European Management Journal Vol. 17, No. 3, pp. 265–274, 1999  1999 Elsevier Science Ltd. All rights reserved Pergamon Printed in Great Britain 0263-2373/99 $20.00 + 0.00 PII: S0263-2373(99)00005-5 Winning the Standards Race: Building Installed Base and the Availability of Complementary Goods MELISSA SCHILLING, Boston University, Massachusetts In markets that have forces encouraging the adop- tion of a dominant design, the size of a technology’s installed base and the availability of complemen- tary goods may be the most important factors determining its success or failure. This article exam- ines the path dependent nature of technology tra- jectories, and the self-reinforcing effects of installed base and complementary goods. The arti- cle posits that firms can greatly influence their installed base and the availability of complemen- tary goods through their distribution, alliance and marketing strategies. Both theory and examples are used to demonstrate how firms can manage the dynamics of technology selection in their favor.  1999 Elsevier Science Ltd. All rights reserved In many markets, forces encourage the selection of a single technology standard. This standard, or ‘domi- nant design,’ 1 may be embodied in a product design, the system architecture of a family of products, or the process by which products or services are provided. Standards may be specified by government or indus- try groups, such as the NTSC color standard in tele- vision broadcasting (which was approved by the FCC in 1953 and endures today), or the digital video disk standard proposed by the DVD Forum (a consortium of companies that included Hitachi, JVC, Matsushita, Mitsubishi, Philips, Pioneer, Sony, Thomson, Time Warner, and Toshiba). A standard may be a dominant design in a core pro- duct which then constrains possible configurations in the end products (such as the internal combustion European Management Journal Vol 17 No 3 June 1999 265 engine, which has been a defining characteristic of automobiles since the 1908 introduction of Ford’s Model T). A standard may also be a process protocol that has little impact on product configuration, but ensures that producers adhere to some designated practices (such as ISO 9000 quality certification). Standards may be enforced (as by government), or they may be voluntary guidelines that firms adhere to because they facilitate compatibility and cooperation. They may be embodied in ‘open’ sys- tems that are free to the public (such as UNIX, an operating system originally developed by AT&T’s Bell Laboratories in the late 1960s whose specifi- cations could be licensed by any vendor), or they may be proprietary systems that are owned and con- trolled by a single firm (such as Microsoft’s Windows or Intel’s X86 microprocessor line). Standards may be overturned when a successive generation of tech- nology makes the design obsolete, but standards are also often capable of shaping the technological pro- gress in an area — enabling and constraining what designs are likely to emerge in the future. When a market is still in the process of selecting a dominant design, many alternative technologies may be on offer. Coalitions may emerge and shift, as groups of companies adopt and promote competing technology platforms. Firms sponsoring a particular technology usually have a considerable investment in the design — both in terms of physical assets and learning — so they have a keen interest in supporting a technology they believe has a good chance of