Open Source as a Competitive Weapon Proves to be a Bad Investment

“Oliver Alexy of Technische Universität München (TUM)
Business School has written an interesting paper entitled ‘Putting
a Value on Openness: The Effect of Product Source Code Releases on
the Market Value of Firms.’ The research traces the impact of open
source on company market valuations from January 1, 1999, to April
30, 2007. The research is hampered somewhat by a lack of
private-company data, but it still offers up some useful
conclusions.

“Alexy tracks open source through the pre-Bubble era (mostly
hype leading to outsized but highly transitory investor returns) to
today, where open source is becoming the de facto way of building
software businesses…”

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