Business Models in Open Source Software Value Creation

Abstract

This chapter explores how the use of a business model enables value creation in the open source software (OSS) environment. We argue that this value can be attained by analyzing the value creation logic and the elements of potential business models emerging in the OSS environment, since profitable business is all about creating value and capturing it properly. Open source (OS) offers one possibility for firms that are continuously finding new opportunities to organize their business activities and increase the amount of value they appropriate according to their capabilities. Furthermore, the concept of a business model is considered a tool for exploring new business ideas and capturing the essential elements of each alternative. We propose that a general business model is also applicable in the context of OSS, and we provide a list of questions that may help managers deal with OSS in their businesses.

Key Terms in this Chapter

Value Network: Three or more organizations strategically collaborate to create superior value to the end-customer.

Core Competency: The set of skills that an organization must perform well in order for the organization to be successful in comparison with its rivals.

Competitive Strategy: How a firm attracts customers, withstands competitive pressures, and strengthens the firm’s market position.

Value Chain: The generic value-adding activities of an organization that provide an analysis tool for strategic planning.

Business model: A tool for exploring new business ideas and capturing the essence of each alternative.