply Chain Management, 

and Business Strategy. MBA students are already familiar with analyzing case studies and there 

will be little resistance in using the method. On the other hand, the students are used to longer 

and more detailed case studies (such as those available from the Harvard Business School) and 

short case studies might be considered too trivial. The adoption of what we developed into more 

extensive teaching materials with study and analysis questions suitable for a graduate business 

curriculum will be a logical extension to this project. 

4. Summary 

In summary we felt that standards are underappreciated in our society and the lack of 

appreciation stems from the lack of education and training in standards. We addressed the 

problem by proposing to strengthen the business curriculum by providing relevant teaching 

materials on standards that could be easily and stealthily integrated. We intend to develop a webbased distribution of the materials free of charge as well as provide a platform for the community 

to generate contents, share and shape their experience. 

In the next section, we will describe the activities and accomplishments during the project 

period. 

5. Project Details 

12 Using the san1e learning objective assessment technique we employ for assessing core courses in our 

curriculum for accreditation purposes. 

7 
The project was conducted from 10/1/2012 to 9/30/2013. A no-cost extension was approved for 

the project until 4/30/2014. This Final Report is submitted within sixty days of the project enddate on 6/30/2014. 

5.1 Period 10/l/2012-3/31/2013 

A first interim report for the project was filed for the period. The interim report described that the 

project personnel made an invited presentation at the "Workshop on Strategic Standards 

Management: A neglected Competitive Underpinning" held at UCLA on June 4-5, 2013. The 

workshop was partly sponsored by NIST. Many of the presentation slides were enhanced and 

included in the second interim report and are shown in the next sub-section. 

The first part of the presentation described the project premise and the challenges of integrating 

standards education into the business school curriculum. We also delved into our approaches of 

inserting standards-related topics "by stealth". We explained how we identified the target 

undergraduate course: BUS 188 Business Systems and Policy that has up to 500 students 

enrolled per semester. 

We then explained how we investigated the popular textbooks used in BUS 188 that is a staple in 

the business scbool curriculum. We further identified topical areas where standards-related topics 

could be introduced. 

We then showed the draft of Case 1 "Software Defined Network - Is it real or is it SDN?" We 

discussed the background of the case and the motivation of bringing in the concept that in this 

technology area there are no de facto standards and there are many vendors competing 

vigorously in the space. It is an interesting technology development since it is very disruptive in 

the industry. We also brought in an example of an open platform that has many prominent 

participants (OpenDaylight). Some of the discussion points for the case are: 

• Industry Competitive Analysis - Michael Porter 

• Disruptive Technology 

• Competing Standards/Approaches: ONE, OpenFlow, OpenDayLight 

• Openness? Open API's; How Open is Open? 

• Industry Collaborative Projects - "Keep your friends close but your enemies closer" 

We also brought in examples how one industry leader reacted to the disruptive technology and 

that some of the members of OpenDayLight that are working together are competitors. 

We then brought in the premise of Case 2 "Electric Car Charging Stations". In this case there are 

also no de facto standards and the competition is fierce since electric cars are getting popular in 

8 
the US. Part of the case will also describe how industry leaders are creating incompatible 

charging stations are part of their strategy of gaining market share. 

We then presented the draft of Case 3 "Wireless payment - Wallet Share". This is a case that is 

rich with teaching points since the technology is new and the students would resonate with the 

premise of using technology to pay for goods and services. We have also prepared some 

preliminary discussion points for the case. 

Finally we described some additional cases that we will be pursuing for the project. 

5.2 Period 4/1/2013 - 9/30/2014 

A second Interim Report for the project was submitted for this period. The project efforts for this 

period were summarized in an invited presentation at the NIST-sponsored "Workshop for 2012-

13 Grant Recipients" held at NIST on November 8'1\ 2013. This report represents significant 

progress made since the report for the period of 10/1/2012 to 3/31/2013. 

SAN JOSE STATE 

UN\'IER.',>TV 

NIST Standards Services 

Education Challenge Grants 

Workshop for 2012-13 Grant Recipients 

Integrating Standards Education into 

The Business School Curriculum 

Stephen K. Kwan Nitin Aggarwal 

stephen.kwan@sjsu.edu nitin .agga rwa l@sjsu.edu 

Lucas College and Graduate School of Business 

San Jose State University 

San Jose, CA, USA 

November 8, 2013 

NIST, Gaithersburg, MD 

9 
SAN 

UNIVERSITY 

Lucas College and Graduate School of Business 

Graduate and Undergraduate 

Motivation - Standards are ubiquitous, yet the U.S. workforce 

awareness about the importance of standards and their economic and 

societal impact is minimal. We attribute this lack of awareness to the 

dearth of standards education in many institutions of higher education 

in the U.S. In this, the term standard is used to refer to "standards and 

standardization". 

• Business Students are not technical More Tech Savvy Now? 

or not interested in technical stuff at all 

BUS 188 Business Systems and-Policy • Identification of Target Course U1,1dergraduate Core--:500 / semester 

• Must be relevant to topics covered in class EverChangingWorld 

• Interesting and Empathetic Contexts 

• Stealthy Insertion of Standards-related topics 

• Easy Adoption by Instructors Is this ever easy? 

Distributed under the Creative Commons • Dissemination Attributio11-No11Commerical-ShareAfike 

(CC BY-NC-SA) license 

We have gained some experience in teaching the cases to business students ( described later in 

the report) and found that even though they are not technically oriented (as compared to, say, 

engineering students), they are tech savvy (probably due to pervasive use of personal 

technology). Most of the topics we picked as potential for writing cases are still relevant and 

updates are needed since the technology world is constantly in motion. We were fortunate in 

getting help from two faculty colleagues in trying out one of the cases in their classes, we have 

concerns that it might not be easy to convince faculty from other institutions in adoptig the cases. 

10 
To facilitate dissemination, we have decided to distribute the cases in the future under a very 

liberal no-cost Creative Commons license. 

We were on tract in meeting the project's Core Objectives as shown below. 

Core Objective(s) 

Identify reasons attributable to the lack of standards 

education in universities 

Generate interesting, relevant and engaging teaching 

materials to overcome these shortcomings. 

Ensure that the solution developed is stealthy and not 

intrusive so that it can be easily adopted and integrated with 

existing teaching materials. 

We developed, and continue to develop, and share teaching 

materials, on standards, for our business curriculum courses. 

We target upper division business systems and policy course 

required for all undergraduate business majors. 

Tbe textbook being used in the target BUS 188 class is "Using MIS" by David Kroenke. 

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11 
We have made some signifieant aecomplishrnents since the last report. The cases are included at 

the end of this report. 

Prepared a set of case studies 

to be used in existing curriculum 

Field tested one case with two 

different instructors in different 

sections. 

Second case scheduled for 

discussion in mid November. 

Continued development with 

expected completion in Spring 

2014. 

Continuous field testing and 

feedback. 

Disseminate by late Spring 2014 

Case 1 on Software Defined Network "Is it real or is it SDN" has been completed. 

i Platinum Members! 

12 
- -

Case 1: ls it real or is it SDN1'! -------· ---------

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Discussion Points 

Industry Competitive Analysis -

Michael Porter 

Disruptive Technology 

Competing Standards/Approaches 

ONE, OpenFlow, OpenDaylight 

Openness? Open AP l's; 

How Open is Open? 

Industry Collaborative Projects -

"Keep your friends dose but your 

enemies closer" 

~~ HUAWEI 

BROCADE2:J 

We have also enhanced the case with a news item from China about Brocade's (a SDN vendor) 

push into the market. A key item in their pitch was that that their offerings support Open 

Standard (re: OpenDayLight). This example helped us in bringing in discussions about Open 

Standards and the role of Standards in international trade. 

The case was also updated with a new diagram from OpenDayLight that shows the first release 

of a set of open API' s from the foundation. The technology was moving fast. It provided us with 

13 
opportunities to ask students to update the case scenario based on the most current news when 

we teach the case. 

ChanginQ World 

Case 2 about electric car chargers was completed and renamed "Charge it". 

Power Politics: Competing Charging 

Standards Could 'l1weaten A<loptiou 

ofElectll'ic Vehicles 

Case 3 Wireless Payment - Wallet Share was completed and also enhanced with news items. We 

worked with two faculty members who taught the case in their BUS 188 classes. 

14 
I'in Still Waiting for My Phone to Ba-ome My Wallet. ,,,w;n.,,wc:,me,,~ 

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Professor Scott Jensen spent considerable time in staging the case for his stndents. He assigned 

the case to the stndents to read at home and complete one of three quizzes based on the three 

technologies mentioned in the case: Google Wallet, ISIS and QR code. 

Field Test by 2 Professors in BUS 188 in Fall 2013 

1. Homework - Assign case to read and work on 1 of 3 take-home quizzes: 

Professor Google Wallet Scott 

ISIS Jensen 

QR Code / 

""'""rn•~m•~=~""'"'''~"'m' ••"'#'*" ~" ,,c,•, 

"~""'""'"--'""'"'="'~-""". "~""""" " 

'< _._,_,,-,_._,,,,,,,_. ___ ,,.,.,~,•--------··••• 

..... ~.-..... , .. , . • ... ,.ff, ... , . .. ,.u. ""~··"---·~·· 

··~"-'" .. •~WYr""°''-~'"'""° 

15 
Mobile payment as a 

percentage of 

,,,,,,,a,,,,,,,,,,,, ''''"' "'"'°"'m""m"'ec""'----'--"OiiSuCC~;;;;;;;=;,--,L----"""'! 

'" N; "''"~"'·"'' ' "'"''" ,, , '"""~,L=""'""''"'"'' "''•'COm ,-.,~" '"-'""""~ rn "•"'·'"•i"4 , •"-'"' <~C"""'A,,a,,:,,., ' ' :-,,_a,v,_,.<0,,L<,"o 

,,.,,~, ,,,,,,.,.,,~~~t~I~;;z~:5i~i~:~,,, "°'dtkJ•,- .K ,,sl,'"•"''"·• ,.,.,,,, .. "-· 

:;;;-:~;',';:'~;,~::.~::·:';:.";,:':.:~ '""' 

"'·'"'·""''"''"'"''""·"'"''"'"'""''""' ,., C(' • t, • J _,,_,~, .. ",.,. '"~'"'°' '"""""' 1s<""'1 co,'"''~"'*''"''· "MoS,k (")oc•mcc" 1,,.,.,"'"i·''"''"'"'"'•"''''"'""'"''''"'"'""''''"""'''"''"•="· "·""'~·'"'"' •~I'·'"''""""°"''''""''""'' ,, .. , I•"-'°"'" l,;O de= ~•'>"''" ,.,a,;c,J ,~"''"' ,~ o, l"l\'-" ,nc,-,,·,·: ' ,,,,,.,-~.,, 

'"'"' (0,,0 ~· ,,r.y k•'4 "" esoa,k(J''""·'' W")'l''" w,,,, ., "'"'*'''"" ""7 ;~,""''"'"' ""' ""'"--~"''', "">''""-"•'f•"'' -_.""'•"''"•"""'"i~'-1..el, 

Discussion Points 

•U.S. Market fragmentation 

• Security & Privacy concerns 

• SWOT analysis of different methods 

• Consumer's Role with the Technology 

• Global Markets 

Professor Jensen also conducted the case analysis as an in-class team exercise, There were seven 

teams in the class and they had to present their answers to the questions below at the end of the 

class session, This allowed the students ( who had done the research at home) to discuss more indepth the different technologies and issues related to standards ( or lack thereof). This is a good 

example of our "stealth insertion" approach. The students had good knowledge of the 

technologies involved and were led to discuss more about the market, competition, and the issues 

related to standards, 

2. In-Class Team Project with Presentation 7 Teams 

Case Analysis Questions 

::~~::.~· 1.:What-is the ·fundamental reason -George :couldn't dltch:hJs wallet? 

,~·-:·~ .H .._,,."~"'~, 2 . .-Us_ing-P.orter's Competitive Forces-Mode!, -evaluate the mobile 

":'~-, ,' -, .,_ .. ,~-,-•·''"' payment industry,. ---H-lt makes:a difference-in analyzing the bargaining ;;;.~::;,';;~~.:;::;:;;w power of buyers -or suppliers, state which of the :3 viewpoints from 'the 

»·""M""~"~" ,, .. ;~"" ·homework:asslgnment-you are uslng·to view the industry. 

-~ •"""~"-•'""""'~o•. 

~~=•··_"·-~-13- Compare-the three approaches·to mobile payments·fuat yourteam 

'..%~";,;,:.~:.:.'2 looked at-in.the· homework assignment. Compare and contrast --which 

,~~"'""',;·::~ one do you think is superior? ·oo you .think it.will-win in the 

..,.,.,-,,-~,.·;~~ ·marketplace? 

