VHS, QWERTY and IBE?

It's commonly believed that having the right marketing is often more important than having a good product. The examples that are often used to support this position include the triumph of VHS videocassettes over Betamax and the triumph of the QWERTY keyboard over the Dvorak keyboard. The success of many Microsoft products is sometimes added to this list.

In their book Winners, Losers and Microsoft: Competition and Antitrust in High Technology, Stanley Liebowitz and Stephen Margolis argue that none of these examples will stand up to careful scrutiny, and that superior products almost always win in the marketplace. They give fairly solid arguments that support the position that VHS and QWERRY won on their merits, and claim that even Microsoft can’t use its marketing power to win when they have products that are inferior to the competition.

Now let's go back in time to five years ago. At that time, Voltage had no customers but had a good idea that related to how to make a better e-mail encryption product. Back then, people weren't sure what to make of the new "identity-based encryption" technology. It was based on difficult mathematics, so the average person in a corporate security department didn't really have much of a chance to understand how it worked. Even encryption specialists had a hard time understanding it at first. I know that I did.

But people didn't buy IBE because of the elegant mathematics that it uses. Instead, they found that it actually had some significant benefits compared to other encryption technologies. Not needing to look up keys is a big advantage. Not having to manage certificates is another. Maybe the most important of all is the fact that by calculating keys on the fly, the back end of an IBE system is extremely simple. This means that it's much simpler to support and operate, which also means that it costs less.

Enough people found these advantages compelling enough to convince them to buy a product that uses IBE, and there are now over 10 million users of the technology worldwide. If Liebowitz and Margolis are right, that’s probably proof that it's a useful technology. Maybe it will even up as a case study in a book that they write one day.