The Changing Dynamic of the Internet

46 Pages·2004·0.29 MB·English

The Changing Dynamic of the Internet: Early and Late Adopters of the IPv6 Standard

The Changing Dynamic of the Internet:
Early and Late Adopters of the IPv6 Standard1

Anat Hovav*
([email protected])
Department of Management Information Systems
Fox School of Business and Management, Temple University
207E Speakman Hall
1810 North 13th Street
Philadelphia, Pennsylvania 19122-6083
phone: [phone]
fax: [phone]

David Schuff
([email protected])
209F Speakman Hall
Department of Management Information Systems
Fox School of Business and Management
Temple University
1810 North 13th Street
Philadelphia, Pennsylvania 19122-6083
phone: [phone]
fax: [phone]

*Corresponding author

1 Funding was provided for this research project through the Junior Faculty Grant Program at Temple
University in Philadelphia, Pennsylvania.
© Anat Hovav and David Schuff Page 1 June, 2003
The Changing Dynamic of the Internet: Early and Late Adopters of the IPv6 Standard

The Changing Dynamic of the Internet:
Early and Late Adopters of the IPv6 Standard

Abstract
The United States has, for a considerable time, enjoyed a position of leadership
over the Internet. The introduction and spread of IPv6, the “next generation” Internet
Protocol, could represent a significant shift in this position. While Internet Service
Providers (ISPs) around the world are adopting IPv6, the United States has been less
aggressive. This paper, through an investigation of early and late adopters of IPv6, seeks
to understand the factors that influence the time of adoption decision. Interview data was
collected from eight ISPs in six countries. That data is applied to a set of proposed factors
derived from Roger’s characteristics of early and late individual adopters, and adapted to
organizational context. We found that those characteristics were useful in explaining time
of adoption of IPv6 for five of the eight cases we studied. Closer examination of the
remaining three cases revealed additional factors. Specifically, relative advantage,
uncertainty and risk, crisis, and power relationships also influence an organization’s time
of adoption.
Keywords:
Internet Standards adoption, Standards, IPv6, Case Study, Internet Service Providers

© Anat Hovav and David Schuff Page 2 June, 2003
The Changing Dynamic of the Internet: Early and Late Adopters of the IPv6 Standard

The Changing Dynamic of the Internet:
Early and Late Adopters of the IPv6 Standard

INTRODUCTION
A recent newspaper article (Kim 2004) cautioned that the United States is in
danger of losing its position as a technology leader. Others have voiced similar
sentiments (Butler 1992; Wrafter 2000). For example, the U.S. has lost market share to
Japan in high-tech manufacturing, office and computing machinery, and in radio and
television communications technologies (Butler 1992). Firms in the United States are no
longer the leaders in the development and adoption of mobile phones, wireless
communications, and m-commerce (Wrafter 2000). Organizations in European countries
(such as Sweden) and the Far East (such as Japan) have assumed leadership roles in these
areas.
The possibility of a similar loss in dominance over the Internet exists, due in part
to stagnation. The basic protocols used for communication over the Internet were
developed by scientists in the United States and the U.S. Department of Defense over 40
years ago. Their adoption as a global standard was in part due to the widespread adoption
of local area networks and personal computers, the use of TCP/IP1 with these platforms,
and the incorporation of TCP/IP into the UC Berkeley Unix Operating System (Leiner et
al. 1997). These protocols have remained basically unchanged (with the exception of “ad-
hoc” solutions to provide additional functionality) since their initial implementation. As a
result, the underlying technology of the Internet has not changed significantly since the
1970s.

1 Transport Control Protocol/Internet Protocol. This is the basic communication protocol used for the
Internet.
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The Changing Dynamic of the Internet: Early and Late Adopters of the IPv6 Standard

The most fundamental change to the Internet proposed to date is the introduction
of a new network level protocol called Internet Protocol version 6 (IPv6). IPv6 (also
known as IPng, for “next generation”) offers a number of advantages over the current
standard, IPv4. These advantages include increased address space, mobility, auto-
configuration, multicasting, and quality of service capabilities (for additional details
regarding the key technical aspects of IPv6, refer to Appendix A).
IPv6 is being adopted extensively by ISPs in Japan and China, with other Asian
countries such as Singapore following closely behind. The European Union Commission
(EC) has mandated a timeline for the implementation of IPv6, leading to a slow but
consistent adoption of the new standard by ISPs in Western Europe. In contrast, the
adoption of IPv6 in the United States is minimal. Evidence of this disparity can be seen in
the shift in address allocation between IPv4 and IPv6 (Figure 1) – the United States
currently has 66% of the IPv4 addresses, but only 9% of the IPv6 addresses.
Allocation of IPv4 and IPv6 Addresses:
Top 5 Countries
IPv4 Allocation IPv6 Allocation
United States
Rest of World
19% Rest of World 9%
71% Japan
Germany 9%
3%
Germany
Great Britain 5%
3%
Netherlands
Canada 4%
3%
Great Britian
Japan United States 2%
6% 66%