Wi>Mro 7~~~:n fo,:>1.: 4. Why-is the ·Mobile Payment market fragmented, and why -are there no 

:"'";·,:;:7\:,,.~:~.~. clear standards? Can there ever be a single standard? ·If you conclude 

" ,.~,~_,,..,, ... ,; . .,,,;· that there is an emerging standard, argue what-it is. 

,~"'""·-"'~·~-·-. 

16 
Professors Kwan and Aggarwal were present during the team discussions and they went from 

group to group to work with the students. 

Each team made their presentations at the end of the class session. 

At the end of the exercise, we debriefed and summarized what we learned from the exercise. 

17 
What we learned 

Confusion about application Oust like the rest of us) 

Most did not understand the role of standards to start 

Case Study brought out issues related to standards and 

inherent complexity 

• Students tend to pick standards based on technology 

and lack considerations of policy and business 

perspectives 

• They only see the technology and not the underlying 

standards, politics, and marketing forces 

• Raised more questions at the end - which is good -

fosters an enquiry mind 

Professor Richard Session who taught a different section of BUS 188 also used the case in his 

class. His approach was different. He assigned the case to the students and required them to turn 

in a write-up with analysis and answers to the case questions. Two out-standing papers are 

shown below. A synopsis of what the students did is shown on the slide. We felt that the case 

successfully brought out the issues on standards we wanted to convey. 

Professor Richard Sessions assigned the case as a write-up 

\l'irtb,Payi,,•nl 

- Wsll>.·1,;,,,, 

Ornhor:\:WD 

-

"About 10% of the Cases 

explicitly identified 

'Standards' as the main 

adoption issue while 

about 30% of the 

students identified the 

problem but did not 

directly use the word 

'Standards' (e.g., 

Regulations, methods, 

technology and the like)." 

As part of our debrief we also noted the following points which would be used to enhance other 

cases as well as in writing case teaching notes for other instructors. 

18 
• Business students need to be better informed about the 

role of standards in computation and in their daily lives 

• Challenged to look for solutions that are not just on the 

surface 

• Students commented they liked the case because it 

related to their daily lives, many of them are pretty tech 

savvy 

• Appreciation for the need for standards in market 

dynamics 

• Examples of wireless payment systems in foreign 

countries were discussed and some students asked "How 

come we don't have that here?" 

• Discussed US public/private sector partnership vs. topdown standardization in other countries 

6. Conclusion 

We have developed six cases as part of this project and they are listed in Appendix C. "Case 6-

e-books - Not all are created equal" was an invited contribution to tbis collection from our 

colleague, Dr. Patricia Franks who is an Associate Professor in the School of Library and 

Information Sciences at SJSU. She shared our interest in promoting standards issues in our 

curriculum. We have made two invited presentations as part of this project. Professor Nitin 

Aggarwal also presented the results of this project recently at the 2014 Capstone Design 

Conference June 02-04, Columbus, Ohio by participating on a panel with theme of: "Case 

Studies in Use of Standards with Capstone Projects". 

The cases will be formatted into a printable booklet (both as a whole and as individual cases) to 

be made available online. 

We sincerely thank NIST for providing the funding of this project as well as many of our 

colleagues who provided valuable comments and feedback. We want to express special thanks to 

Professor Scott Jensen and Professor Richard Sessions who were willing to test out our cases in 

their classes. 

19 
References 

I. Baltzan, P. and Philips, A. 2013, Business Driven Technology, McGraw-Hill. 

2. Friedman, T, L, 2005. The World is Flat. Farrar, Strauss & Giroux, 

3. Gallaugher, J. 20 I I. Information Systems: A Manager's Guide to Harnessing 

Technology. Version 1.3. flatworld Knowledge, 

4. Kroenke, D. M. 2012. Using MIS. 4th ed. Pearson, 

5, Landon, K. C, and Landon, l P. 2012, Management Information Systems. 12'h ed. 

Pearson, 

6. Levinson, M. 2008. The Box: How the Shipping Container Made the World Smaller 

and the World Economy Bigger, Princeton University Press. 

7, Stair, R, and Reynolds, G, 2012, Principles of Information Systems. 10th ed. Cengage 

Learning, 

8. Winkler, R. 2012. "Google Playing with Fire on Patents", Wall Street Journal, June 4'', 

2012, p. Cl 6. 

20 
Appendix A 

Common Topics covered by the Top Five Textbooks and areas where Case Studies with 

Standards themes could be inserted 

X = topic covered, 0 = topic not covered 

Books Examoles of Case Studies 

Topics Baltzan 

and 

Stair and 

Reynolds 

Gallaugher Kroenke Laudon 

and 

Philios Laudon 

Strategy and IS 

- Competitive 

Advantage 

- Value Chain 

X X X X X -How/why are standards a 

source of sustained 

competitive advantage? 

-How do standards such as 

- Pmiers 5 forces 

model 

RFID contribute to the 

value chain? 

-How can standards reduce 

bargaining power of 

Hardware and 

Software 

0 X X X 0 

customers and sunnliers? 

-Compatibility of 

standards. Open Standards. 

Proprietary Standards. 

Programming language 

standards 

Database X X X X X -Standardization of 

designing and 

Data 

Communication 

X X X X X 

imnlementinrc databases. 

-the role of standards in 

Internet communication, 

wireless and cell phone 

communication, 

implications for the global 

market of communication 

eauinment and services 

Business Processes, 

Business Process 

Reengineering and 

Management 

X 0 0 X 0 -standards for documenting 

business processes such as 

BPMN 

Project 

Management, 

System 

Development 

X X 0 0 0 -system development and 

documentation standards, 

enterprise capability and 

quality standards, 

imolications for 

21 
outsourcing 

IS Security & X 

Privacy 

Classifications and X 

Roles 

-B2B,C2C,B2C 

etc 

-Collaborative IS 

-ERP, MRP, CRM 

-KM System, BI, 

Data Mining 

Trending X 

-Cloud computing 

-Service Oriented 

Architecture 

-Social Media IS 

-Mobile payments 

-Outsourcing and 

globalization 

-Wireless 

technology 

X 

X 

X 

X 

0 

X 

X 

X 

X 

Integrated 

with 

topics 

X 

X 

X 

-Security standards -

domestic and international, 

government vs. private 

enterprises, privacy 

standards and nractices 

-eCommerce standards, 

information interchange 

standards for enterprise 

communication and 

transactions 

This is the most exciting 

and upcoming area where 

we are targeting most of 

our efforts. The reason 

being that we are 

increasingly seeing greater 

parts of the books being 

tightly integrated with 

these topics. 

For example integrating 

strategy with cloud 

computing. The topics that 

we identified to be targeted 

in this project will be 

mobile payments, 

globalization, standards 

and competition, and cloud 

comnutin2:. 

22 
AppendixB 

Project Personnel 

Co-PI: Stephen K. Kwan is Professor of Service Science and Management Information 

Systems in the College of Business at San Jose State University, USA. He was the 

founding chair of the MIS department and had served as the Senior Associate Dean of the 

College. He is currently working on the Service Science, Management, Engineering, and 

Design (SSMED) research and academic program at SJSU. He is very active in the 

SSMED community. He works closely with IBM on SSMED and is a recipient ofIBM 

Faculty Awards. He is a member of the American National Standards Institute (ANSI) 

Committee on Education and was the secretariat of The International Cooperation for 

Education about Standardization (ICES). He was credentialed as an industry expert in the 

US Delegation to the APEC 2011 meeting in the US. He had also worked on projects 

with Sun Microsystems, Cisco, Microsoft, HP, the State of California, the US Army, etc. 

His cunent research interests include Global Trade in Services, Service Systems & 

Service Value Networks, and Design Thinking for Service System Innovation. He 

received a B.S. and M.S. in Computer Science from the University of Oregon, and a 

Ph.D. in Management from UCLA. He had published in the areas of Service Science, 

Queueing Systems, Database Management, E-Commerce, Standards Education and 

Standards Policy. 

Co-PI: Nitin Aggarwal is Associate Professor of Business in the department of 

Management Infonnation Systems at San Jose State University. He has published in MIS 

Quarterly, Decision Sciences, IJEC, and Electronic Markets. He has also presented his 

research in a number of national and international conferences such as ICIS, HICSS, and 

AMCIS. He is a member of the Association for Information Systems, the professional 

forum for IS professionals. Dr. Aggarwal is an active researcher in the area of standards 

and standardization. His research includes organizational and governance issues, 

intellectual property issues, transactional issues, and economic issues involved in 

standardization. He received his Ph.D. in Business Administration from Texas Tech 

University. 

Institutional Capabilities 

The undergraduate and graduate degree programs of the College of Business are 

accredited by the AACSB. The Co-PI's will work with the College's Director of 

Assessment and Associate Dean of Undergraduate Programs so that the standard 

assessment methods following AACSB guidelines will be used in this project. The CoPI' swill also be working with the course coordinator ofBUS4 188 and individual 

23 
instructors of the course to try out the case studies, obtain feedback, and assess the 

materials' effectiveness. 

The San Jose State University Research Foundation will administer the project budget. 

24 
Appendix C - List of Cases 

Case l: ls · real or is · SDN? 

by Stephen K. Kwan and Nitin Aggarwal 

Cisco Systems, Inc. had been the bellwether for the telecommunication network industry since it 

was founded in 1984 and went public in 1990. It had been a dominant player in the industry 

providing the infrastructure for the nascent Internet in its early days and had grown into a 

business with $46B in revenue in 2012. It had gone through many iterations of ups and downs in 

the sometimes-turbulent industry and had survived. It recently rebranded its name to Cisco to 

shed some of its reputation as just a "box" company to a "solution" company. Today Cisco has in 

its product lines network routers, switches, wireless infrastructure, software, services, and 

enterprise consulting. 

The later part of 1990's and early part of2000's can be characterized as the era of the Internet 

bubble when wealth was created based on unreasonable exuberant expectations of ecommerce 

engendered by the advent of the Internet. There was great demand for building out the 

telecommunication network in the United States. Unfortunately the promises of quick money 

based on unrealistic business plans and expectations did not materialize and the dot-com bubble 

burst in March 2000. This led to the collapse of many newly started dot-com companies and the 

demand for network expansion ceased. As a result, the telecommunication industry experienced 

fallout that affected both large and small companies. 

During the next few years, Cisco Systems was back in form as it forayed into the consumer 

market by acquiring companies with technology that connect high-speed networks to home 

networks. It also entered the market for delivering high volwne digital contents such as 

teleconferencing and streaming media. 

During this period the telecommunication industry was undergoing a lot of technological 

changes and cost cutting in infrastructure procurement became the mantra of many enterprises 

and government agencies. One of the major technological advances that received industry-wide 

adoption was virtualization. 

Virtualization refers to the creation of one or more guest virtual machines on a host machine that 

is provisioned to operate like a real machine with its operating system and stack components. 

This is done with a combination of hardware and software capabilities in order to maximize the 

host machine's resources as well as minimize the proliferation of physical servers with 

concomitant space, power and environmental requirements. Virtualization has been used with 

mainframe computer systems for quite a while but it has become more popular recently with new 

advances in virtualization software and cloud computing implementation of Software as a 

Service (SaaS), Platform as a Service (Paas), and Infrastructure as a Service (IaaS). 

Along with the virtualization trend the industry was also consolidating its technology along the 

lines of i) increasing speed by reducing latency, and ii) increase flexibility by doing more with 

software. These led to telecommunication products that combine server with router into a single 

25 
machine to reduce the physical distance between circuitry that perform different tasks. The 

attempts to do more with software to increase flexibility led to the development of what is called 

Software Defined Network (SDN). 

The advent of SDN is a natural extension ofvirtualization of servers and other computing 

hardware. The functions of a hardware device that defines and controls a network can be 

instantiated as a virtual machine running in the same environment as other computing functions. 

The SDN can be defined and controlled from the virtual machine as if it were a hardware device 

(which functions are defined by software anyway). This is also made possible by existing 

technology where network control devices are aware of and have access to all network endpoints. The SDN is in essence a virtual overlay on top of existing infrastructure that is laid out by 

hardware devices and connecting cables. 

As with the introduction of most new technology no universal technical standard had been 

established. The existing standards such as TCP /IP and HTTP have been in place and adopted in 

the telecommunication industry for quite a while. These account for the successful proliferation 

of network technology, which inter-operate throughout the world and have made the Internet 

ubiquitous. There are, however, different standards proposed and implemented by vendors of 

SDN who are seeing this as a growth market. Companies such as VMware, HP and IBM are all 

involved in this new market. Many of these companies favor a standard called OpenFlow which 

allow companies to program generic routers and switches to create their own networks. 

