- Research Article
12
- 10.2139/ssrn.780804
Open Source vs. Proprietary Software: Competition and Compatibility
- Aug 31, 2005
- SSRN Electronic Journal
- Sang-Yong Tom Lee + 1 more +1
Open Source vs. Proprietary Software: Competition and Compatibility
In this paper, we study oligopolistic competition between closed and open source softwares. By intersecting existing economic contributions on open source, we propose a two stage game with perfect information and product di¤eretiation in which producers firstly set softwares quality, then they determine prices (constrained at zero for open source programs). In doing this, we explicitly model lock-in e¤ects, network externality components of software quality as well as knowledge accumulation in software use and implementation. With respect to a monopolistic benchmark case, we argue that in duopoly a pro- prietary sofware producer facing an open source software will reduce its selling price whether: (i) its network of users is larger than open sources one and its consumers are largely experienced on its program, (ii) it has a small network of un-skilled consumers. In opposition, after open source softwares emergence, proprietary software price does augment if proprietary software users form a large, but poorly skilled network. Fur- thermore, we show that, in all above cases, proprietary software quality increases because of the existence of a open source alternative to a previouisly monopolistic program. Finally, by modeling knowledge accumulation processes through di¤erence equations, we show that the ratio between closed and open source programs opportunity costs of software learning and deployment plays a crucial role in shaping market outcomes. Until an open source software remains too complex and technical for unskilled or time-scarse users, a shared market solution in which both softwares are adopted is predicted. In contrast, if opportunity costs in learning and understanding open source programs are remarkably low, or at least equal to opportunity costs of a closed source software, then a open source dominance outcome (i.e. all software are open ones) phases out.
Open Source vs. Proprietary Software: Competition and Compatibility
Open Source vs. Proprietary Software: Competition and Compatibility
The Move to the Middle: Convergence of the Open-Source and Proprietary Software Industries
The Move to the Middle: Convergence of the Open-Source and Proprietary Software Industries
Open Source in Government
Open source software (OSS) is computer software that has its underlying source code made available under a licence. This can allow developers and users to adapt and improve it (Raymond, 2001). Computer software can be broadly split into two development models: • Proprietary, or closed software, owned by a company or individual. Copies of the binary are made public; the source code is not usually made public. • Open-source software (OSS), where the source code is released with the binary. Users and developers can be licenced to use and modify the code, and to distribute any improvements they make. Both OSS and proprietary approaches allow companies to make a profit. Companies developing proprietary software make money by developing software and then selling licences to use the software. For example, Microsoft receives a payment for every copy of Windows sold with a personal computer. OSS companies make their money by providing services, such as advising clients on the GPL licence. The licencee can either charge a fee for this service or work free of charge. In practice, software companies often develop both types of software. OSS is developed by an ongoing, iterative process where people share the ideas expressed in the source code. The aim is that a large community of developers and users can contribute to the development of the code, check it for errors and bugs, and make the improved version available to others. Project management software is used to allow developers to keep track of the various versions. There are two main types of open-source licences (although there are many variants and subtypes developed by other companies): • Berkeley Software Distribution (BSD) Licence: This permits a licencee to “close” a version (by withholding the most recent modifications to the source code) and sell it as a proprietary product; • GNU General Public Licence (GNU, GPL, or GPL): Under this licence, licencees may not “close” versions. The licencee may modify, copy, and redistribute any derivative version, under the same GPL licence. The licencee can either charge a fee for this service or work free of charge. Free software first evolved during the 1970s but in the 1990s forked into two movements, namely free software and open source (Berry, 2004). Richard Stallman, an American software developer who believes that sharing source code and ideas is fundamental to freedom of speech, developed a free version of the widely used Unix operating system. The resulting GNU program was released under a specially created General Public Licence (GNU, GPL). This was designed to ensure that the source code would remain openly available to all. It was not intended to prevent commercial usage or distribution (Stallman, 2002). This approach was christened free software. In this context, free meant that anyone could modify the software. However, the term “free” was often misunderstood to mean no cost. Hence, during the 1990s, Eric Raymond and others proposed that open-source software was coined as a less contentious and more business-friendly term. This has become widely accepted within the software and business communities; however there are still arguments about the most appropriate term to use (Moody, 2002). The OSMs are usually organised into a network of individuals who work collaboratively on the Internet, developing major software projects that sometimes rival commercial software but are always committed to the production of quality alternatives to those produced by commercial companies (Raymond, 2001; Williams, 2002). Groups and individuals develop software to meet their own and others’ needs in a highly decentralised way, likened to a Bazaar (Raymond, 2001). These groups often make substantive value claims to support their projects and foster an ethic of community, collaboration, deliberation, and intellectual freedom. In addition, it is argued by Lessig (1999) that the FLOSS community can offer an inspiration in their commitment to transparency in their products and their ability to open up governmental regulation and control through free/libre and open source code.
