Why Interoperability And Standardization Are Critical Competitive Advantages

Article originally published on Forbes.com. Image courtesy of Getty.

Interoperability is no longer just a technical problem for technology leaders to solve. Companies are doing business on a global scale, and customers have high expectations. Increased connectivity presents serious challenges, from managing data and architecture in inconsistent multi-cloud environments to meeting fragmented data compliance laws across jurisdictions.

Interoperability has become a business survival mechanism defined by infrastructure. I believe that we’re reaching an inflection point where companies that embrace standardization and interoperability will gain significant competitive advantages. And those that don’t will find themselves increasingly isolated in proprietary silos that limit their growth and adaptability.

For example, companies are investing heavily in AI, but investment doesn’t guarantee outcomes. Data from a recent MIT study showed that despite around $40 billion of enterprise GenAI investment, 95% of organizations are getting zero return from pilots. The 5% of implementations that are extracting value address the limitations of GenAI systems head-on; they measure tools based on business outcomes and “expect systems that integrate with existing processes and improve over time.”

Large enterprises are leading in launching GenAI pilots but falling behind in scaling them successfully. This gap illustrates how integrating new tools can help or hinder your company’s goals.

Addressing Five Key Challenges

My company optimizes network and infrastructure services for clients ranging from tech startups to legacy enterprises. In my experience, when leaders address the following five interoperability and standardization challenges, they considerably improve their business metrics and streamline their operations.

Challenge No. 1: Multi-Cloud And Portability Issues

Companies frequently get trapped in what I call "cloud quicksand." They work with a major cloud provider, build deep integrations with their proprietary services, then realize they can’t easily switch providers or negotiate better terms. Unless they are bringing in hundreds of millions of dollars of revenue, they can’t sustain the rigidity and expense of this architectural dependency.

One fintech client wanted to expand into markets with data localization requirements. Because of its cloud-centric design, which used provider-specific services for identity, messaging and metrics, every change it made took weeks of refactoring. When they updated their model to implement containers and open interfaces, they regulated their data and shipped events, not records. Now they can stand up a region in days instead of weeks.

Solution

Adopt a container-native architecture from the beginning. Don’t just lift and shift legacy applications. This often means biting the bullet and redesigning your architecture for portability, then migrating your data.

I recently spoke with leaders from a billion-dollar company that has spent hundreds of millions of dollars and four years trying to move to a microservice-based architecture—and failing. Avoid this trap by choosing standards-aligned building blocks, consistent baseline policies and clear data classification maps. Then make the egress cost latency and cloud-platform jurisdiction part of your placement decision.

Challenge No. 2: APIs And IaC

I see application programming interfaces (APIs) and infrastructure as code (IaC) as the future of programmability. IaC is now a primary business differentiator. Companies often need to integrate with hundreds of different APIs, but there are no common standards for IaC.

An e-commerce customer was experiencing configuration drift across the regions it operated in. It changed its caching rules, which helped customers in Europe but created huge problems for customers in Asia. Despite tracking massive amounts of data on multiple dashboards, they couldn't diagnose the problem. They had to focus less on technical elements and more on business processes to standardize their infrastructure across regions. They used open-source AI to generate software development kits to connect to call platforms automatically, improving their velocity and resolving configuration issues.

Solution

IaC ideally makes automated decisions auditable, repeatable and collaborative. Embrace open-source API specifications, and treat infrastructure definitions as first-class code artifacts. If you implement proper pipelines, you can maintain infrastructure and establish version control around APIs. Tech debt also creeps in without set deprecation policies. Don't get so focused on building new products that you lose sight of how to manage existing tech.

Challenge No. 3: IX Standards

At the backbone level, we're seeing increased demand for direct interconnection, but this process is frustrating, manual and inconsistent. Global internet exchanges (IXs) all have different procedures, service-level agreements and technical requirements. Multinational corporations have to establish their presence in various key IXs to move their data around the world, often navigating dozens of operational models. This fragmentation can add months to deployment timelines and create operational complexities.

Solution

Our industry needs greater standardization and collaboration for IXs. On an organizational level, look for ways to directly connect to ISPs to have more control over the customer experience, especially as you are managing AI and larger data sets. You can also be part of a bigger push for standardizing interconnection processes through standards bodies and common APIs for management platforms.

Challenge No. 4: Interconnect Agreements And SLAs

SLAs facilitate consistent delivery and competitive differentiation, but they also lack standards. Companies may be managing hundreds of different SLAs across their global infrastructure, creating complex technical, legal and commercial problems.

Solution

Without standardized measurement and arbitration methods, SLAs become unenforceable. The paperwork drawn up by legal teams often doesn't make sense through a technical lens. Develop an internal SLA framework you can consistently apply across vendors and translate into clear business metrics. For example, we helped streaming media clients define five key metrics to use in all of their SLAs: availability, latency, jitter, packet loss and mean time to repair.

Challenge No. 5: Observability And Monitoring

Data is plentiful, but insight is scarce. Our clients are drowning in telemetry from dozens of monitoring tools, but each platform has its own data format, altering mechanisms and correlation capabilities. The lack of standardized observability means teams are spending significant time wrangling data and extracting value from it.

Solution

You can’t standardize what you can't see and compare. Define the specific insights that are most valuable for your business, and implement a platform that can ingest data from multiple sources into unified dashboards. Ask vendors to export data in a compatible format, building a shared taxonomy covering factors such as region, data center, network, customer, workload and data class with proper labeling.

Interoperability facilitates adaptability, resilience and velocity. You have an opportunity to lead the charge toward solving interoperability challenges while sharpening your competitive edge. Treat interoperability as a product with a roadmap so you can launch new solutions in new markets more efficiently, with fewer surprises.

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