Even though the industry understands that standards are needed to achieve interoperability there 

is still fierce competition among the players in setting standards. 

At the 2012 fiscal fourth quarter earnings report conference ca111

3, John Chambers, CEO of Cisco 

was asked about how Cisco competes with other SDN vendors. He indicated that 

" ... We think the future is going to be hardware and software combined. Secondly, we 

saw virtualization coming. We went into it early in 2009, which is exactly when we 

entered the data center. We see ... , OpenFlow type activity being a few years out. We are 

looking at partnerships we can work on." 

During the call other Cisco executives also mentioned Cisco's Open Network Environment 

(ONE) architecture, a program under which Cisco opens part of its network gear operating 

systems to its partners as part of its efforts to counter the threat of SDN. 

On April 8'\ 2013, the Linux Foundation announced in a press release14 the creation of a new 

collaborative project called OpenDayLight.org. Its goal was to create a "New open source 

.framework to drive innovation and acceleration of technologies, allows customers, partners and 

community to shape SDN". The organization's membership reads like a who-is-who of the 

industry that includes Big Switch Networks, Brocade, Cisco, Citrix, Ericsson, IBM, Juniper 

13 http:// a I Ith i ngsd. com/2 0 120815 /I ivebl o ggi ng-ciscos-fo LI rt h-q LI a rte r -res LI Its/ 

Retrieved May 1'', 2013. 

14 http://www. ope nd ayl ight. o rg/ an no LI nee ments/2 013 /04/i ndListry-lea de rs-co I la borateopen da yl igh t -project -don ate-key-technologies retrieved May 1

st

, 2013. 

26 
Networks, Microsoft, NEC, Red Hat, and VMware. The conceptual framework is shown in 

Figure I. 

Nelwork 

applications, user 

on::hestraiion, interfaca 

and services 

('):) := ·., '-......,' , __ " 

\/ Cornroller 

phrlform 

Soulhbound a,;. M :ftt~~~!Tte~• 

inlllrraces & othef .;.:;d;~- 'r'eRdOr:-1Pec1ftc promcol~ '. protoooi1J !ONF, !EYE , .. / '. ' i11t«facet. 

Date plane 

e!ements 1virtual 

switches. physical 

device intarfaoes) 

Figure 1: OpenDayLights's Conceptual Framework ofSDN15 

When asked why his company joined the OpenDayLight.org, an engineering director who 

participated actively said that "Keep your friends close, but your enemies [competitors] closer." 

Preparation of Case Stud~ 

Students should familiarize themselves with the concept ofvirtualization, some of the vendor 

offerings in the market, and real-life examples of SaaS, PaaS, and laaS ( even some they have 

contacts with on a daily basis). 

Case Study Questions 

1. Use the Porter competitive forces model to analyze the current telecommunication 

equipment market with respect to Cisco.com. 

[Instructor Note: SDN is often viewed as a disruptive technology, how does it affect the 

dynamics of the players in the industry?] 

2. Compare and contrast the ONE, OpenFlow and OpenDayLight approaches to the design 

and development of SDN solutions. 

[Instructor Note: these are competing approaches and the industry is searching for 

standard(s). What roles do the non-profit organizations play in this environment?] 

15 http://www.opendaylight.org retrieved May 1st, 2013. 

27 
3. The OpenDayLight.org is a collaborative project in the Apache Foundation, which has a 

strong framework for open source software development. Why do all these big 

companies participate in such "open" projects? Define and explain "openness" in this 

context. What are the pros and cons of open source frameworks for software development 

and open standards for technology interoperability? 

[Instructor Note: Students should have an understanding of "openness" in this context 

because of some common and persistent misunderstanding which created "fear, 

uncertainty and doubt" in the enterprise world. This is a good place to bring in discussion 

of business models of open technology, open API's as well as SDN.] 

4. The students should provide an update of the industry as it relates to the case scenario. 

[lnstmctor Note: The industry is changing fast and it is important to urge the students to 

learn about the environment and the impact of the technology both from the supply and 

demand side.] 

This case study was prepared as a basis for discussion rather than to illustrate either effective or 

ineffective handling of a business scenario and/or leadership/role behavior. This case study 

project was undertaken with the support of a research grant from NIST Measurement Science 

and Engineering, Standards Services Group, and the College of Business at San Jose State 

University. This case study is distributed under the Creative Commons AttributionNonCommerical-ShareAlike (CC BY-NC-SA) license. 

NlSi SAN JOSE STATE 

National Institute of UNIVEl~SITY 

Slandards and Tedmology 

U.S, Deportment of Commerce COLLEGE OF BUSINESS 

28 
If you find electric cars fascinating and wonder why we didn't think of them before, you are in 

for a big surprise. Electric cars are almost 

as old as the traditional gasoline powered 

cars that you see on road today. An 

automobile works on a simple principal. 

An engine converts energy into mechanical 

motion which moves the car forward or in 

reverse. While the basic principal remains 

the same, the source of energy can be 

different. A gasoline car uses an internal 

combustion engine to bum gasoline which 

generates the motion. An electric car uses 

energy stored in the batteries to generate 

motion. 

In late 19th century when electric cars were 

first introduced, they had some of the same 

advantages and disadvantages that electric cars have today. They were quieter, cleaner, and 

easier to drive but lacked charging infrastructure, took a lot of time to charge, and had a very 

limited driving range. Unfortunately, the disadvantages far outweighed the benefits, and we saw 

an increase in the popularity of gasoline engines. Since the early success of the gasoline engines, 

there have been very few opportunities for electric engines to comeback. Every time, there is an 

energy crisis, or an oil shock, electric engines make a comeback. However, the interest is short 

lived and lost as soon as the oil prices stabilize. 

However, things seem to be different now. There is a renewed interest in electric cars and it 

seems like this time it may succeed. For one, this time, major multinational players like Toyota, 

Honda, Ford, General Motors, amongst others, are invested and committed to producing Electric 

Vehicles (EV). Second, manufacturers are developing and introducing, less risky and more 

acceptable, hybrid solutions that are successful in alleviating customers biggest concerns of 

range anxiety. Plug-ins and EVs already constitute 3.3% of overall automobile sales. The federal 

government has also connnitted to replacing some of its ageing fleet with hybrid electric 

vehicles. Finally, there are substantial government incentives for both manufacturers, to build 

electric cars and infrastructure, and for customers, to buy electric cars and to go green. 

For example, President Obama wants one million electric cars on American roads by 2015. To 

support his goal and ineentivize EV manufacturing, the U.S. government is providing billions in 

16 http:// en. wikipedia .org/wiki/H istory _of_ the_ electric_ vehicle 

29 
funding, to car manufacturers, for building all-electric vehicle factories across the United 

States 1

7 

. The government is also providing billions in funding to factories engaged in 

manufacturing EV batteries, motors, and other components. Likewise, to prop up consumer 

interest and demand, the Federal and State Governments are providing tax rebates for consumers 

to buy electric cars incentives like $7,500 federal tax incentive and $2,500 California tax rebate, 

both stackable with each other. All in all, it is said, that by 2019 the US government would have 

invested $7 .5 billion to support and promote use of manufacturing and use of electric cars. 

5 

Mllnufacrurer ar>d 

Mooe! ltll Total 

40.000 

GM Chevroiel Volt 

N!!Vi~-w e!lml· EV 

LE,-\FEV 

Besides commitments from the government and the manufacturers, it seems like, this time; even 

consumers are actively committed to the electric bandwagon. The consumers' interest is 

motivated by the contemporary design of electric cars and their superior performance as 

17 http://www1.eere.energy.gov/vehiclesandfuels/pdfs/1_million_electric_vehicles_rpt.pdf 

30 
compared to gasoline engines. As a matter of fact, consumers consider the electric cars design 

and technology far more superior to their gasoline counterparts. This is evident from the 

consumers' willingness to pay premium for electric cars compared to their equivalent gasoline 

counterparts. Today's electric cars are almost as powerful as their gasoline counterparts and 

boost of similar pickup speeds and driving ranges. For example, Tesla Model Scan go from 0-

60 miles in 5.9 seconds, and drive more than 250 miles, on a single recharge, which is 

comparable to other midsize luxury sedans. 

One of the biggest bottlenecks affecting 

adoption of electric vehicles is the range 

anxiety. Range anxiety refers to the fear 

that the electric car will run out of charge 

before reaching its destination, thereby 

stranding the passenger in the middle of 

nowhere. The problem is the lack of 

electric charging infrastructure. For one, 

electric charging stations are few and far 

between. They are not even a measurable 

fraction of gas stations across the world. 

Second, whatever infrastructure that does 

exist is fragmented by use of proprietary 

charging connectors that exclude 

competing cars to use their network. For 

example, Tesla's proprietary charging 

connector restricts charging stations access 

to Tesla cars only. In other words, unlike 

Gasoline cars that can be refueled at any 

gas station, electric cars have to dock with Figure 3: Gas Statfons dot is. multiple stations} their own kind to recharge. This lack of 

interoperability limits the charging options for the consumers. 

The range that the car can be driven is usually depended on two things: the battery capacity and 

the battery charging infrastructure. If there are few charging stations, you need a higher capacity 

battery because mean time between charging will be high. However, if there are many charging 

stations near you, you can probably settle for a smaller battery because mean time between 

charging can be low. This matters because battery is an expensive component of the cars overall 

cost. Adding 60 miles to Tesla's range-85kWh battery instead of60kWh battery- adds $10,000 

to Tesla's Model S's sticker price. Today there are a variety of cars available with varied battery 

sizes. Hybrids, like Toyota Prius, recharge primarily on engine braking and have a limited 

battery capacity. You can drive them only for a couple of miles before the gasoline engine kicks 

in. This in contrast with electric only vehicles, like Tesla Model S, that has big batteries and can 

go up to 250 miles or more on a single charge. Nonetheless, batteries have a physical capacity 

limitation and the success of electric cars will ultimately depend on the availability of charging 

infrastructure - in home and on road. 

31 
Charging infrastructure includes slow level I AC charging using home power outlets, fast level 2 

charging using modified home/commercial chargers, and commercial DC based superchargers. 

While every car manufactmer provides a standard level I charger that you can plug into any 

power outlet, the process is slow and time consuming. For example, Prins plug in, with a range 

of about 11 miles, takes about 3 hours to charge, and Tesla Model S, with a range of 300 miles, 

takes about 3 days to charge, using a 120-Volt AC power outlet. In other words, a 3,000 mile 

cross country trip, will take about 25 days' just to recharge. To reduce the charging time, bigger 

batteries need bigger chargers. Companies provide higher voltage, higher amperage, level 2 

chargers that can charge the car in much lesser time. These chargers can be installed at home or 

can be found at public charging stations. Then there are DC based superchargers that can 

recharge yom car in less than an hour. Unfortunately, most of these chargers are not compatible 

with each other. That is, if you own a Nissan Leaf and a Tesla Model S, you will have to get 

separate chargers for them and if, while driving, yom charge runs out, you cannot recharge at a 

competing station. Worst, if you buy a new car, even from the same manufactmer, chances are 

that the chargers may not be compatible. 

Charging Type Specifications Standards Details 

Level 1 120v AC/ up to . 11772 Standard in all cars, Uses Home charging 

Charging 16amp /1.92kW / -standard outlets, 

Single Phase Charges up to 5 miles/ hour 

Level2 240V AC/ up to 80 • 11772 Specialized connectors incompatible 

charging amp/ up to 19.2kW • Magne Charge (11773) with other cars, Uses modified home or 

(6.6 kW most . AVCON public charging infrastructure, charges 

common)/Single . Mennekes IDE 62196 up to 70 miles/ hour 

Phase VDE-AR-E 2623-2-2 

DC fast 300-600V DC/ up to • Mennekes IDE 62196 Specialized connectors incompatible 

charging 200 amps/120kW/ VDE-AR-E 2623-2-2 with other cars, uses specialized public 

Three phase . CHAdeMO charging stations, charges up to 340 

. Tesla Super chargers miles/ hour 

. J1772 Combo Coupler . Tab!e 2: levets -

Car charging infrastru.cture is critical to the success of electric car. However, it is also expensive 

to set up. Home setup costs a minimum of $2,000 for each charger and a single super charging 

spot can cost an upwards of$] 00,000.00. It will be extremely difficult for a single company to 

set up a network wide enough to compete with the traditional gas stations. As a result many car 

companies have agreed upon technology standards that allow them to use a compatible 240V 

charging port. This essentially cuts the charging time in half. The standards usually specify the 

physical, electrical, communication, and performance protocols for electric cars and charging 

stations. The problem is there are just too many standards. Two most popular globally accepted 

standards for electric car charging are CHAdeMO, a Japanese standard developed by the Tokyo 

Electric Power Company, Nissan, Mitsubishi, Toyota, and Fuji Heavy Industries, delivers up to 

62.5 kW of high-voltage direct current for quick charging. The second standard, Jl 772, was 

developed by the Society of Automotive Engineers and is preferred by American manufacturers. 

