Framework to enable hassle-free open source innovation

Abstract

Changing customer needs, the entry of new market players, and rapid technological advancements often lead to the creation of new business models or the disruption of existing ones. However, pricing and customers' willingness to pay for technology are critical factors that determine the success of these models. Consequently, a substantial body of research on business models has focused on innovation, technology management, and the development of frameworks specific to the software industry.

This study aims to explore how business models evolve in the software sector by examining the interrelationship between technology, pricing strategies, and customer preferences as primary drivers of change.

The findings reveal a trend of convergence in production methods, indicating that leading open-source companies are adopting R&D practices and strategic partnerships similar to those used by top proprietary software firms. Likewise, business models are also becoming more aligned. Many successful open-source companies are now generating significant revenue through dual-licensing models, mirroring the strategies of proprietary firms.

An interesting insight from the study is that the location of key assets (such as intellectual property or development hubs) has a greater influence on competitive strategy than the software licensing model itself. This convergence suggests future transformations in the software industry and poses intriguing questions for economic theory.