Competition between Free Open Source, Commercial Open Source and Proprietary Software

Purpose: A growing number of commercial open source software, based on free open source software, appears in many segments of software market. The purpose of this study is to investigate how commercial open source software affects proprietary software producer’s pricing (market share or profit), consumer surplus and social welfare. Design/methodology: To analyze the impact of commercial open source software on proprietary software producer, this study constructs two vertical-differentiation models: the basic model considers proprietary software only competing with free open source software, and its extended one considers proprietary software competing with both free and commercial open source software. Findings: This study mainly finds that the presence of commercial open source software leads to the software price and profit for proprietary software producer decrease and the consumer surplus and social welfare increase. However, it does not necessarily cause the decline in the market share for proprietary software producer. Originality/value: The main contribution of this study is to examine the effect of commercial open source software on proprietary software producer’s competitive strategy, consumer surplus and social welfare.

This study investigates how open source software can play influences on the quality choices of commercial open source and proprietary software providers. It considers two types of open source software: community open source and commercial open source, and assumes that the usability of commercial open source software is better than community open source substitute but inferior to proprietary substitute. It finds that: (i) the functional quality of proprietary software decreases as the functional quality of community open source software increases, but it may increase as the usability of community open source software increases; (ii) even if commercial open source producers must open the source codes of their quality contributions, they have incentive to enhance the functional quality of community open source software; (iii) the influence of community open source software’s quality (usability or functional quality) or commercial open source software’s usability on the functional quality of commercial open source and proprietary software may be not same; (iv) the appearance of commercial open source software may lead to proprietary software producers lowering their software functional quality.

The purpose of this presentation is to establish that, in the domain of Scientific Computation, using Open Source Software can be very useful. At first it will be pointed out that there are generally accepted ideas in the domain of Open Source Software which do not always reflect reality. Then the economic model for Open Source Software is addressed: is it possible to make money with it and how? In particular, we show that both closed source commercial software and free Open Source Software can coexist together. The problem of licenses and the ways to put software as Open Source is also addressed, in particular how to transfer software issued from research to professional software. As an illustration of the previous points, the evolution and strategy of free Scilab software is described.

Open-source software abbreviated as OSS is computer software that is available with source code and is provided under a software license that permits users to study, change, and improve the software. For the commercial software the source code and certain other rights are normally reserved for copyright holders,i.e. the company who developes the software. A group of people in a collaborative manner often developes the Open source software, not under the roof of a large organization. This strategy makes open source software cheap, reliable and modifiable if needed. In this context we shall discuss mainly the features of Open Source Software, differences of open source and free software and open source software movement in Indian perspective.

Free, open source software (FOSS) has a long history, beginning with the origins of software itself, when the terms free software and open source software were not yet defined. Learning about the milestones of this history may help to understand FOSS today.

Objective: Cost minimization on software so that it may be financially viable to provide the various services to all the people of India. Method: An Analytical study was conducted on costs incurred on proprietary software and their corresponding FOSS i.e. free and open source software. Findings: Most part of finance is spent on proprietary software that can be saved by replacing them with the alternative FOSS that too being developed and promoted by DIETY i.e. Department of Electronics and Information Technology and various organizations, societies and institutions like NIELIT i.e National Institute of Electronics & Information Technology, NRCFOSS i.e. National Resource Centre for FOSS and CDAC i.e. Centre for development of Advance Computing and NIC i.e. National Informatics Centre. Applications/Improvements: The huge amount of finances incurred on proprietary software can easily be saved by replacing these software by their corresponding FOSS i.e. free and open source software.

By modifying Hotelling model, we research the differentiation decisions between open source software (OSS) and proprietary software (PS) and the location decisions of proprietary software when open source software and proprietary software coexist in a software market. In this paper, we assume proprietary software producer pursues profit maximization and open source software is freely available. The study finds that: (i) Higher (resp. lower) the OSS's learning cost, smaller (resp. greeter) the software differentiation between OSS and PS; (ii) the compatibility degree between open source and proprietary software affects software differentiation; (iii) how the network externality and OSS user's software development skills affect the software differentiation decisions and the location decisions of proprietary software depends on the compatibility degree between PS and OSS.