The JI 772 standard is written to accommodate up to 240V 80 Amp charging. 

32 
11772-2009 Chademo plug19 Mennekes J1772 combo plug21 Tesla Plug22 

plug18 plug'° 

Figure tharg:tlig ptugs 

There is a third proprietary charging technology promoted hy Tesla motors that is incompatible 

with all other manufacturers. While Tesla supports JI 772 standard by providing additional 

adapters, they have their own proprietary technology, proprietary plugs, and proprietary stations, 

incompatible with all other car manufacturers. Considering that Tesla is a relatively new player 

in the industry, this doesn't make sense. It will be so much easier, and less risky, for them to 

adopt one of the established standards and piggyback on their infrastructure. However, Tesla is 

adamant on developing its own network. Their reluctance to adopt may in part be explained by 

their need for ultrafast charging, due to their bigger capacity batteries and maintaining their 

image of innovative company breaking the norms. As a result Tesla has introduced super 

chargers that can provide 250 amp 400V 90 kW charging capacity. Existing standards, even 

though comprehensive, have not been tested at such high performance levels. At the same time, 

Tesla provides .Tl 772 adapters to charge at public charging stations delivering AC at 240V 30 A. 

So while maintaining compatibility with public charging stations, Tesla has been trying to gain 

competitive advantage by creating early network effects. More supercharging stations will lead 

to more sales which will help setup more exclusive charging stations. 

Tesla, recently, opened up their patents for anyone to use in good faith. This further indicates 

that Tesla's official position is to continue developing its own technology and even try to make it 

an industry standard. How does this help Tesla? Tesla already provides compatible chargers 

allowing its users to use the vast .Tl 772 and CHAdeMo charging infrastructure. By allowing 

other companies to use their patents for free, they are hoping that other parties will pitch in to 

build support infrastructure, which will benefit Tesla more than any other manufacturer. It will 

also help them gain recognition, sell their high capacity batteries and chargers, and attract 

investment. Whether others will bite is an open question, after all, if Tesla wanted a 

standardized charger, they could have always adopted modified JI 772 combo standard. 

Whether the current momentum will continue or soon disappear depends upon how well 

companies can eliminate range anxiety, which in tum depends on charging infrastructure. 

Companies can cooperate, and standardize on the charging infrastructure, just like gas stations 

that can service any make and model of the car or they can compete and develop independent 

18 http://en.wikipedia.org/wiki/lEC_62196 

19 https://radio.azpm .org/ p/ azspot/2012/5/10/1632-electric-ca rs/ 

20 http://en.wikipedia.org/wiki/lEC_62196 

21 https://radio.azpm.org/ p/azspot/2012/5/10/1632-electric-ca rs/ 

22 http://forum.hybrid-piloten.de/index. php ?topic=3543 .0 

33 
and exclusive eharging networks. Standardization would involve agreeing on eharging standards 

both in terms of hardware and eleetric specifications. Companies can then compete on car 

design and featnres. Standards on the other hand will have to be broad enough to encompass 

varying needs of car manufacturers. For example, superfast charging may not be required for 

cars like Toyota Prins plug-in but may be essential for the success of Tesla Model S. A standard 

should be able service both these needs. 

If companies decide to compete on eharging infrastructnre they can go two different routes. 

They can either join one of the established networks like CHAdeMo or JI 772, or they can do it 

on their own. The advantages of joining a network are that the risk is shared with other 

manufaetnrers, it gives time for company to focus on designing and manufacturing cars instead 

of worrying about setting up an infrastructure, and it enhances the network effects i.e. it increases 

the value of the entire network. The advantages of doing it alone are, if you can pull it off, you 

get to keep all the spoils, which may be substantial. One who controls the standard, controls the 

profits. 

When A TMs were first introduced, every bank tried to create their own proprietary network of 

ATMs across the country. The bank with largest ATM network would attract more customers 

because of their omnipresence. This would also be the sonrce of their competitive advantage. 

However, proprietary networks are expensive to maintain and no longer a sonrce of competitive 

advantage. As a result, banks decided to cooperate and agree on financial transaction standards. 

Car manufaetnrers are in the similar territory when it eomes to creating their owu networks to 

gain competitive advantage. Will they eventually cooperate depends on how long they can 

sustain their competitive advantage from using proprietary technology. 

1. Why did electric cars fail? Why did they never stand a chance vis-a-vis their gasoline 

counterpart? Have we overcome the difficulties and do the electric cars now have a fair 

shot at competing with gasoline cars? 

2. Should the electric car manufacturers cooperate to create a network of electric car 

charging stations and support infrastructnre or should individual manufacturer develop 

their own network? What are the pros and cons of each approach? Why would you 

recommend one over the other? 

3. How can electric car manufactnrers alleviate consumers anxiety related to pnrchase of 

electric cars? Do individual car manufactnrers have the resources and eapabilities to build 

their own infrastruetnre? If not, what approach will you recommend? 

4. Use Porters five forces model to analyze the electric car industry. 

5. Do we really need a universal car charging standardized solution? How can electric 

charger incompatibility be a sonrce of competitive advantage for eleetrie car 

34 
manufacturer? What are the pitfalls in following such strategy9 Is it a recommended 

approach? 

6. Identify two ethical/moral issues that may arise from incompatibility of electric car 

chargers? How should manufacturers address this issue? 

7. What competitive strategy would you recommend electric car manufacturers to compete 

with each other? 

8. Why has Tesla decided to share their patents with all car manufacturers? 

This case study was prepared as a basis for discussion rather than to illustrate either effective 

or ineffective handling of a business scenario and/or leadership/role behavior. This case 

study project was undertaken with the support of a research grant from NIST Measurement 

Science and Engineering, Standards Services Group, and the College of Business at San Jose 

State University. This case study is distributed under the Creative Commons AttributionNonCommerical-ShareAlike (CC BY-NC-SA) license. 

NlSI SAN JOSE STATE 

National lnstllule of UNIVERSITY 

Standards and Tedmology 

U.S. Deportment of Commerce COLLEGE OF BUSINESS 

35 
Case 3: Wireless Payment - Wallet Share 

by Stephen K. Kwan and Nitin Aggarwal 

George would do anything to get rid of his wallet. It is heavy and creates an ugly bulge in his 

pocket. George has been to Japan where he saw 

locals using phones to seamlessly pay for 

everything including tolls, fares, groceries, and 

other expenses. So when Google announced their 

new Nexus 4 phone with the ability to touch and 

pay, George got really excited. 

George was one of the first people to get a mobile 

payment enabled Google Nexus phone and 

promised himself that he would never pick up his 

wallet again. What's more, Google even 

showcased a new vending machine, in San 

Francisco, where George purchased a Coke using 

his new Nexus phone. George was on top of the world and very excited. He actively started 

looking for the universal mobile payment symbol at retailers so that he could plan his wallet-free 

shopping. 

Unfortunately even after owning his phone for a whole year, George is still carrying his wallet. 

Mobile payments are a subset of a larger electronic payments ecosystem, where payments are 

initiated using a mobile device23 • The history of mobile payments dates back to 1997, when 

Coke introduced the first touchless vending machines based on Simple Messaging Service 

(SMS) payments. Initially the system was used 

for simple tasks like downloading ring tones and 

buying movie tickets; payments were billed 

directly to the customer's mobile account. The 

big push came from Asian countries like Japan 

and the Philippines, where commercial mobile 

commerce platforms were launched, and in 

Europe where mobile payments for parking, train 

tickets, and flight bookings were taking form. In 

2002, the European Telecom Standards Institute issued the first guidelines, "Mobile Commerce 

(M-Comm); Requirements for Payment Methods for Mobile Commerce "

24 . However, these 

requirements were minimal and basically laid down only the essential features needed to support 

a mobile payment platform. 

Japan took an early lead in mobile platform adoption. With a highly tech savvy population and 

Internet access via mobile surpassing access via personal computer, combined with early 

23 http://www.kpmglnsiders.com/ pdf /Mobl\e_payments.pdf 

" http://www.etsi.org/ deliver/ etsi_ tr/102000 _102099/102071/01.02 .01_ 60/tr _102071v010201p .pdf 

36 
standardization on NTT DoCoMo' s iMode platfonn, mobile payments experienced rapid 

penetration and access. Moreover, Japan's mobile wallet service was developed in partnership 

with wireless service providers and handset vendors. Mobile wallet features include cashless 

payment, online shopping, ticketing, check-in, banking, digital keys, loyalty cards, and identity 

cards25 . Similar progress has been seen in countries such as South Korea, the Philippines, India, 

and China where mobile payment markets are usually characterized by a duopoly. The winning 

formula in each of these successes has been a mix of partnerships, cooperation between multiple 

entities, and standardization of the payment platform. One of the biggest beneficiaries of mobile 

payment platforms has been countries in Africa where there is limited access to traditional 

banking services. 

Unfortnnately, mobile payment adoption in the United States has not shared the same level of 

success as seen in Asia and Europe. According to the CTIA -the wireless association, in 2012, 

the wireless penetration rate, from devices like phone, hotspot, and tablets, in the United States 

stood at 102%, with 35% of households connecting purely over wireless networks. Yet only 

12% of Americans have used mobile as a form of payment and that has been mostly for paying 

bills, transfen-ing money, or peer-to-peer payments. 

The current size of the United States mobile payment market is $12.8 billion annually, which is 

predicted by the Fon-ester group to grow to $90 billion by 201726 . On tbe other hand, according 

to Gartner, the worldwide mobile payment market is expected to increase from $171 billion in 

2012 to $646 billion in 2017, or possibly even a trillion dollars according to some estimates. In 

other words, the U.S. share of the global payment market is only 14% and expected to remain the 

same over the next 5 years. This is far less than the U.S. share of the world GDP, which is about 

22%. 

United States Rest of the World U.S. Share 

Mobile Payments (2012) $12.8 billion $90 billion 14% 

Mobile Payments (2017) $171 billion $646 billion 14% 

GDP $15 trillion $83 trillion 18.07% 

Ecommerce $23 1 billion $ 1000 billion 23% 

Mobile payment as a 

percenta2e of ecommerce 

5.5% 9.0% -

While desktops are still the dominant mode ofintemet access, mobile devices are projected to 

surpass desktop Internet traffic by 2014. With customers prefen-ing to use mobile devices to do 

their daily chores, the mobile payment market is poised to become even more lucrative. There 

are many stakeholders vying for a share of the mobile payment pie, but the lack of cooperation 

and standardization reflects a general economic principal as stated by Dranove and Gandal: 

"A monopoly in the bush is often worth more than an oligopoly in hand". 

25 http://www.s!ideshare.net/victori98pt/ mobi!e-payments-2788055 26 http:/ /tech crunch .com/2013/01/ 16 /forrester -u-s-m obi !e-paym e nts-market-predicted-to-reach-90b-by-2 0 17 -u p-from-12-8bin-2012/ 

37 
In other words, instead of developing the mobile payment market and competing for a share of 

the pie through standardization and cooperation, the market players have decided to compete for 

the pie. Table 2 below shows the different mobile standards and technologies available to 

consumers. 