Figure 1: Allocation of IPv4 and IPv6 Addresses (IPv6style.com 2004; Palet 2003)

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The Changing Dynamic of the Internet: Early and Late Adopters of the IPv6 Standard

The goal of this paper is to investigate the factors that prompt certain
organizations to be early adopters of Internet standards while others remain passive. In
the case of IPv6, we are interested in the conditions that impact time of adoption
decisions by Internet Service Providers (ISPs) operating in various regions of the world.
These ISPs serve as a logical unit of analysis because they are the population who are
making the adoption decision for the IPv6 standard. To this end, our study will focus on
the following research question: What are the factors that drive some ISPs to adopt IPv6
early, while others adopt later? Further, we attempt to provide some insight into the
apparent “late adopter” behavior of many ISPs in the United States regarding the
adoption of IPv6.
To address this question, we draw upon Roger’s (1995) characteristics of early
and late adopters. Although these characteristics focus on the individual adopter’s
personality and traits, they provide a useful framework for considering organizational
time of adoption. We establish organization-level characteristics by mapping the
individual characteristics to the literature on organizational adoption. We use the
mapping to create propositions regarding the major influences on time of adoption for
organizations. These propositions are analyzed against interviews conducted with eight
Internet Service Providers in six countries regarding their adoption (or non-adoption) of
IPv6. By examining these cases, we can learn how those individual characteristics can
influence the organizational time of adoption decision. Indeed, we find that several
factors, including sponsorship and regulation that reduce uncertainty and risk, disparities
in resource allocation leading to crisis, and the existence of “killer applications” that
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The Changing Dynamic of the Internet: Early and Late Adopters of the IPv6 Standard

provide a clear advantage to adopting the new technology, have a major impact on the
time of adoption of Internet standards.
In the next section we introduce the literature regarding characteristics of early
and late adopters as well as the relevant organizational adoption literature. In that section
we map these individual characteristics of early and late adopters to organizations.
Section three describes our methodology and the eight cases studied. Section four details
our analysis of the cases. This is followed by a discussion of the findings and future
research directions. We conclude with potential implications for industry and policy-
setting organizations.
LITERATURE REVIEW
Roger’s Characteristics of Early and Late Adopters
Most current research on the adoption of innovations in an organizational context
describes the innovation and its characteristics (e.g., Rogers 1962, 1983; Eveland and
Tornatzky 1990; Van de Ven 1991: Fichman and Kemerer 1993). For example, Rogers
(1962, 1983) proposed five fundamental characteristics of the innovation: (1) relative
advantage, (2) compatibility, (3) complexity, (5) trialability, and (5) observability.
Environmental characteristics (e.g., Farrell and Saloner 1985; Katz and Shapiro 1986;
Farrell and Saloner 1987; Fichman and Kemerer 1993; Arthur 1996) have also been
found to influence the adoption decision. For example, Katz and Shapiro (1986) and Van
de Ven (1993) discussed the positive influence of sponsorship on the adoption decision.
Generally, the outcome is considered to be dichotomous – either the organization adopts
the innovation, or it does not.
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The Changing Dynamic of the Internet: Early and Late Adopters of the IPv6 Standard

Another interesting question is the timing of the adoption decision. Rogers’
Adoption/Innovation Curve (1995) places potential individual adopters into five
categories (see Figure 2) on a continuum of time of adoption: (1) innovators, (2) early
adopters, (3) early majority, (4) late majority, and (5) laggards.
Adoption/Innovation Curve
s
r
e
t
p
o
d
a

f
o

n
o
i
t
r
o
p
o Innovators Early Early Late
r
P adopters majority majority Laggards
Time

Figure 2: Adoption Innovation Curve (Adapted from Rogers, 1995)
Those who adopt early (innovators, early adopters, and the early majority) are
characterized as being more “venturesome,” (Rogers 1995, p. 263) having access to
capital, can assimilate technical information, and are less risk averse. They can act as
opinion leaders, disseminating information regarding the innovation to those who have
not yet adopted. The later adopters (late majority and laggards) are more “skeptical and
cautious,” (Rogers 1995, p. 265) waiting for the innovation to become pervasive in order
to take advantage of the network externalities. They are more risk averse and less able to
financially withstand a failure due to the adoption of something new.
Organizational Characteristics of Early and Late Adopters
From these descriptions, Rogers (1995) proposed 25 characteristics that
differentiate early adopters from late adopters. Many of these also serve as plausible
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The Changing Dynamic of the Internet: Early and Late Adopters of the IPv6 Standard

