Tuesday, February 16, 2010
"Mixed Source" by Ramon Casadeus-Masanell
( meant for Software Developer friends and those from I.T.Marketing)
" Mixed Source " by Ramon Casadeus-Masanell
-----------------------------------------------------------------------------------------
" We study competitive interaction between profit-maximizing firms that sell software and complementary goods or services. In addition to tactical prices competition, we allow firms to compete through business model reconfigurations. We consider 3 business models.
(1) The proprietary model - where all software modules offered by the firm are proprietary .
(2) The Open Source Model - where ALL the modules are open sourced. And,
(3) Mixed Model - where a few modules are open.
When a firm opens one of its modules, users can access and improve the source code. At the same time, however, opening a module sets up an open source ( free) competitor. This hampers the firm's ability to capture value.
We analyse 3 competitive situations !
(a) Monopoly (b) commercial firm, versus non-profit open source (OS) project and (c) Duopoly.
Our research shows that, firms may become ' more closed' in response to competition from an outside OS project : firms are more likely to open substitute, rather than complementary, modules to existing OS projects : when the products of two competing firms are similar in quality, firms differentiate through choosing different business models : and low-quality firms are generally more prone to opening some of their technologies , than firms with high-quality products. Firms may become more closed in response to competition from an outside OS project, and are more likely to use a proprietary model. Firms are more likely to open substitute modules to existing OS projects. "
From " Mixed Source " by Ramon Casadeus-Masanell.
" Mixed Source " by Ramon Casadeus-Masanell
-----------------------------------------------------------------------------------------
" We study competitive interaction between profit-maximizing firms that sell software and complementary goods or services. In addition to tactical prices competition, we allow firms to compete through business model reconfigurations. We consider 3 business models.
(1) The proprietary model - where all software modules offered by the firm are proprietary .
(2) The Open Source Model - where ALL the modules are open sourced. And,
(3) Mixed Model - where a few modules are open.
When a firm opens one of its modules, users can access and improve the source code. At the same time, however, opening a module sets up an open source ( free) competitor. This hampers the firm's ability to capture value.
We analyse 3 competitive situations !
(a) Monopoly (b) commercial firm, versus non-profit open source (OS) project and (c) Duopoly.
Our research shows that, firms may become ' more closed' in response to competition from an outside OS project : firms are more likely to open substitute, rather than complementary, modules to existing OS projects : when the products of two competing firms are similar in quality, firms differentiate through choosing different business models : and low-quality firms are generally more prone to opening some of their technologies , than firms with high-quality products. Firms may become more closed in response to competition from an outside OS project, and are more likely to use a proprietary model. Firms are more likely to open substitute modules to existing OS projects. "
From " Mixed Source " by Ramon Casadeus-Masanell.
