Empirical Evaluation of Network Externalities in Data Standards Diffusion in a Subset of European Organizations

Network externalities are particular effects in information goods markets that increase the value of goods depending on the number of adopters. This peculiar effect can have relevant consequences in data standards diffusion, a critical aspect of ICT markets due to the impact on interoperability among institutions and software infrastructures. We propose in this paper an approach to help understanding the existence of these effects and evaluating their importance. The approach can help organizational stakeholders to better understand dynamics in different scenarios, like the migration to a new software application or strategies targeted at augmenting the diffusion of a standard inside the organization. We apply the method to a case study of six European Public Organizations focusing on different categories of data standards. We derived useful lessons from the deployment of the approach, above all that the approach - although not fully automated - has been unintrusive in the activities of the organizations involved. In this sense, transparency, and unintrusiveness of the data collection activities are of foremost importance, at least as important as the results submitted to the committing organization. Main findings of the case study are that the presence of network externalities is stronger in some standards categories rather than others, and that a full generalization to other institutions cannot be achieved due to the peculiarities of each organization, from organizational size to budget available.