Making Excellency a Standard: How MSAs Keep the Market Competitive

Competitive MarketOne of the most important factors that drive a successful market is the freedom of choice. Giving consumers the power to choose creates an ecosystem where competition between vendors hinges on two simple, significant matters: quality and quantity. Buyers who can freely switch between two products based only on these two metrics fosters an industry that provides, not prohibits.

For network product manufacturers, consumer freedom comes in the form of an MSA.

Continuous Wins for Customers

When companies establish a multi-source agreement, they contract to manufacture interoperable products – compatible with the standard majority of market hardware. Agreeing to create products all usable with, or possessing the dominant component among buyers creates an open market; one that adheres to the industry’s practical standard of operation.

Standards exist in virtually every market, but this does not mean all of them have, or need, MSAs. Companies may be too ahead of their peers or too popular with consumers to give any sort of competitive leeway. An MSA is also a surefire way of dismantling a monopoly — those which have made their proprietary service or product the de facto standard, either by history or sheer excellence.

Clean Wins for Companies

What multi-source agreements primarily circumvent is the establishment of artificial de jure standards, mandating vendors to create products that work with the actual dominant standard, whichever type it may fall into. An MSA keeps vendors from creating the market equivalent of a “walled garden,” which is an artificial division that prevents consumers from using competing products, even if they deem their current selection inferior. MSAs make sure vendors remain fighting for market shares, and that buyers don’t have to commit to a certain provider if they don’t want to.

Companies who engage in MSAs are typically those that provide components for new, existing, and dominant markets. A model industry for these would be the network design sector, with engineers dealing with individual modules such as Ethernet routers, SFP transceivers, fiber optic cables, and other system components in need of constant upgrading, replacing, and optimizing.

Multi-source agreements are integral to the continual competitiveness of the markets eligible for it. By setting an equal yet aggressive playing field for all manufacturers, it guides the industry towards its optimal future; with companies always having an incentive for improvement.