Harvard Business School working paper on Open Source / Mixed Source
Oct 21, 2009, 15:32 (0 Talkback[s])
(Other stories by Ramon Casadesus-Masanell, Gastón Llanes)
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"Proprietary software, on the other hand, results in
superior value capture because the intellectual property remains
under the control of the original developer. While the
straightforward rationale for "mixed source" (a combination of the
two) is appealing, what does it mean for a business model? Under
what circumstances should a profit-maximizing firm adopt a mixed
source business model? How should firms respond to competitors'
adoption of mixed source business models? And what are the right
pricing structures under mixed source compared with the proprietary
business model? In this paper the researchers analyze a model where
firms with modular software must decide which modules to open and
which to keep proprietary. Findings can be directly applied to the
design of optimal business strategies. Key concepts include:
* Firms may become more closed in response to competition from
an outside open source (OS) project, and are more likely to use a
proprietary business model.
* Firms are more likely to open substitute, rather than
complementary, modules to existing OS projects.
* Low-quality firms are generally more prone to opening some of
their technologies than firms with high-quality products."