Funding 

Source 

Platform Examples Technology Applications 

Bank 

Account, 

Cash, 

Check, 

Prepaid 

reloadable 

cards, 

Money 

Hardwarebased 

solutions 

Near Field 

Communicatio 

11 

Extension of RFID, distances 

restricted to less than 4 

inches. Security enabled 

Google Wallet, 

ISIS, Merchant 

Customer Exchange 

(MCX) 

Radio 

Frequency 

Identification 

Radio transmitters and 

receivers 

PayPass 

SpeedPass 

Low Energy Bluetooth technology Speculated to be 

order Bluetooth used in Apple 

Payment iPhone devices 

MasterCard 

, Visa, 

Discover, 

American 

Express or 

any other 

Credit Card 

Phone bill, 

cable bill, 

Svstem27 (iWallet) 

Near Sound 

Data Transfer 

(NSDT) 

Audio Signal based payment Tagpay 

Trusted 

Execution 

Environment 28 

Secure area residing in main 

processor of a smart phone 

where sensitive data is stored 

In development 

Softwarebased 

solutions 

(Mobile 

Payment 

Closed Loop 

Mobile 

Payments 30 

Proprietary wallet using 

barcodes, 2d or 3d bar codes, 

QR code (akin to gift cards 

in the physical world) 

Starbucks payment 

app 

Cloud-based Payment information is Paypal, Serve, 

or any Platforms mobile stored in the cloud and apps Venmo 

other direct or Mobile payment access the information to 

billing Web 

Payments) 

29 

platform allow payments to be made 

using bar codes, QR codes, 

or the likes 

SMS Text Simple messaging service Donations, 

based payment and In-App purchasing payments, 

In-App Billing Ringtones, In-App 

nurchases 

27 http://www. mo bile paym e ntstod ay. co m/b I og/810 5 /Apple~ using-BI u etooth-for -payments-the-worst-idea 28 http://workshop.etsi.org/2012/201201_SECURITYWORKSH0P/5_MobileWirelessSecurity/GLOBAlPLATFORM_Colas.pdf 29 http://www.sl id es ha re. net/vi eta ri 98pt/ mo bi I e-paym e nts-2 7 880 5 5 

http://www.mobi!epaymentstoday.com/infographic.php?id=2 30 

38 
The potential for super nonnal profits, high fragmentation, and the absence of worldwide 

standards in the mobile payment industry is attracting more players to the market; making the 

market even more fragmented and confusing for retailers as well as customers. Recently, Target 

and Walmart have joined with two dozen other retailers to develop their own mobile payment 

system to compete with Google31 • The retailers feel that a system developed by them would 

foster loyalty and increase their revenues. The retailer's motivation might be very different, 

albeit orthogonal, to the motivations of mobile service providers and handset manufacturers. 

While service providers might be interested in the exchange fee generated each time a 

transaction is processed, retailers might be trying to minimize the exchange fee by owning their 

own payment network. 

With such a range of choices comes customer confusion like that experienced by George. His 

favorite retailers do not subscribe to his service provider's payment system. Moreover, George 

is forced to use Sprint's network because AT&T, T-Mobile, and Verizon do not support 

Google's Wallet. If George wants to switch cellular providers so he can talk for free with his 

friends and family, he will have to start all over again with the competing ISIS services, 

supported by Verizon, T-Mobile, and AT&T. But then again, he may not be able to pay at 

Target or Wal-Mart and may still have to carry his wallet anyways. 

1. What is the fundamental reason George couldn't ditch his wallet? 

2. Verify that the facts, assumptions, and data presented in the case study are still valid and 

applicable? 

3. Using Porter's Competitive Forces Model, evaluate the mobile payment industry. 

4. Using SWOT analysis, evaluate the different payment methods. 

5. Using BCG matrix with predictive market share and predictive growth rate, evaluate the 

feasibility of these mobile technologies. 

6. Draw the transaction flow from a consumer purchase to the supplier of goods/services. 

Who gets a cut of the transaction (i.e., transaction fee) and how much is it? 

7. Mobile payments do not always mean contactless payment. Newer methods like NFC are 

credited with incorporating the best of both the worlds. Compare and contrast the 

different standards of mobile and contaetless payments and highlight the superiority of 

one over the other. 

8. Why has adoption been slow in the United States? 

31 http://online.wsj.com/article/SB 10001424052970204571404577255261085314318. html?mod=djemalertTECH 

39 
9. Why is the Mobile Payment market so fragmented and why are there no clear standards? 

Can there ever be a single standard? 

10. What are the US credit card companies and banks doing to prepare for potentially 

explosive growth in the mobile payment market? What standards are they backing or 

developing9 

11. Can one of these mobile standard become the de-faeto industry standard? Why or why 

not? Provide an example from the technology indnstry. 

Photo Credits: 

1. Costanza Wallet by Kyle MacDonald Licensed under creative commons Attribution 2.0 

available at http://www.flickr.com/photos/kylemacdonald/6202533 8/in/set-1339638/ 

2. Coke Vending Machine: Source http://www.coca-colacompany.com/stories/tapping-intotaste-pay-with-your-phone-at-the-vending-machine 

This case study was prepared as a basis for discussion rather than to illustrate either effective or 

ineffective handling of a business scenario and/or leadership/role behavior. This case study 

project was undertaken with the support of a research grant from NIST Measurement Science 

and Engineering, Standards Services Group, and the College of Business at San Jose State 

University. This case study is distributed under· the Creative Commons AttributionNonCommerical-ShareAlike (CC BY-NC-SA) license. 

NlSI SAN JOSE STATE 

National lnstilure of UNIVERSITY 

Standards cm:! Technology 

U,S, De1,ar1imentofCommerce COLLEGE OF BUSINESS 

40 
Case 4: Incompatible in Mobile Chargers - Need 

based or Strategic? 

by Stephen K. Kwan and Nitin Aggarwal 

Figure 1: Steve Wozniak, Apple's ZO·!iom1de1·s, backpack. !mage Sourrce; Gizmo,fo.i:om 

"Phone chargers to be standardized in 2011 32", read Jim on a fine Sunday afternoon in January 

2011. The news got him excited. He had been waiting for this for so long that he couldn't even 

remember. Jim researched more to confirm and came across several other articles boldly 

claiming the same; "Universal Phone Chargers Coming in 2011: Samsung, Apple, Nokia, RIM 

Commit To MicroUSB Standard33

," "Apple, others agree to universal cell phone charger 

standard in Europe." Jim rejoiced and felt a sigh of relief 

Jim is a Silicon Valley tech professional who, like many others, carries multiple electronic 

devices. Along with personal devices like a smart phone, a tablet, and an e-reader, Jim also 

carries a laptop, a portable hard drive, a personal hotspot, and a small camera. This is typical of 

many average Americans, who according to a recent survey by Sophos34, carry on an average 

three electronic devices, including smart phones, tablets, mp3 players, and e-readers. This 

might not sound a lot, but considering that personal carry on space is extremely limited and 

inconvenient, especially for the travelers, people like Jim pay careful attention to selecting how 

many and what devices to carry, usually based on size, weight, and functionality. For example, 

32 http:/ /h otha rdwa re. co m/N ews/P hones-Chargers-To-Be-Standardize d-1n-2011/ 

33 http://www. h uffi ngto n post. co m/2011/01/03 / u nive rsa 1-p hone-ch a rge rs_ n _ 80 3664. htm I 

34 http:// n a kedsecu rity .sop hos. co m/2013 /03 /14/ devi ces·wozn i a k-i nfogra p h ic/ 

41 
Jim ditched his iPod for the built in MP3 player in his smart phone and is now getting ready to 

dump his portable hard-drive in favor of cloud storage. 

Personal carry on space is not just limited but also extremely saturated. There are already 

devices specialized to handle everything from trading stocks to hiring a cab to measuring how 

many steps we take in a day. It is a market with high barriers to entry. It is not only difficult to 

introduce new products in this domain, but also difficult to change people's habits and make 

them switch. Imagine how difficult it is to convince someone to move their entire music 

collection to a different platform. Manufacturers are mindful of these limitations and compete 

fiercely to bring innovative products to the market - products that are smaller, lighter, and more 

convenient to use. Unfortunately, one thing that gets overlooked, both by consumers and by the 

manufacturers, is that each device needs its own charger. Manufacturers oblige by providing a 

charger, usually, compatible only with the specific device that was sold. That would be jnst fine 

if the consumer was carrying only one device, but unfortunately for people like Jim, who cany 

multiple devices; consumers are forced to carry as many chargers as there are devices. Not just 

that, eve1y time a Jim buys a new phone, he is paying for a new charger as well. This is a 

problem not just for him, but also for the environment. Annually, 51,000 metric tons of 

electronic waste from chargers ends up in landfills just in Europe with worldwide figures 

crossing few hundred thousand metric tons. 

Jim gets frustrated dealing with all these chargers. At home, with family, there were more 

chargers than there were wall sockets, and while traveling, chargers took up lot of space in his 

bag. Every once in a while he forgot one at home rendering his device useless. On several 

occasions he had to buy an expensive replacement costing him a lot of money. His make shift 

solution of dumping all his chargers and buying a , ... universal charger with 10 different tips was as 

frustrating as dealing with the chargers themselves. 

Matching the tips was a pain and the cables would just 

tangle with each other. Moreover, if one tip failed, it 

meant Jim had to replace the entire universal charger. 

Luckily, airports, coffee shops, and few other 

establishments started providing cell charging stations 

at least for the two most popular platforms; Apple and 

Micro USB. While a welcome initiative, it falls short 

of being an ideal solution, considering that there are 

more than 100 different cellular phone mannfacturers35, 

6000 different cell phone models, and over 30 different 

types of chargers in the market36 . It was just one big http:/ /www.amarnn.com/Xcessor-Universal• 

inconvenience. Jim always wondered why mobile Charg sr-BbdcB e rry-Erksson / dp / BDD6 L9 XH H W 

device manufacturers don't standardize on a single 

charger. He strongly believed that the manufacturers should not even include a charger with 

their product. Once the chargers are standardized, a consumer can just buy their own charger 

35 http://www.gsmarena.com/makers.php3 

36 http://www.dailymail.co.uk/news/article-2580597 / All-mobile-phones-EU-charger-EuropeanP a rl ia me nt -votes-law-attempt-cut-electronic-clutter. htm I 

USE 

' -

42 
and it will be compatible with all devices they own even when they upgrade saving hassle and 

keeping tons out of landfills. The benefits were enormous both for the consumers and for the 

environment. 

The long wait was over. At last, it was happening. Jim's wish was coming true. It only took an 

entire European Union to convince the top 14 manufacturers, with a combined market share of 

more than 80% of the market, to agree on a standardized charger for smart phones. Apple, 

Emblaze Mobile, Huawei Technologies, LGE, Motorola, NEC, Nokia, Qualcomm, Research in 

Motion (RIM), Samsung, Sony, Ericsson, TCT Mobile (ALCATEL), Texas Instruments and 

Atmel signed an European Commissions memorandum of understanding, for Micro USB based 

Common External Power Supply specifications, for use with data-enabled mobile phones sold in 

European Union. While the initiative was a far cry from a real world wide universal charger for 

all cellular phones, it was the first step in gaining consensus. 

Three years since signing of MOU, Jim is still canying as many chargers as he was when the 

initiative was first announced. Jim was very disappointed and wondered what happened. First, 

the MOU was only limited to European Union, even though the scope was defined in global 

context, leaving out 93% of the world's population. Second, United States, China, and other 

major countries did not have or were not interested developing a similar mandate officially. 

Third, manufacturers, by themselves, did not have an incentive to consensually agree on a 

universal standard. Fourth, the European Union consensus standards only applied to dataenabled smart phones which had a combined market share of 25%, in 2010, leaving the 

remaining 75% market still unstandardized. Finally, the standard left out other small personal 

carry on devices, like hard drives, MP3 players, GPS, non-smart phones, resulting in, lack of 

interest from manufacturers 37 • According to Stephen Russell, ANEC secretary General, 

"The standard undoubtedly holds some benefits for consumers and the environment. 

But its limited scope is extremely disappointing. Most consumers do not buy dataenabled smartphones and it is hard to understand why buyers of more conventional 

mobile phones will not be able to benefit.fi"om the common charger. We feared this 

might be a consequence of the voluntary agreement reached between the European 

Commission and mobile phone producers in June 2009. ANEC had been seeking a 

more interventionist stance from the Commission. The ambition must now be to include 

all mobile phones and other small consumer multimedia electronic devices within the 

scope of this or similar standards. We will look to the Commission Ji>r action if the 

industry does not make a commitment to do so in the very nearfuture. " 

The consumer organizations criticized the initiative claiming it will stifle innovation, slow down 

research, limit manufacturers' ability to innovate, and limit the functionality of the devices. The 

biggest blow to the effort came when Apple introduced their new proprietary lightening 

connector in 2012 suggesting that they were not interested in honoring their agreement with the 

EU or in cooperating with other manufacturers. To please the European Commission, Apple 

introduced a Micro-USB to lightening adapter sold exclusively in Europe. Ok, thought Jim, so 

why did Apple retract on its own promise and why manufacturers are disinterested in extending 

their cooperation worldwide? 

37 http://www.anec.org/attachments/ANEC-PR-2010-PRL-019.pdf 

43 
Incompatibility exists in almost all industries. For example, printers have proprietary ink; game 

consoles have proprietary games and controllers, and likes. Sometimes incompatibility is due to 

unique requirements of a product, which cannot be addressed by an existing technology, while at 

other times; incompatibility is due to strategic reasons. Sometimes compatibility is required for 

an industry to function properly, for example, agreements on weights and measures, data 

exchange, and language, while at other times compatibility is not required but desired for 

convenience and overall societal good. The decision to maintain compatibility is usually 

dependent on whether companies want to compete in the market or for the market. Question 

then is; is the incompatibility in mobile phone chargers due to unique requirements of the 

manufactures or is it strategic in the sense that it gives them competitive advantage and source of 

additional revenue? 

