This chapter is focused on the business economics of open source. From a strategic perspective, open source falls into a category of business models that generate advantages based on customer and user involvement ( CUI). While open source has been a novel strategy in the software business, CUI-based strategies have been used elsewhere before. Since the success of e-commerce and e-business, CUI-based strategies have become far more prevalent for at least two reasons: Firstly, advances in information technology and systems have improved feasibility of implementation of CUI strategies and secondly, CUI-based economics appear to have often become a requirement for e-business profitability. This chapter presents a review of CUI-based competition, clearly delineates CUI antecedents and business value consequences, and concludes with a synopsis of managerial implications and a specific focus on open source.
Key Terms in this Chapter
IT Business Value: Captures the business value derived from investments in information technology components and systems. Generic IT business value categories include cost, revenue, and quality.
Customer Relationship Management (CRM): A broad term to cover concepts, methods, and procedures, and enabling information technology infrastructure that support an enterprise in managing customer relationships.
Business Intelligence Analytics: Summarizes models and methods used to analyze data for the purpose of helping executives make better, more precise decisions.
Peer-to-Peer Production: Describes work performed and organized through the free cooperation of equals.
Co-Production: Has evolved to describe a situation in which people outside paid employment, such as customers, contribute to business value-added.
Customer and User Involvement: Describes the extent to which a customer is engaged as a participant in business operations, specifically in service production and delivery, including, for example, order processing and account management.
Business model: Describes how profit is generated; captures business logic by separating independent/dependent variables and mediating/moderating effects.