David Berlind oversimplifies the issue of multiple standards in "When two standards are better than one."
While it is certainly true that having a single standard -- which is available to all developers -- offers the consumer the lowest cost option, and usually a myriad of choices for software vendors, this is not always what the consumer really wants, or needs, or might want -- given the option to choose based upon some criteria other than price. The problem is that "standards" are often the result of compromise between competing demands. This lowest common denominator approach is generally cost-effective but not always satisfactory.
EBCIDIC (from IBM) predated ASCII but was based upon Vendors need an incentive to build a better mousetrap. punched card character layouts and was surpassed by ASCII when teletype services came on the scene. TXT file format is the direct descendant of ASCII and survives to this day, yet it is no longer widely used as a document format, nor is its direct descendent, RTF. Instead, the Microsoft DOC file format is today the "de facto standard" (although Corel -- and apparently many an attorney -- would argue that the WordPerfect format is superior.)
More often than not, the marketplace establishes a "de facto standard" regardless of whether or not that standard offers the kind of interoperability (or even performance) that consumers deserve for their hard-earned dollar. The VHS/BetaMAX example is a good one. Despite the fact that BetaMAX was a technically superior format, it failed in the marketplace, arguably due to marketing blunders more than any other factor. Yet both VHS and BetaMAX were invented by overlapping consortia of competing vendors.
Before the breakup of AT&T into seven constituent Regional Bell Operating Companies (of which there are now only three) all we had was POTS (plain old telephone service). It wasn't fancy -- nor was long-distance a commodity which many could afford, but it was ubiquitous -- and those with limited needs, and budgets, could afford the limited service it provided.
Today, anyone with a limited budget pays triple for baseline telephone service and pays fees for long distance services they may never use. And just try to find a working public telephone. Still, most would agree that the divestiture of AT&T into its constituent parts opened the door for competition and choice. The result was the virtual disappearance of per-minute long distance charges -- except for those who can least afford to pay per-minute rates.
Cellular providers now compete for your telephone service at national prepaid rates comparable to local service rates. Yes, there is confusion between CDMA, GSM, and iDEN -- but there is also choice. Those for whom international service is important choose GSM. Why? Because GSM was created by a standards body whose goal was to provide global cellular voice service. Just the same, CDMA and iDEN are not going away tomorrow because those that value high speed data access more than they value global voice service want to leverage the throughput available today only on those networks. Some choose their cellular provider based upon customer service, others make their choice based upon voice or data coverage, and still others base their choice solely on price.
Should there be standards? Of course -- because fostering interoperability means more competition and thus it is in the consumer's best interest. Nevertheless, if interoperability means settling for inferior service in exchange for commodity pricing, one must think long and hard before giving up technologically superior solutions.
Whether the prevailing standard is "de facto" or not, vendors need to be encouraged to innovate. Innovation leads to new standards and broader choice -- one not just based upon price. Vendors need to have an incentive to build a better mousetrap. We cannot let the need for standards outweigh the need for innovation.