differentiators of organizational adopters. We use these characteristics to form
propositions that link these “differentiators” to early and late organizational adopters by
mapping those characteristics to the literature regarding organizational adoption (see
Table 1). For example, Rogers states that individuals that are more literate are more likely
to be early adopters. This can be extended to organizations. It has been argued that
organizations with higher computer literacy (Goncalves et al. 1999) and higher levels of
technology knowledge (Iacovou et al. 1995; Chwelos et al. 2001) are more likely to be
early adopters of that new technology. Wozniak (1993) found that organizations whose
leadership is more highly educated tend to adopt innovations earlier. This leads to the
creation of an organization-level characteristic titled organizational literacy and
technical knowledge.
Rogers suggests that early individual adopters are better able to cope with
uncertainty and risk than later adopters. Similarly, Harrison et al. (1997) found that
companies that perceive more control over the adoption process (the ability to overcome
obstacles) are more likely to adopt. Lower perceptions of barriers to adopt and lower
levels of uncertainty lead to adoption by organizations (Chau and Tam 1997) while
resistance to change reduces the chance of adoption (Arvanitis and Hollenstein 2001).
Hoppe (2002) found that organizations that are potential adopters, in conditions of
uncertainty, would wait for more information. Therefore, uncertainty about the
technology leads to a lower likelihood of adoption (Luque 2002). On the other hand,
Harrison et al. (1997) found that organizations that are early adopters have a more
favorable attitude towards the new technology to be adopted, and therefore have a lower
resistance to change. Consistent with this, Chau and Tam (1997) found that companies
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The Changing Dynamic of the Internet: Early and Late Adopters of the IPv6 Standard

that are content with the technology they currently have will be less likely to adopt new
technologies.
Earlier adopters have a higher degree of communication with other organizations.
Those organizations are more highly interconnected through interpersonal networks in
their social system than later adopters. Similarly, organizations where managers talk to
managers in other companies (Huff and Munro 1985), are involved in active information
gathering (Wozniak 1993), and actively seek information from vendors (Huff and Munro
1985) are more likely to adopt new technologies.
Access to information is an important organizational determinant of adoption.
Firms that are embedded in a knowledge network that facilitates access to information
(Arvanitis and Hollenstein 2001), and firms with greater ability to search for information
are also more likely to adopt early (Hoppe 2002). The managers of organizations that are
early adopters have to engage in active knowledge acquisition (Wozniak 1993; Chau and
Tam 1997), read the general media (Huff and Munro 1985; Wozniak 1993), set a trial
phase (Huff and Munro 1985), and create test-beds when information of a new standard
is not available.
Because organizations seek information about a new innovation in order to reduce
the risk of adoption, an organization’s role among its peers can have an influence on time
of adoption. Harrison et al (1997) found that organizations that are “expected” to adopt
by their stakeholders are more likely to adopt. Firms often engage in a “waiting contest,”
refraining from adopting a new innovation until the information learned from the leaders’
experience is available to them (Hoppe 2002). These early adopters become “opinion
leaders” (Wozniak 1993).
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The Changing Dynamic of the Internet: Early and Late Adopters of the IPv6 Standard

Organizational age is interesting because the evidence of its relationship with
time of adoption is different from the effect of age for individuals. Rogers contends that
age has no effect on time of adoption – an older individual is just as likely to be an early
adopter as a younger individual. However, Luque (2002) found that older firms are less
likely to adopt an innovation because they have less opportunity to choose the latest
innovations (because they are more likely to possess an extensive existing infrastructure).
Rogers lists several characteristics of individual adopters that relate to the effect
of an individual’s wealth on time of adoption. Similarly, there is a relationship between
organizational size and slack financial resources and organizational adoption. The
availability of funding has been shown to have a positive effect on organizational
adoption (Iacouvu et al. 1995; Chwelos et al. 2001). Further, the relationship between
organizational resources and its size has been investigated in the literature. Small firms
often have trouble adopting innovations because they do not have the funding necessary
to invest in the new innovation (Arvanitis and Hollenstein 2001; Hoppe 2002; Luque
2002).
Table 1 lists the complete mapping of the individual characteristics to
organizational factors. Some of the individual characteristics cannot be easily mapped to
an organizational factor. This is not to say that these characteristics are not important. It
only indicates that there are no studies that found the factor had an influence on
organizational adoption decisions. Those characteristics with no clear mapping are
marked on Table 1 with the label “No mapping.”

© Anat Hovav and David Schuff Page 10 June, 2003