"In retrospect many of the W3C standards which I had felt should form the basis of the JISC IE have clearly failed to have any significant impact in the market place - compare, for example, the success of Macromedia's Flash (SWF) format with the niche role that W3C's SMIL format has." Just so. But these standards didn't fail because they were open. They failed because, for various reasons, they didn't do what people wanted. Open standards are still better - but the lesson here is that standards are not necessarily better just because they're open.
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