Dual Licensing in Open Source Software Markets
AbstractIn this paper we present a theoretical model to study the characteristics and the commerciaI sustainability of dual licensing, an open source (OS) business strategy that has gained popularity among software vendors. With dual licensing, a firm releases the same software product under both a traditional proprietary license and an open souree one. We show that the decision to employ a dual licensing strategy occurs whenever the feedbacks of the open souree community are valuable enough compared to the quality of the software that the firm is able to develop in-house. Our analysis points to the centraI role of an appropriate managing of OS licenses in order to balance the pros and cons of "going open source" and to make this versioning strategy viable for software vendors; our analysis also suggests a possible explanation for the observed proliferation of open source licenses.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Dipartimento di Scienze Economiche "Marco Fanno" in its series "Marco Fanno" Working Papers with number 0112.
Length: 20 pages
Date of creation: Jan 2010
Date of revision:
open source software; open source business models; embedded software; dual licensing; versioning; license proliferation;
Other versions of this item:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L17 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Open Source Products and Markets
- L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
- D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-02-20 (All new papers)
- NEP-COM-2010-02-20 (Industrial Competition)
- NEP-IND-2010-02-20 (Industrial Organization)
- NEP-INO-2010-02-20 (Innovation)
- NEP-IPR-2010-02-20 (Intellectual Property Rights)
- NEP-TID-2010-02-20 (Technology & Industrial Dynamics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Koski, Heli, 2007. "Private-collective Software Business Models: Cordinatitons and Commercialization via Licensing," Discussion Papers 1091, The Research Institute of the Finnish Economy.
- Comino, Stefano & Manenti, Fabio M. & Parisi, Maria Laura, 2007. "From planning to mature: On the success of open source projects," Research Policy, Elsevier, vol. 36(10), pages 1575-1586, December.
- Josh Lerner & Jean Tirole, 2002.
"The Scope of Open Source Licensing,"
NBER Working Papers
9363, National Bureau of Economic Research, Inc.
- Mikko Mustonen, 2005. "When Does a Firm Support Substitute Open Source Programming?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(1), pages 121-139, 03.
- Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 822-41, August.
- Chaim Fershtman & Neil Gandal, 2007. "Open source software: Motivation and restrictive licensing," International Economics and Economic Policy, Springer, vol. 4(2), pages 209-225, August.
- Andreas Freytag & Sebastian von Engelhardt, 2010. "Institutions, Culture, and Open Source," Jena Economic Research Papers 2010-010, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- Ginchev Ivan, 2008. "Optimality conditions for scalar and vector optimization problems with quasiconvex inequality constraints," Economics and Quantitative Methods qf0805, Department of Economics, University of Insubria.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fabio Maria Manenti).
If references are entirely missing, you can add them using this form.