Unlike parameters like spectrum and networking protocols, chargers have always been viewed as 

an accessory for mobile phones, incompatibility of which is inconsequential to the normal 

operations of the phone3 • This is because the actual charging mechanism is built into the cell 

phone while the charger basically serves as a power adapter which converts 110-220V alternate 

current to 5 -5.SV direct current39 . Thus, at least on the face of it, compatibility may be desired, 

for example, to address Jim's inconvenience and to reduce landfills, but it is definitely not 

required. By this logic, it seems like Apple's incompliance with the European MOU is a 

testament that Apple views their chargers as either technically superior or as a source of 

competitive advantage. 

A Micro USB cable has the capability to charge and sync at the same time. The cable itself is 

relatively cheap because there are thousands of manufacturers churning out millions of them 

simply by following the industry standards. Apple's lightening charger, on the other hand, is 

said to have a proprietary chip that provides additional functionality to the iDevices40. The same 

functionality can be achieved using Micro USB standard and some workarounds, but it looks like 

Apple is not interested in compromises. The proprietary chip ensures that the imitation is 

minimal, and authorized reproduction generates royalties. This allows Apple to charge premium 

on their cables with revenues exceeding 100 million dollars by some estimates41 . The 

proprietary technology also allows Apple to charge huge royalties from third party accessories 

manufacturers bringing in almost $5.5 Billion dollars in 2012, some of which can be directly 

attributed to accessories using lightening connectors. With these kinds ofrevenue, it is highly 

unlikely that Apple will voluntarily adopt Micro USB standards, ever. 

When the industry is deadlocked into competing standards, technological advancements usually 

provides a compatible solution by making the needs obsolete. Wireless charging promised to be 

one such solution. It will revolutionize the mobi_le charging and eliminate the need for having 

charging cables all together. Starbucks has already committed to installing Powermat wireless 

charging stations in its stores all across the United States. Unfortunately, when there are billions 

38 

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/239049/bis13-1164-d i rective-o n-ra di o-e quip me nt -response. pdf 

39 http://sindhu.ece.iisc.ernet.in/ systemslab/ documents/ cellphone_ chargers.pdf 

40 http:// cha rgea 11. com/why-is-a p ple-sti 11-u sing-proprietary-connectors/ 

41 http:// cha rgea 11.com/why-is-apple-sti II-using-proprietary-connectors/ 

44 
of dollars at stake, it is never easy to convince competitors to agree on a technology. Just like 

multiple charging tips, there are multiple wireless charging standards; Powermat from Power 

Matters Alliance (PMA), Qi specification from Wireless Power Consortium (WPC), and Rezence by 

Alliance for Wireless Power (A4WP). And then there is Apple which holds patents and is working on its 

own proprietary wireless charging solution. It looks like there will never be a single mobile charging 

standard. 

Jim is still hopeful. Three years since the original MOU between 14 companies in EU, European 

Commission has voted on an updated Radio Equipment Law42• All mobile devices sold in the 

EU member nations will have to be Micro USB compliant by 2017, including iDevices. Jim 

knows that United States will not follow suit and mandate compliance to the manufacturers. 

However, Jim is hopeful that the manufacturers will see the benefits to the European consumers 

and may extend the courtesy in other countries. Meanwhile, Jim continues to carry his big bag 

full of chargers hoping against all hopes that one day he will not have to carry any. 

Questions 

1. What are the advantages of having a universally compatible charger? What are the 

advantages of having a proprietary charger? 

2. Should there be a universal compatible charger for mobile phones? Discuss the pros and 

cons of each? 

3. Compare and contrast the approach taken by the European Union and the United States in 

creating compatible chargers? 

4. If you were the CEO of Apple, how would you respond to the EU directives? Will you 

extend the compliance outside the European Union? 

This case study was prepared as a basis for discussion rather than to illustrate either effective or 

ineffective handling of a business scenario and/or leadership/role behavior. This case study 

project was undertaken with the support of a research grant from NIST Measurement Science 

and Engineering, Standards Services Group, and the College of Business at San Jose State 

University. This case study is distributed under the Creative Commons AttributionNonCommerical-ShareAlike (CC BY-NC-SA) license. 

NlSI SAN JOSE STATE 

Nation<1! Institute of UN!VERSITY 

Stam:lards and Technology 

U.S. flAnmim,mt cf Commerce COLLEGE OF BUSINESS 

42 https://www .gov .LI k/government/ consLiltations/radio-eq LI ipment-directive-proposal 

45 
Case 5: Apple vs. Sa111sung - Tl1e War f 

the Titans 

by Stephen K. Kwan and Nitin Aggarwal 

Titanomachy, or the War of the Titans, were series of battles, fought over ten years, between the 

ancient Greek gods - the Titans and the Olympians. Both groups wanted the same thing - to be 

the supreme leaders of the Universe. The war was particularly difficult to fight, without either 

side gaining advantage over the other, because both sides were extremely powerful and were 

immortals. The war ended when Olympians got a little help from Cyclopes in form of weapons 

such as the lightning bolt, trident, and invisible helmet. The secret weapons helped Zeus capture 

the Titans bringing the ten years war to an end. The Olympians won, and the Universe was 

divided in between the Olympian brothers and sisters. The takeaway of the story is when there is 

a war between two equals, there needs to be a secret weapon in one parties arsenal to win the 

war. 

While Titanomaehy might be a 

Greek mythology, it is ever so 

reminiscent of the current war 

being played out between Apple 

and Samsung, in the Supreme 

Courthouses, around the world. 

It has only been three years since 

the "war" started and there have 

been only a few battles. There is 

no clear winner and there is a long 

way to go. But the resemblance 

to Titanomachy is uncanny. Both 

Samsung and Apple are fighting 

for world dominance. They are 

both equally power and influential 

multinational companies with a 

combined market share of more 

than 50% in the smartphone and 

tablet markets. They are both Table I: Samsung vs Apple Comparison (2013) 

Samsung A le 

Year 1969 1976 

Industry Semiconductor Computer 

Hardware 

Country South Korea United States 

Emnlovees 90,700 80,300 

Market Cap $186.SB $483.IB 

Sales $208.9B $173.SB 

Profits $27.2B $37B 

Assets $202.8B $225.2B 

Smartphone Market Share 32.3% (319.8 

million units) 

15.5% 

(153.4 

million 

units) 

U.S. patents held (2012)4 

·' 47,855 4,649 

Tablet Market Share 19.1%(37.4 

million units) 

36% (70.4 

million 

units) 

Rank in Worlds Most 

Valuable Brands 

9 1 

Rank in Global Forbes 

List 

22 15 

Fortune-SO companies and sized 

similarly in terms of Sales, Assets, and number of Employees. Both entities have thousands of 

US and international patents in their arsenals to help them fight the war for dominance. 

43 http://www.statista.com/ statistics/2 78 790 /number -of-us-patents-he/ d-by-tech-co m pan ies/ 

46 
The current war between Apple and Samsung is the most interesting and ongoing of all 

smartphone patent wars being fought between Apple, Sony, Google, Samsung, Microsoft, Nokia, 

Motorola, and HTC44. 

The introduction of 

the iPhone in 2007 

jolted the entire 

cellular phone 

industry and 

threatened the 

incumbents like 

Nokia, Motorola, 

Samsung, and RlM. 

Nokia's global cell 

phone market share 

fell down from 3 7%, 

in 2007, to less than 

10% in 2014. 

Motorola mobility 

division got sold to 

Google in 20 I I and 

then again to Lenovo 

in 2012 for a huge 

loss. Facing intense competition and falling market share, it was clear to the incumbents, that the 

only way to block the growth of the iPhone, or at least making money of its popularity, was by 

using its patents to block Apple. This started the global smartphones patent war in 2009 when 

Nokia sued Apple for breach of ten of its essential patents related to GSM, 3G, wireless, security, 

and encryption 4

5

. Within three months, Apple countersued claiming infringement of thirteen of 

its own patents. The original lawsuit was followed by many other suits and countersuits in the 

following months. Since there were no workarounds Nokia's essential patents, Apple settled the 

case by agreeing to pay more than $700 million upfront in fines and licensing Nokia's 

technology for the future. In this case Apple used its patents, and countersuit, as a bargaining 

chip to reduce the damage inflicted by Nokia. The number of patents infringed by each party 

makes little difference when essential patents are involved because you cannot work around 

them and a single infringement is enough to get an injunction. The only way to minimize 

damage is if you hold equally potent bargaining chip. 

Fig 1: Patent Snites (PC Mag: Smartphone Patents War 

Explained)° 

44 http;// en. wikipedia.org/wlki/Smartphone_patent_ wars 45 http://appleinsider.com/a rticles/09/10/22/ nokia _sues_ apple_ over _iphones _use_ of _patented_ wireless _standards.html 

47 
In the following years many complaints, lawsuits, and countersuits were filed, by each player 

affiliated to the telecom industry, against each other many times over. For example, Apple sued 

HTC for infringing ten of its patents, HTC countersued Apple for inflinging five of its patents, 

Microsoft filed an ITC complaint against Apple and Motorola, Motorola returned the favor, 

Motorola sued Apple, Apple countersued Motorola, Motorola sued Microsoft, Microsoft 

countersued Motorola, Apple sued Samsung, and Samsung countersues Apple. The list goes on. 

As expected many of these cases were settled with royalty payments, licensing or cross-licensing 

agreements, or penalties but not necessarily with the outcomes that the incumbent originally 

intended. 

However, distinct amongst these lawsuits are Apple and Samsung lawsuit, which started in 2011. 

The scale of their clash is unprecedented primarily because of popularity of both their products 

and because of similarity between them. It spans ten countries, including the US, Korea, Japan, 

Gennany, the U.K., France, Italy, Spain, Australia, and the Netherlands, in four different 

continents46, with no end in sight. It is costing both companies billions of dollars in legal costs 

and lost opportunities. However, stakes are equally lucrative - monopoly worth $330 billion a 

year in the smartphone market. Nothing but a total injunction will satisfy the either company. In 

his biography, Steve Jobs says, "I will spend my last dying breath ifI need to, and I will spend 

every penny of Apple's $40 billion in the bank, to right this wrong,", "'I'm going to destroy 

Android, because it's a stolen product. I'm willing to go thennonuclear war on this." 

Samsung is the only company that has the potential to compete with Apple and vice versa. 

Usually it only takes one essential patent infringement to legally prevent the other party from 

carrying on their business. However, with companies like Apple, Microsoft, Motorola, Nokia, 

HTC, and Samsung, each of which has a portfolio of thousands of patents, it is easy to imagine 

how they can cross infringe on each other's patents. As a matter of fact, when Apple first 

expressed their intentions to sue Samsung on their Galaxy phones, Samsung did not even have to 

look at their patent portfolio to suggest that they will be counter suing 4

. 

Apple has generally found sympathy with the US jury and the courts. The first US trial verdict 

resulted in Apple being awarded almost a billion dollars in damages and a temporary injunction 

against Samsung Galaxy Nexus. Likewise, the second US trial resulted in Apple being awarded 

$119.6 million for two of its patents infringed and Samsung being awarded $158,400 for one of 

its patents infringed. Things are a different in the South Korean Courts where the verdict was 

neutral. The courts in South Korea found that Apple and Samsung both infringed each other's 

patents and ordered them to pay damages rnnning into tens of thousands to each other. Likewise, 

Australian, Dutch, and Gennan courts initially awarded Apple injunction against selected 

Samsung products, the higher courts later reversed the rulings. 

46 http://www. vanityfai r .com/busi ness/2014/06/apple-samsung-smartphone-patent-war 

48 
As is evident from all the cases, Apple might be the Olympian in this war, when it comes to the 

legal system, but it has failed to capture the Titan (Samsung) of this war. Even though, Apple 

has found some success in the legal systems of many countries, it has failed to get injunction 

against any of Samsung's products. Meanwhile Samsung's phones and tablets continue to grow 

in popularity and enjoy a much bigger market share than Apple due to their lower costs. If we 

look carefully there is no clear winner in the entire patents war that started in 2009. 

However, there is a great deal of learning for the companies engaged in this patents war. 

Companies have realized the importance of having a strong patent portfolio; not just for 

protecting their intellectual property but also for defending it from external threats. A single 

essential patent can change the balance of power between litigants. As a result, during the time 

period, 2007 onwards, we have seen a lot of consolidation, mergers, and acquisitions specifically 

for the target company's patent portfolio. For example, HTC purchased S3 graphics for its 235 

patents, Google acquired I 029 patents from IBM, and Google also acquired Motorola for $12.5 

billion again for their patents. They believe that eighteen of the Motorola's patents can be used 

in their defense or for countersuit against Apple and Microsoft for patents. Likewise, a 

consortium of companies, with members like Apple, Microsoft, RIM, Sony, bought over 6000 

patents from Nortel for $4.5 billion. Surprisingly, Google was left out from the consortium. 

