Open Source Software Business Models and Customer Involvement Economics

Open Source Software Business Models and Customer Involvement Economics

Christoph Schlueter Langdon (Center for Telecom Management, University of Southern California, USA) and Alexander Hars (Inventivio GmbH, Bayreuth, Germany)
DOI: 10.4018/978-1-59140-999-1.ch040
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Abstract

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.

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