Open Source Software Business Models and Customer Involvement Economics

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 ebusiness, 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.