I. Why is it important for companies to have a patent portfolio? 

2. Why will be the Apple vs. Samsung a long drawn war with no wim1er? 

3. What is the potential solution for Apple vs. Samsung lawsuit? 

4. If there are no clear winners in the patent wars of equals, why do companies still spend millions 

of dollars to fight it? 

5. Describe Samsung's strategy to gain market share7 

This case study was prepared as a basis for discussion rather than to illustrate either effective or 

ineffective handling of a business scenario and/or leadership/role behavior. This case study project was 

undertaken with the support of a research grant from NIST Measurement Science and Engineering, 

Standards Services Group, and the College of Business at San Jose State University. This case study is 

distributed under the Creative Commons Attribution-NonCommerical-ShareAlike (CC BY-NC-SA) 

license. 

NlSI 

National lnstit"m af 

SAN JOSE STATE 

UNIVERSITY 

Standards and Tech,1olo91y 

U.S. Deportment of Commerce COLLEGE OF BUSINESS 

49 
Case 6: E-books-Not all are created equal! 

By Patricia Frank 

Introduction 

Lester completed his master's degree and obtained a position in 

a pubic library. He is aware that print books are still the most 

popular medium for books, but he is also aware that consumer 

spending one-books rose to 14% in 2013, a one percent increase 

over 2012. Lester has been told that a number oflibrary patrons 

have been asking to borrow e-books, and he expects demand for 

e-books to grow over the next few years. He also believes that 

adding e-books to the library's offerings could attract new 

library patrons. Therefore, he was pleased to learn that the 

library had recently obtained funds to expand their services by 

acquiring both e-books and e-readers for patrons to borrow. 

Lester's first major project since being hired is to make 

recommendations for both e-books and e-book devices to the Library Director. Before he could 

do that, he decided to learn more about e-book publishing formats and the technology that could 

be used to read the electronic publications. He quickly learned that the e-book marketplaceproducts, platfonns, pricing models, and vendors-change constantly. 

E-book Formats 

Lester, like most people, was familiar with one format that could be used to provide access to 

digitized print materials, PDF. But PDF wasn't intended to create e-books. This file type 

presents a page as captured so that the viewer does not need the original software in which the 

page was created to see the page as was originally intended. When viewing PDF files, although 

the view of the page might be increased or decreased using the zoom feature, the amount of text 

on each page remains the same; it is not possible to change the size of the fonts themselves and 

therefore there is no 'pagination' (automatic page-breaking decisions). This is just one reason 

PDF is not considered a valid e-book format and is not distributed through bookstores like 

Amazon and Barnes & Noble. 

Lester then explored dedicated e-publishing file types and learned that not all e-book file types 

could be read on all e-readers. He prepared the following table of e-books readers, file formats, 

file extensions, and e-reader devices. The table is not exhaustive, and it contains both current and 

discontinued formats, but he believes the information that is included will be useful for his 

project and illustrate some of the challenges to be met when selecting e-book formats to support. 

In spite of the fact that he does not consider PDF the best choice for e-books, he includes a 

50 
description in this table because he knows his library director will want this file format included 

in his report. 

E-book File Format and Description 

Extension 

Amazon Kindle AZW is the Amazon Kindle eBook File Format, a custom format for 

File format: Amazon the Amazon Kindle e-reader device. Amazon offers free Kindle 

Kindle File Format reading apps for Windows and MAC PCs, as well as popular tablets 

File extension: .AZW and smartphones. This file format can be opened with Amazon's 

free Kindle Cloud Reader from any web browser on any platform. 

Two additional e-book viewing options are Amazon's Kindle 

Previewer and Calibre. The Kindle Previewer is a graphical user 

interface tool that emulates how books display across Kindle 

devices and apps, used by publishers who wish to preview the 

layout of an e-book to be sure it displays properly before submitting 

for sale as Kindle books. And Calibre is an e-book management 

application developed bye-book users that contains numerous 

features including a comprehensive e-book viewer, e-book 

conversion, and an e-book editor for the major e-book formats. 

Broadband eBooks The .LRF and .LRX file extensions represent e-books published using 

(BBeB) Sony Corporation's proprietary digital book format, Broadband 

File Format: Sony Media eBooks (BBeB). As of July 2010, SONY abandoned the use of this file 

File extension: .LRF; .LRX format in favor of the EPUB e-book format. Some reader software, 

including Calibre, can read and convert this file format to a more 

widely used format . 

EPUB . EPUB is known as the 'universal' e-book format, is an open 

File Format: IDPF/EPUB standard fore-books created by the International Digital Publishing 

File extension: .EPUB Forum (IDPF). Because it is a vendor-independent XML-based 

format, most ebook devices, including the Apple iPad, B&N Nook 

and the Koba eReader, can open this file type. This file type can be 

opened on a computer using a number of free programs, including 

Calibre, Adobe Digital Editions, Stanza Desktop, Mobipocket Reader 

Desktop, and Okular. Firefox offers an Add-on, EPUBReader, to 

allow an EPUB file to be opened in a browser window just like any 

other document, and iPhone and Android apps also exist to allow 

viewing of EPUB files. Before using on Amazon's Kindle, this file type 

will need to be converted. 

EREADER (formerly Palm eReader is a freeware program for viewing Palm Digital Media 

Digital Media/Peanut electronic books, which use the pdb format used by Palm 

Press) applications. Versions are available for iPhone, Android, BlackBerry, 

File Format: Windows Mobile Pocket PC/Smartphone, desktop Windows and 

File extension: .PDB Macs. 

iBook (Apple) The .ibooks format is a proprietary format based on the EPUB 

File Format: iBook standard with some differences in the CSS tags used, making it 

File extension: .ibooks incompatible with the EPUB open standard. A publisher using the 

.ibooks format must distribute their works for free or for a fee only 

51 
through Apple (Apple iBooks store). However, the books can be 

converted to another format for sale through other venues. The 

software supports export to Plain text and PDF. 

MobiPocket Reader This file type was originally created by a French eBook company 

File Format: Mobipocket called Mo bi pocket and was distributed as a free software 

File extension: .mobi application for multiple devices including PDAs (personal digital 

assistants), smartphones and tablet devices. The company was 

purchased in 2005 by Amazon in 2005 and the support for the .mobi 

file extension was officially discontinued in 2011 in favor of the AZW 

format. This file type can be read by Amazon Kindle, Apple IBooks 

and the Mobipocket Reader Desktop. Two other free programs that 

can open MOBI files are Calibre and Stanza Desktop. 

Plucker Plucker is an open source free mobile and desktop e-book reader 

File Formot: Plucker application for Palm OS based devices, Pocket PC, and other 

File extension: .PDB cellphones and PDAs. It has its own associated file format and 

software to automatically generate Plucker files from text, PDF, 

HTML, or other document file formats, websites, or RSS feeds. Ebooks in this file format could have been downloaded from the 

Plucker website and sites like Project Gutenberg and 

Manybooks.net. A visit to the Project Gutenberg website, which 

offers 45,263 free e-books, revealed that the most popular work, 

Pride and Prejudice by Jane Austin, could be read online as an HTML 

document or downloaded in the following file formats: EPUB (no 

images), Kindle (no Images), PDF, and Plain Text UTF-8. 

Portable Document The Portable Document Format (PDF) was invented by Adobe 

Format Systems and is now an open standard, ISO 32000, for electronic 

File format: Portable document exchange maintained by the International Organization 

Document Format for Standardization (ISO). Documents converted to the PDF file 

File extension: .pdf format can be viewed and printed by anyone using the free Adobe 

Reader software, Adobe Reader mobile app, or readers provided by 

third-party vendors, such as the Foxit Reader. The PDF open 

standard is the foundation for special-purpose PDF standards such 

as PDF/A for archiving and PDF/UA for accessibility. PDF is a 

"document" format and not an e-book file format. 

e-Books and Publishers 

Lester also has to consider the types of e-books his library patrons desire to borrow and the 

publishers that provide those e-books. Trade publishers, who view their primary market to be 

retail sales to individuals through bricks and motor or online booksellers, are trying to develop 

financially sustainable business models for both print books and e-books. They face economic 

threats posed by library e-book lending programs to their profits and the royalties of their 

authors. They are also faced with distribution challenges presented by the access control wielded 

by the small number of e-reader platforms like Amazon Kindle and Apple iPhone/iPad, the 

danger of piracy, and government investigations into pricing models and anti-competitive 

52 
practices. A recent settlement of a conspiracy charge against five e-book publishers by the 

Minnesota State Attorneys General; resulted in an automatic refund of$48.01 for one nonMinnesota resident as shown in figure 1 and underscores the reality of this type of threat. 

I No 

kc·P:r1;~-t1cn', , 

rHi:·.· E,. /i:: Hr:cr- <.>rrJu--crLt. ;, 

$4/Wl 

P.12,Y PATHIOA FF'.J\HKS MP .. SeuY_ V--..-x. TG THE 

' ORDER ' Void After Maren 11. 2015 

Of 

~)ei:dem':-'nt ;i,\) f:sj.J,·i;bc,r· S,N6.1 ::1-BTB~A) 

Th1s1

, Uf(:n: rbu.:f, 1 i'(Tc ·settier-n::.0

nLS rt!a,:.n,;;<:i v!/11.n pun/1:-,tier~ Hdcfiel:.b:. r10rpc.'.r(o!iins. Simon l: Sd,u'ccLC:' 5vb.n.:n:ti<;,;r1 JnC 

,-,1:!ng:.Y, h CJl"if\H·.'ST ,:vr:;Jir; flied h}' i'lE' '-lt1tc .~t1w,1-t:j•.•, G~ncr;:;.! ;;nc { llJS"'i Piuint1ffs nbnur H1c fJPCC' ;/ e:cnn::in,c ;,r:<ik:\ 

:E~brnJh' F(,r :·:v;re :nfr1nnatif1r) nle·;i•;,=· ·:h>il ti·1a:.· S,:,;:s if''1ierils <JVAt:sire. ,'/N </ r::11,:}ok.i\GS0uiernenr~, cnn-1 Ot r:?.il 1-866-62:1 /j] S:?, 

Figure- 3: Refund for overcharge of 2-bo-oks pun::h?.sed from the publi1h~rs l!st0d on the bottom of the image, 

The five publishers named in the class action lawsuit denied any wrong doing but agreed to settle 

to avoid the cost and risk of a trial. Because of concerns such as these, publishers are cautions 

about offering e-books. 

E-book Distributors 

Next Lester decided to investigate the ways in which other libraries approached the issue of 

acqui1ing e-books and providing access to patrons. 

The US e-book retail market 

Lester is a long-time Amazon customer who downloads new e-books for recreational reading to 

his iPad, Kindle, and iPhone. He is aware that Amazon dominates the e-book market. The latest 

Consumer Attitudes Toward Ebook Reading released by BISG in 2013 reported that 51.3% of 

respondents purchase their e-books from the Amazon.com website, followed by 15.7% 

downloading e-books with an Amazon app. This gives Amazon 67% of the North American ebook market, followed by the Barnes & Noble Nook (both App and website) at 11.8%, and 

53 
Apple iBooks/iTunes at 8.2%. Other was listed as 12.8% of the market, and this is where Kobo, 

Goggle, and SONY are to be found. 

As a result of this market dominance by Amazon, Sony has announced that it is closing its US Reader 

store, and it has stopped introducing new e-readers to the US market. Kobo, named by SONY as the 

source of e-books for its former US customers, has stopped investing in the US market and closed its 

Chicago office. Barnes and Noble has reduced funding for its Nook by 74% and has no clear digital 

future. With Amazon the clear leader in the North American e-book market, the firm will be able 

to influence e-book pricing and "shelf-space" for new authors. This vendor must be considered 

when developing library e-book collections. While it is tempting to simply recommend Amazon 

e-books to his library director, Lester knows there is more to learn. For example, Apple fans may 

prefer to use the iBooks app on their favorite Apple device and read e-books purchased from 

Apple's iBooks store. 

The US e-book library market segment 

Lester knew that libraries own their print books outright, but that is not the case with digital 

works. Libraries must negotiate licensing deals for each book they want to lend. The collections 

are stored on servers run by computer firms, such as OverDrive and 3M, that typically charge an 

annual fee plus a fee for each book. In the US, three-quarters of public libraries lend e-books, 

but each of the big six publishers have different policies. For example, HarperCollins's e-books 

expire after they have been lent 26 times, and Penguin is conducting a pilot e-lending program 

with licenses for its books that expire after one year. 

