Open source adoption strategy

Abstract

Abstract Open innovation in the form of open-source software (OSS) has been a transformative force in the software industry and beyond. The growth of open source has created new ways to develop, distribute and adopt software in organizations. Despite the associated impressive growth of open source research, a rigorous analytical examination of open-source adoption in organizations constitutes a gap in the literature. This article fills this gap by providing insights toward a comprehensive open-source strategy. It develops a game-theoretic analytical model to explain when organizations adopt open source software applications and platforms, and what the implications are. The analysis characterizes conditions under which organizations adopt open source software, and examines whether these adoption patterns are socially beneficial. The article shows that open-source adoption depends crucially on organizational IT capabilities, network effects, and the fit of OSS with the organizations' application needs. The model predicts that firms may sometimes adopt a heterogeneous IT architecture that consists of open source and proprietary software. Moreover, the results suggest that open-source adoption is sometimes socially inefficient. Overall, this analysis contributes a nuanced understanding of the adoption of open innovation in the form of OSS that should be useful to managers and policy-makers involved in related decisions. The article concludes with practical managerial recommendations on formulating a comprehensive open-source strategy.