Read moreImpact of Competition from Open Source Software on Proprietary Software
The number and impact of open source projects is increasing. We examine the impact of competition from open source software (OSS) on proprietary software providers by analyzing three cases: (i) proprietary software as a monopoly, (ii) mixed duopoly competition between proprietary software provider and OSS, and (i) duopoly competition between two proprietary software providers. We use an analytical model to capture two important features of OSS: (i) its zero licensing price and (ii) its lower usability in comparison with proprietary software. Prior studies have shown that competition from OSS causes the proprietary software provider to produce software that is both lower quality and lower priced than software offered by a monopolist. In contrast, our paper shows that these results hold under certain conditions but are not always true. We find that competition from OSS can induce the proprietary software provider to increase its software quality and price relative to those of the monopolist when the proprietary software provider's cost of enhancing software quality is moderate. Surprisingly, we also find that competition from OSS can lead to a reduction in social welfare. Whereas prior research has shown this result in the context of network effects, we show that this can occur in the absence of network effects and offer a novel explanation.
Read moreLicensing and Competition for Services in Open Source Software
Open source software is becoming increasingly prominent, and the economic structure of open-source development is changing. In recent years, firms motivated by revenues from software services markets have become the primary contributors to open-source development. In this paper we study the role of services in open source software development and explore the choice between open source and proprietary software. Specifically, our economic model jointly analyzes the investment and pricing decisions of the originators of software and of subsequent open-source contributors. We find that if a contributor is efficient in software development, the originator should adopt an open-source strategy, allowing the contributor to offer higher total quality and capture the higher end of the market while the originator focuses on providing software services to lower end consumers. Conversely, if the contributor is not efficient in development, the originator should adopt a proprietary software development strategy, gaining revenue from software sales and squeezing the contributor out of the services market. In certain cases an increase in originator development efficiency can result in increased contributor profits. Finally, we find that, somewhat counterintuitively, an increase in contributor development efficiency can reduce overall social welfare.
Read moreDATABASE ORGANISATION IN A WEB-ENABLED FREE AND OPEN-SOURCE SOFTWARE (FOSS) ENVIRONMENT FOR SPATIO-TEMPORAL LANDSLIDE MODELLING
Abstract. Landslides exhibit themselves in different mass movement processes and are considered among the most complex natural hazards occurring on the earth surface. Making landslide database available online via WWW (World Wide Web) promotes the spreading and reaching out of the landslide information to all the stakeholders. The aim of this research is to present a comprehensive database for generating landslide hazard scenario with the help of available historic records of landslides and geo-environmental factors and make them available over the Web using geospatial Free & Open Source Software (FOSS). FOSS reduces the cost of the project drastically as proprietary software's are very costly. Landslide data generated for the period 1982 to 2009 were compiled along the national highway road corridor in Indian Himalayas. All the geo-environmental datasets along with the landslide susceptibility map were served through WEBGIS client interface. Open source University of Minnesota (UMN) mapserver was used as GIS server software for developing web enabled landslide geospatial database. PHP/Mapscript server-side application serve as a front-end application and PostgreSQL with PostGIS extension serve as a backend application for the web enabled landslide spatio-temporal databases. This dynamic virtual visualization process through a web platform brings an insight into the understanding of the landslides and the resulting damage closer to the affected people and user community. The landslide susceptibility dataset is also made available as an Open Geospatial Consortium (OGC) Web Feature Service (WFS) which can be accessed through any OGC compliant open source or proprietary GIS Software.
Read moreTeaching Computer-Assisted Retrosynthesis Reaction Prediction with Open-Source Software
Over the past decade, numerous computer-assisted retrosynthesis reaction prediction methods have been reported in the chemical literature, several of which are also shared as open-source code. Reports of integrating these modern open-source retrosynthetic prediction techniques into the chemical education classroom, however, is largely absent. This article describes our efforts to teach a computer-assisted retrosynthesis workshop series using open-source reaction prediction software and methods. In addition to three workshops on selected open-source reaction prediction methods, the series included workshops on Python programming and introductory cheminformatics using the RDKit cheminformatics toolkit. A pre and post survey was distributed to better understand participant familiarity and workshop outcomes. Participants indicated that they had minimal experience with cheminformatics, and open-source retrosynthesis software, however after the workshop series they indicated increased familiarity, interest, and desire to pursue additional training related to open-source retrosynthesis software and methods. We conclude this article with our experiences and ideas for future improvements. The workshop materials and code are available with an open source license, and educators are encouraged to adapt and improve the lessons (https://github.com/UA-Libraries-Research-Data-Services/retrosynthesis).