Lester was pleased to learn that OverDrive (http://www.overdrive.com/) has had success in the 

library market by imposing license terms and conditions that establish the policy parameters for 

how libraries make e-books available, including loan regulations and bonower eligibility. 

OverDrive is a Cleveland-based provider of technology for managing and distributing digital 

content for lending libraries. It dominates the US public library market by serving over 90% of 

the 16,400 US public libraries, with a 99% renewal rate in that segment. Its business model is to 

be the most comprehensive supplier of digital material-e-books, audio books, educational 

materials, streaming video-for the most comprehensive collection of digital gadgets-iPads, 

smartphones, e-readers, and more. It also has a direct integration with Amazon, so library 

patrons can bo1Tow an e-book directly to their Kindles. 

Libraries can pool their resources to take advantage of the services provided by OverDrive. For 

example, a Four County Library System based in the Southern Tier of New York State is 

comprised of 43 separate libraries that provide members' access to over 1,100 e-books using 

Over Drive Read, a new in-browser e-book reader. Patrons can usc any computer, tablet, or 

mobile device using the web browsers and platforms shown in table 2. 

54 
Browser Platform 

Chrome Android, iOS, Mac OSX+, Windows XP, Vista, 7, and 8, Linux 

Firefox Android, Mac OSX+, Windows XP, Vista, 7, and 8, Linus 

Safari iOS, Mac OSX+, Windows XP, Vista, 7, and 8 

Android Browser Android phones and tabiets (v2.3+) 

Internet Explorer 10 Windows 7+ 

Internet Explorer 7, 8, or 9 Windows XP, Vista, and 7 

Kindle Silk Kindle Fire and Fire HD 

NOOK Browser NOOK Color, Tablet, HD, and HD+ 

To bring excitement and awareness to the e-book library offerings, the OverDrive Digital 

Bookmobile, a 74-foot, 18-wheel tractor-trailer (Figure 2), takes to the road to work with 

representatives of the host library or school to show community members how to search, sample, 

borrow and return titles either on their own devices or on a number of tablets, computers, and 

smartphones available to demo on the Digital Bookmobile. 

Competing with OverDrive is not easy because of its early entry into the market and 

overwhelming market share. But there are two competitors of note. The first is Baker & Taylor 

Axis 360, a legacy supplier of physical books to libraries that has gotten into the digital material 

business. One differentiating feature touted by Baker & Taylor Axis 360 is that Axis 360 is the 

only application currently capable of providing full and equal access to e-books being loaned by 

libraries to blind and print-disabled patrons. The second is 3M Cloud Library. 3M is hoping to 

take advantage of what they see is a technology gap by promoting the elegance and simplicity of 

the 3M app to browse, borrow, and read fiction and non-fiction e-books from public libraries. 

Patrons will need a library card to use the 3M Cloud Library App, and the library to which the 

patron belongs will need a subscription to the 3M Library service. While smaller libraries in the 

Four Library System took advantage of the services provided by OverDrive, at least one very 

large library, the New York Public Library, subscribes to the 3CM Cloud Library. 

Access to Digital Materials other than e-books 

Although Lester now understands e-book publication file formats, extensions, e-reader software 

and e-reader devices, as well as the publishing and distribution channels and challenges, he 

wants to. study one more issue before making a decision-the needs of his patrons. E-books are 

not the only digital files they access. Based on a recent survey he located\ he learned that 

respondents had a stronger preference for digital in 10 of 14 categories. They preferred print 

books for cookbooks, comics/graphic novels, travel books, and how-to guides/manuals. Of the 

ten genres preferred in e-book format, romance/erotic fiction was closely followed by 

mystery/thriller fiction, and general fiction. The remaining genres requested most often in digital 

format were religious fiction, young adult fiction, biography/autobiography, science 

fiction/fantasy, literary fiction, business/finance, and history/politics/social sciences. This 

information would be helpful in determining the genres of books that would best be provided in 

55 
electronic format. But Lester was also determined to learn more about the preferences of the 

members of his community, both current library users and potential users and set about 

developing his own survey. 

Photo Credit: 

1. Holbeach e-book marker [old photo] by Paul Stainthorp Licensed under creative commons Attribution 2.0 

available at https://www.flickr.com/photos/pstainthorp/5395846994 

Case Study Questions 

1. What barriers exist to libraries as they consider investing in e-books? Explain how this will 

impact their collection policy. 

2. Using Porter's Competitive Forces Model, evaluate thee-book industry. If it makes a 

difference in analyzing the bargaining power of buyers or suppliers, state which of the 4 

viewpoints Amazon Kindle I Apple iBooks I OverDrive I 3M Cloud from the homework 

assignment you are using to view the industry. 

3. Compare the four perspectives to e-books that your team looked at in the homework 

assignment. Compare and contrast - which do you think is a superior device? Superior Ebook format? Superior subscription service for libraries? What specific recommendation 

would you make to Lester related to providing access to e-books and devices to be made 

available through the library. 

4. Why is the eBook market fragmented, and why are there no clear standards? Can there ever 

be a single standard? If you conclude that there is an emerging standard, argue what it is. 

This case study was prepared as a basis for discussion rather than to illustrate either effective or 

ineffective handling of a business scenario and/or leadership/role behavior. This case study 

project was undertaken with the support of a research grant from NIST Measurement Science 

and Engineering, Standards Services Group, and the College of Business at San Jose State 

University. This case study is distributed under the Creative Commons AttributionNonCommerical-ShareAlike (CC BY-NC-SA) license. 

Nt.51 SAN JOSE STATE 

National Institute of UNIVERSITY 

!imr,clarcls and Tech.,.~logy 

U,5, Department of Commerce COLLEGE OF BUSINESS 

56 
e-Book Take-Home Quiz - Option A (Amazon Kindle perspective) 

Answer each of the following questions and upload to Canvas: 

1. One popular eBook provider is AMAZON. Kindle eBooks can be through the AMAZON.com 

website. Describe the advantages and disadvantages of purchasing Kindle eBooks from 

AMAZON. 

2. Discuss the hardware, software, and (current) vendor dependencies of this product. At a 

minimum, you should address the following points: 

What AMAZON devices can be used to read Kindle eBooks in their native format? Can the 

eBooks be downloaded in their native format to devices manufactured by other vendors? If so, 

which ones? Can those file types be converted for use on other devices? 

3. How does AMAZON monetize profit from Kindle eBooks? 

4. Using Porter's five-forces model, (a) what are the threats of substitute products or services, and 

(b) what is the threat of new entrants. 

5. What factors contributed to AMAZON's ability to secure a 67% share of the US e-book retail 

market? 

Bonus Question (2 parts): 

A) Compare and contrast the Amazon Kindle products. Then make a recommendation for a 38-year 

old individual who enjoys reading mysteries, will subscribe an electronic version of The 

Economist, and wishes to renew a subscription to The Woll Street Journal in electronic format. 

Provide your rationale. 

B) Consider your recommendation in part A. Would you make a similar recommendation to Lester 

who will supply e-books and other digital materials as well as loan out e-reader devices to 

patrons? If not, which Amazon Kindle device do you recommend? Provide your rationale. 

Some Sources to Consider: 

(Please also look for other sources.) 

http://www.a ma zon. com/ gp/ prod uct/B00?H CCNJ U / ref=to pn av_ storeta b _ ksto re 

http://www.amazon.com/Kindle-eBooks/b?ie=UTF8&node=154606011 

http ://best-kind le-com pa riso n-review. topte n reviews .com/ 

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e-Book Take-Home Quiz - Option B (Apple iBooks Perspectivej 

Answer each of the following questions and upload to Canvas: 

1. One eBook provider trying to chip away at Amazon Kindle's market share fore-books is 

Apple with its iBooks app and iBooks store. If you are an Apple fan, you can purchase iBooks 

from the Apple iBooks website. Describe the advantages and disadvantages of purchasing 

Apple iBooks. 

2. Discuss the hardware, software, and (current) vendor dependencies of this product. At a 

minimum, you should address the following points: 

What Apple devices can be used to read iBooks in their native format? Can the iBooks be 

downloaded in their native format to devices manufactured by other vendors? If so, which 

ones? Can those file types be converted for use on other devices? 

3. How does Apple monetize profit from Apple iBooks? 

4. Using Porter's five-forces model, (a) what are the threats of substitute products or services, 

and (b) what is the threat of new entrants. 

5. What factors will contribute to Apple's success or failure in competing with Amazon. 

Bonus Question (2 parts): 

A. Compare and contrast the Apple products that can display iBooks. Then make a 

recommendation for a 38-year old individual who enjoys reading mysteries, will subscribe 

an electronic version of The Economist, and wishes to renew a subscription to The Wall 

Street Journal in electronic format. Provide your rationale. 

8. Consider your recommendation in part A. Would you make a similar recommendation to 

Lester who will supply e-books and other digital materials as well as loan out e-reader 

devices to patrons? If not, what Apple products do you recommend? Provide your 

rationale. 

Some Sources to Consider: 

(Please also look for other sources.) 

http://www.apple.com/ibooks/ 

https://itu nes.apple.com/us/ a pp/ibooks/id364709193 

http ://ipod. about. com/ od/ipho nee boo ka pps/fr /iboo ks-a pp-review. htm 

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e-Book Take-Home Quiz - Option C {OverDrive Perspective) 

Answer each of the following questions and upload to Canvas: 

1. In the library e-book market, OverDrive has the largest market segment. Describe the 

advantages and disadvantages for a library to enter into an agreement with OverDrive to 

provide e-books to its patrons. 

2. Discuss the hardware, software, and (current) vendor dependencies of this product. At a 

minimum, you should address the following points: 

a. What file formats are used for thee-books? What devices can be used to read the 

books in the formats provided? Can those file types be converted for use on other 

devices? 

3. How does OverrDrive monetize profit from their e-books services? 

4. Using Porter's five-forces model, (a) what are the threats of substitute products or services, 

and (b) what is the threat of new entrants. 

5. What factors contributed to OverDrive's ability to secure a 90% share of the US e-book 

library market? 

Bonus Question (2 parts): 

C. Consider the services of OverDrive for library patrons. Would a 38-year old individual who 

enjoys reading mysteries, will subscribe an electronic version of The Economist, and wishes 

to renew a subscription to The Wall Street Journol in electronic format be satisfied with the 

offerings? Provide your rationale. 

D. Provide two examples of libraries that utilize OverDrive's library services. Describe the 

community in which the library resides as far as size of population, education level, income 

level, and other distinguishing features. Then cite two services that OverDrive provides that 

fits the needs of this community. 

Some Sources to Consider: 

(Please also look for other sources.) 

http://www.overdrive.com/ 

http://digitalbookmobile.com/ 

https:/ / overdrive.desk.com/#devices 

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e-Book Take-Home Quiz - Option D (3M Cloud Perspective) 

Answer each of the following questions and upload to Canvas: 

1. One eBook provider trying to chip away at OverDrive's library segment market share is 3M 

Cloud. Describe the advantages and disadvantages of entering into an agreement with 3M 

Cloud. 

2. Discuss the hardware, software, and (current) vendor dependencies of this product. At a 

minimum, you should address the following points: 

a. What file formats are used for thee-books? What devices can be used to read the 

books in the formats provided? Can those file types be converted for use on other 

devices? 

3. How does 3M Cloud monetize profit from their e-books services? 

4. Using Porter's five-forces model, (a) what are the threats of substitute products or services, 

and (b) what is the threat of new entrants. 

5. What factors will contribute to 3M Cloud's success or failure in competing with OverDrive. 

Bonus Question (2 parts): 

E. Consider the services of 3M Cloud for library patrons. Would a 38-year old individual who 

enjoys reading mysteries, will subscribe an electronic version of The Economist, and wishes 

to renew a subscription to The Wall Street Journal in electronic format be satisfied with the 

offerings? Provide your rationale. 

F. Provide two examples of libraries that utilize 3M Cloud's library services. Describe the 

community in which the library resides as far as size of population, education level, income 

level, and other distinguishing features. Then cite two services that 3M Cloud provides that 

fits the needs of this community. 

Some Sources to Consider: 

(Please also look for other sources.] 

http:/ /www.3m.com/us/library /eBook/ 

http:// solutions. 3 m. co m/wps/ po rta 1/3 M/ en_ U 5/1 i bra ry-syste ms-NA/library-technologies/ e bookl ending/ Cloud-Li bra ry-H a rdwa re/ 

http://www.zacks.com/ stock/ news/ 128806/H ig he r-Custo mer-E nth u sia sm-fo r-3 M-Cloud-Li bra ry 

1 https://mn.ebooksagsettlements.com/ 1

' http://www.digita I bookworld .com/2013/bi sg-report-a-f ew-more-ebook-stats/ 

60