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Dual Licensing in Open Source Software Markets

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Author Info

  • Fabio Maria Manenti

    ()
    (University of Padua)

  • Stefano Comino

    ()
    (Università di Udine)

Abstract

In 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.

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Bibliographic Info

Paper provided by Dipartimento di Scienze Economiche "Marco Fanno" in its series "Marco Fanno" Working Papers with number 0112.

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Length: 20 pages
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:pad:wpaper:0112

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Related research

Keywords: open source software; open source business models; embedded software; dual licensing; versioning; license proliferation;

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References

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  1. Josh Lerner & Jean Tirole, 2002. "The Scope of Open Source Licensing," NBER Working Papers 9363, National Bureau of Economic Research, Inc.
  2. 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.
  3. 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.
  4. 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.
  5. Koski, Heli, 2007. "Private-collective Software Business Models: Cordinatitons and Commercialization via Licensing," Discussion Papers 1091, The Research Institute of the Finnish Economy.
  6. 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.
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Citations

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Cited by:
  1. Engelhardt, Sebastian v. & Freytag, Andreas, 2013. "Institutions, culture, and open source," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 90-110.
  2. 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.
  3. German Lambardi, 2009. "Software Innovation and the Open Source threat," Working Papers 09-15, NET Institute, revised Sep 2009.
  4. Éric Darmon & Dominique TORRE, 2014. "Open Source, Dual Licensing and Software Competition," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201405, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.

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