Read moreOSL 3.0: A Better License for Open Source Software
There are many ways to license open source software. Given the attention paid recently to the General Public License (GPL) and its latest version (GPLv3), you may be interested to know that there are other licenses that satisfy the principles of free and open source software without the confusion and polemics that surround the GPL. Other open source licenses have been approved by Open Source Initiative and adopted by commercial companies and by open source projects. Most of those other licenses are professionally written by lawyers to express clearly the licensing objectives of software copyright and patent owners and to ensure that they are valid and enforceable in all important jurisdictions. I wrote one of those licenses, the Open Software License. The third version of this license, OSL 3.0, was approved by Open Source Initiative in 2005. This article explains why it is a better license for software than the GPL. Software licensors choose their licenses based upon their particular philosophy and business models, and they intend their licenses to define the expected behavior of their licensees around the world. Because philosophies and businesses differ, so do licenses. In the open source world, there are two general categories of licenses: (1) Those licenses that allow derivative works of the software to be used and distributed as part of proprietary programs, and (2) those that require derivative works to be distributed under the same open source license as the original. The BSD license is the archetype of the first kind, what I call academic licenses. The GPL (version 2) is the most popular of the second kind, the so-called reciprocal or copyleft licenses. The license philosophies of these two categories of licenses are inherently irreconcilable, the first being compatible with proprietary derivative works and the other not, but they each make a valid point about the freedom to copy, change, and use software. I pass no judgment between them, since it is a licensor's right to choose a license for his own copyrightable works, not his lawyer's choice. The complete text (which is shorter than this article) of OSL 3.0 and its companion licenses is posted at www. rosenlaw.com/OSL3.0-comparison.pdf.
Read moreComparison of open source software for digital libraries
This study is an examination of features of the four most popular digital library open source software packages against a set of predetermined criteria that is deemed to be essential for the development of a digital library. While analysing and identifying the similarities, differences, strengths, and weakness of the open source software packages, it is indicated that open source digital library software still lacks certain functionalities that are perceived to be important. Each software package has its own individual strengths and weaknesses that will appeal to organizations and stakeholders with different needs. The study is expected to help those library professionals, seriously interested in implementing a digital library by providing a checklist to evaluate how well a particular software fits into their specific implementation requirements. Certain good features of the four open source software packages have also been pointed out via a comparison analysis.
Read moreUnderstanding Knowledge Sharing in Open Source Software Project community: Perspectives of Individual Motivation Virtual Community and Virtual Team
Nowadays, Open Source Software (OSS) is widely used and plays a crucial role in the software industry. OSS development is a knowledge-intensive activity that requires very high levels of domain knowledge and needs to maintain the knowledge sharing environment. OSS project develop by the contribution of OSS members on its virtual community where every member can communicate and develop software together. To create new open source software needs the motivation of all members, the resources embedded in the relationship in community and the coordination of members as a virtual team to complete the OSS tasks. This study focused on the knowledge sharing in the OSS project community under the individual motivation, virtual community and virtual team perspectives. We analyzed 304 surveys collected from OSS communities and found that the extrinsic motivation, some perspectives of virtual community such as social interaction, identification and perspective of virtual team – team cognition have a direct impact on knowledge sharing of OSS project community. The study found that all the perspectives of virtual community have a significant impact on team cognition, and therefore have indirect effect on the knowledge sharing in OSS. Moreover, our results indicated that knowledge sharing has a significant impact on project performance. Implications for theory building, practical management and future research are also discussed.
Read moreThe Tao of Open Source: Minimum Action for Maximum Gain
This Article denies the sharply diametric rhetoric characterizing the debate over the viability of open source software. Rejecting the extremes, Satchwell argues that a middle solution exists whereby a properly formed intellectual property regime will incentivize the production of quality open source software while ensuring the stability of the open source paradigm and without disrupting more traditional intellectual property structures. To this end, this Article discusses the necessary focus and form of such an open source IP regime and shows that by concentrating exclusively on attribution and vertical stability a path may be steered between the tragedies of the commons and anticommons that will enable and promote open source as a viably sustainable production method. Finally, a possible form for such a system is suggested and its benefits discussed.
Read moreA review of Open Source Software and Open Source Movement in Developing Countries
Open-source software abbreviated as OSS is computer software that is available with source code and is provided under a software license that permits users to study, change, and improve the software. For the commercial software the source code and certain other rights are normally reserved for copyright holders,i.e. the company who developes the software. A group of people in a collaborative manner often developes the Open source software, not under the roof of a large organization. This strategy makes open source software cheap, reliable and modifiable if needed. In this context we shall discuss mainly the features of Open Source Software, differences of open source and free software and open source software movement in Indian perspective.
Read moreManagement Insights
Management Insights
Comparative Study on Open Source Software for Cloud Computing Platform: Eucalyptus, Openstack and Opennebula
Cloud computing is a Service Oriented Architecture which reduced information technology overhead for the end-user and provide great flexibility, reduced total cost of ownership, on-demand services and many other things [1]. Hence it delivered all IT related capability as services rather than product .Services on cloud are divided into three broad categories: Software as a Service, Infrastructure as a Service & Platform as a Service. Same as services cloud is also classified as Private Cloud, Public Cloud & Hybrid Cloud. Private cloud is increasingly become popular between every private organization either large or small wants .To deploy public or private cloud there are many open source software available some are Eucalyptus, Nimbus, OpenStack, Open Nebula Cloud stack and Amazon Web Services .This paper, I provide a study of the main open source software such as Eucalyptus, OpenStack and OpenNebula for cloud implementation. It is believe that the comparison presented in this paper would benefit developers in selecting best open source Software.
Read moreSocial network analysis of open source software: A review and categorisation
Social network analysis of open source software: A review and categorisation