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Entry Strategies Under Competing Standards: Hybrid Business Models in the Open Source Software Industry

  • Andrea Bonaccorsi

    ()

    (Department of Electrical Systems and Automation, University of Pisa, Via Diotisalvi 2, 56126 Pisa, Italy)

  • Silvia Giannangeli

    ()

    (Sant'Anna School of Advanced Studies, Piazza Martiri della Libertà 33, 56127 Pisa, Italy)

  • Cristina Rossi

    ()

    (Politecnico di Milano, Piazza Leonardo da Vinci 32, 20133 Milano, Italy)

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    The paper analyzes the strategies of software firms that have entered the open source (OS) field. The notion of the OS business model is discussed in the light of a substantial body of theoretical literature concerning strategic management and the economics of innovation, as well as specialized literature on OS. Empirical evidence based on a survey of 146 Italian software firms shows that firms have adapted to an environment dominated by incumbent standards by combining the offering of proprietary and OS software under different licensing schemes, thus choosing a hybrid business model. The paper examines the determinants of the degree of openness toward OS and discusses the stability of hybrid models in the evolution of the industry.

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    File URL: http://dx.doi.org/10.1287/mnsc.1060.0547
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    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 52 (2006)
    Issue (Month): 7 (July)
    Pages: 1085-1098

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    Handle: RePEc:inm:ormnsc:v:52:y:2006:i:7:p:1085-1098
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    1. Aghion, Philippe & Bolton, Patrick, 1987. "Contracts as a Barrier to Entry," American Economic Review, American Economic Association, vol. 77(3), pages 388-401, June.
    2. Paul Klemperer, 1987. "The Competitiveness of Markets with Switching Costs," RAND Journal of Economics, The RAND Corporation, vol. 18(1), pages 138-150, Spring.
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    10. Franke, Nikolaus & Hippel, Eric von, 2003. "Satisfying heterogeneous user needs via innovation toolkits: the case of Apache security software," Research Policy, Elsevier, vol. 32(7), pages 1199-1215, July.
    11. Bonaccorsi, Andrea & Rossi, Cristina, 2003. "Why Open Source software can succeed," Research Policy, Elsevier, vol. 32(7), pages 1243-1258, July.
    12. Church, Jeffrey & Gandal, Neil, 1992. "Network Effects, Software Provision, and Standardization," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 85-103, March.
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