Open Source Firms Research Articles

COEXISTENCE OF PRIVATE FIRMS AND OPEN SOURCE FIRMS UNDER SPILLOVERS AND CONSUMER BIAS

Open source technologies have been an important divergence from the private produc- tion, and some markets have accommodated both open source firms and private firms. We explore the conditions under which such a coexistence of both type of firms can be seen. Through a simple and tractable game theoretical model, with spillovers on the open source production and positive consumer bias for the privately produced good, we analyze the conditions for which, in the equilibrium, a private firm and an open source firm share the market. We find that for large enough consumer bias, the two types cannot coexist, however when the consumer bias is relatively low and the spillover effect is not too strong, then we get a coexistence result.

Industry equilibrium with open-source and proprietary firms

We present a model of industry equilibrium to study the coexistence of open-source and proprietary firms. Two novel aspects of the model are (i) participation in open source arises as the optimal decision of profit-maximizing firms, and (ii) open-source and proprietary firms may (or may not) coexist in equilibrium. Firms decide their type and investment in R&D, and sell packages composed of a primary good and a complementary private good. Open-source firms share their technological advances on the primary good, whereas proprietary firms keep their innovations private. The main contribution of the paper is to determine conditions under which open-source and proprietary firms coexist in equilibrium. Interestingly, this equilibrium is characterized by an asymmetric market structure, with few large proprietary firms and many small open-source firms. We also study the limiting economy and present conditions under which large numbers favor cooperation in R&D.

A Commercial Perspective on Open Source Hardware - An Interdisciplinary Law and Management Investigation of the Personal 3D Printing Industry

The personal 3D printing technology is without a doubt interesting because of its potential to democratise manufacturing and free creativity, but there is another reason why the technology is interesting from an academic perspective; it was initially started as an Open Source project and development of the technology continues to be pushed forward by the Open Source community (Lipson & Kurman, 2010).Furthermore the number of commercial firms manufacturing 3D printers has exploded in the last couple of years and the majority of these personal 3D printer-manufactures are deeply embedded in the Open Source community. While the potency of the Open Source development is well-established in the world of software (Y. Benkler, 2002; Fosfuri, Giarratana, & Luzzi, 2008; Lerner & Tirole, 2004; G. Von Krogh & Spaeth, 2007), it is comparatively unexplored in relation to physical products. The few studies conducted on Open Source development of physical products have mainly focused on the transferability of the Open Source principles from software to physical product in general (Abdelkafi, Blecker, & Raasch, 2009; Raasch, Herstatt, & Balka, 2009) while the commercial perspective on the phenomenon has largely been ignored.In this thesis I attempt to remedy this knowledge gab by conducting an in-depth analysis of the Open Source firms in the personal 3D printing industry and their ability to capture profits from the Open Source innovation.

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

Open source and proprietary software firms are no longer polar opposites on the business landscape. In the decade in which open source software has become a practical alternative to proprietary products, there has been a so-called move to the middle. Proprietary firms have begun to embrace open source development methods and products, while open source firms have resorted to traditional methods of generating revenues from free software. Further, in many important areas the two classes of firm have learned to co-operate as well as compete with one another. This article describes the evolution of co-operation and competition between open source and proprietary software product firms, focusing on the operating system, middleware, and application layers of the software stack.

Comparing motivations of individual programmers and firms to take part in the open source movement: From community to business

The first urgent question for any scholar willing to study the Open Source (OS) movement has been clearly put by Glass (1999, 104): I don’t know who these crazy people are who want to write, read and even revise all that code without being paid anything for it at all. A growing body of economic literature has been addressing the motivations at the basis of the participation in the OS movement since when the new paradigm has become successful and triggered the entrance on the market of firms offering Open Source based products and services (Open Source firms). However, most of the empirical analyses focus on individual developers and neglect companies that adopt Open Source business models. This paper contributes to the literature by providing empirical evidence on the incentives of the firms that engage in OS activities. Findings on firms’ motivations are compared

An Empirical Study of the Patent Prospect Theory: An Evaluation of Antispam Patents