The Linux distributor Red Hat (acquired by IBM in 2018) makes a lot of money from free software, raking in more profit than its competitor Canonical from the more popular Ubuntu distribution. Ideologically it either conflates free software and open source software, or only speaks about open source and the open source community. The business model depends on four out of five business strategies for Free and open source software (FOSS), taking advantage of the various exceptions and the network loophole in the General Public License (GPL) that allow for several forms of hybrid mixes of open and enclosed software. Additionally, the company’s appropriation of the copyright to the collective work of the Linux distribution from the community is not carried out in the interests of the community, but in the interest of its shareholders and to facilitate the use of trademark law to partially enclose its products. Finally, a potentially open and horizontal community, the Fedora project, which could have distributed the freedoms to act in effective and thereby democratic forms, coordinated by a non-profit foundation, is legally and organizationally subsumed under a hierarchical business structure, through the Fedora Project Council that is legally controlled by Red Hat.

On the middle ground between open source and commercial software - the case of the Newbler program

Methodology for Public Administrators for selecting between open source and proprietary software

By extending Hotelling game model, this paper explores compatible strategies between open source software (OSS) and proprietary software (PS). In this paper, we assume that PS producer aims at profit maximization, OSS producer pursues market share maximization and software user's expectations on network size may be fulfilled or myopic. For each type of user expectation, we study both cases of market fully covered and partly covered. The main findings are following: (i) in the case of myopic expectation, both OSS and PS producers choose maximum compatible degree in equilibrium. This conclusion is true in both fully covered and partly covered markets; (ii) in the case of fulfilled expectation, equilibrium compatible strategies depend on market coverage. When the market is partly covered, both OSS and PS producers choose maximum compatible degree in equilibrium. But when the market is fully covered, PS producer may choose maximum compatible degree or incompatibility as its equilibrium strategy (The choice depends on the learning (maintenance or development) cost of OSS, user's software development capacity and network externality); (iii) how the competitive strategies of OSS and PS producers are affected by the rival's compatible degree may be different in different user expectations (or market coverage).

Following the growing importance of the energy policies, automatic tools become an arising necessity for administrations. The necessary 3D data can be effectively generated by photogrammetry techniques and Structure-from-Motion (SfM) software, and meaningfully managed and analyzed in Geographical Information Systems (GIS). In this case, for the whole workflow, both proprietary and free open source software (OSS) were used. The known advantage of OSS, besides their cheapness, is the possibility to control all the processing steps and to exploit the offered interoperability. Finally in the paper results, problems and limitations of the achieved products were investigated in order to evaluate and confirm the reliability and convenience of OSS.

With the popularity of open source software (OSS) as an alternative to proprietary software (PS), proprietary-software firms such as IBM and Microsoft started to embrace this new paradigm during the past decades. We analyze how firms choose the software development strategy between OSS and PS, by constructing a duopoly model in which consumers sequentially purchase software and complementary services in a market that exhibits an indirect network effect. We show that a PS firm may benefit from the presence of an OSS firm, and the software market can be dominated by a single OSS if the indirect network effect is weak and the cost saving effect of OSS is negligible. We also show that the market can support two OSS if the cost saving effect of OSS is sizeable, and two PS if firms can provide fully compatible services to competitor’s PS. Building upon the existing works that investigate the competition between PS and OSS, this study improves our understanding of the role of OSS in firm’s software development strategy and market equilibrium.

This study investigated the history of free and open source software (FOSS), comparative analyzed notions of free software and open source software, further studied on support forces and development status of free and open source software. Based on comprehensive review, we aim to suggest that free and open source software has a very bright development prospects.

The Move to the Middle: Convergence of the Open-Source and Proprietary Software Industries