This paper is an empirical study of Edmund Kitch's patent prospect theory, based on an evaluation of antispam patents. The paper is thus a contribution to the wider debates about the benefits and costs of patents in general, and of software patents in particular. The antispam patent prospect has been selected for the study because this sector of the software industry was formed in the last decade, when software patents were routinely available, and the sector is sufficiently small that all known antispam patents have been individually evaluated and a majority of major players in the industry examined - including open-source firms. The paper concludes that the antispam patent prospect has facilitated the orderly development of the industry by encouraging diverse antispam solutions, discouraging technology appropriation by reverse engineering, and fostering a market for antispam technologies. It is argued that the patent environment has helped rather than hindered small, innovative, first-mover firms in protecting and marketing their technologies. It is also shown that the propriety and open-source modes of software delivery are not mutually exclusive, that collaboration takes place, and that both can derive benefit from the patent system.

Why profit-oriented companies enter the OS field?

This paper contributes to the literature on Open Source (OS) by providing empirical evidence on the incentives of firms that engage in the field. Data collected by a survey on 146 Italian companies supplying OS solutions ( Open Source firms ) show that (surprisingly) intrinsic, community-based incentives do play a role but are not, in general, put into practise. We investigate this discrepancy between attitudes and behaviours and single out groups of firms adopting a more consistent behaviour. Our results are in line with the literature on individual motivations in the OS movement.

Intrinsic vs. extrinsic incentives in profit–oriented firms supplying Open Source products and services

This paper contributes to the literature on Open Source (OS) software by providing empirical evidence on the incentives of firms that engage in OS activities. Data collected by a survey conducted on 146 Italian companies supplying OS solutions (Open Source firms) show that (surprisingly) intrinsic, community–based incentives do play a role but are not, in general, put into practise. We investigate this discrepancy between attitudes and behaviours and single out groups of firms adopting more consistent behaviours. Our results are in line with the literature on business models of the firms that enter the Open Source field.

Intrinsic Motivations and Profit-Oriented Firms in Open Source Software: Do Firms Practise What They Preach?

A growing body of economic literature is exploring the incentives of the agents involved in the Open Source movement. However, most empirical analyses focus on individual developers and neglect firms that do business with Open Source software (Open Source firms). This paper contributes to the literature by providing empirical evidence on the incentives of firms that engage in Open Source activities. Data on firms' motivations were collected by a large-scale survey conducted on 146 Italian companies supplying Open Source (OS) solutions and show that intrinsic, community-based incentives do play a role. Nevertheless, these positive attitudes towards the values of the OS community, which are quite surprising by profit-oriented firms, are not in general put into practise. Discrepancy between attitudes and behaviours is a widely investigated phenomenon in social psychology literature. We explore its pattern in our sample, find that it does not concern all the respondents, and single out a group of firms adopting a more consistent behaviour. Our results are in line with the literature on individual motivations in organisations and Open Source business models.

Adaptive Entry Strategies under Dominant Standards - Hybrid Business Models in the Open Source Software Industry

During the '60s and the '70s, basically all software was Open Source and everyone was allowed to copy, modify and redistribute computer programs. When software ceased to be hardware-specific and the diffusion of computers took off, firms started to produce software independently from hardware and to protect their code through intellectual property rights. At present, a turnaround is taking place: the Open Source production mode is spreading across the software industry and, in some cases, it performs even better than the traditional proprietary one. Although a growing body of literature is analyzing Open Source software (OSS) issues, there is still lack of empirical data on the phenomenon, and little is known about firms that enter the software industry by producing under the Open Source license scheme (Open Source firms). This paper is a contribution to fill this gap and focuses on the business models of these firms. We find significant heterogeneity among them, in particular many agents supply both proprietary and Open Source software. We present a model of adoption that studies the intra-firm diffusion of the new paradigm. Explanatory hypotheses are discussed analyzing how the characteristics of the Open Source production mode and of network externalities in software demand shape the strategies of firms that entered the OSS field.