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Purpose: A growing number of open source software emerges in many segments of the software market. In addition, software products usually exhibit network externalities. The purpose of this paper is to study the impact of open source software on the quality strategies of proprietary software vendors when the market presents positive network externalities. Design/methodology/approach: To analyze how open source software affects the quality of proprietary software, this paper constructs two vertical differentiation models: the basic model considers proprietary software monopolizing the market, and the extended model considers proprietary software competing with open source substitute. Findings: This paper mainly finds that the presence of open source software does not necessarily lead to the improvement of proprietary software quality. The network externalities and the compatibility between open source and proprietary software can change the impact of open source software on the quality of proprietary software and affect the quality strategies of proprietary software vendors under certain conditions. Originality/value: The main contribution of this paper is to examine the effect of open source software on the quality strategies for proprietary software vendors in software markets with network externalities.

The paper analyzes the strategies of software firms that have entered the open source (OS) field. The notion of the OS business model is discussed in the light of a substantial body of theoretical literature concerning strategic management and the economics of innovation, as well as specialized literature on OS. Empirical evidence based on a survey of 146 Italian software firms shows that firms have adapted to an environment dominated by incumbent standards by combining the offering of proprietary and OS software under different licensing schemes, thus choosing a hybrid business model. The paper examines the determinants of the degree of openness toward OS and discusses the stability of hybrid models in the evolution of the industry.

In the software industry, commercial open-source software vendors have recognized that providing services to help businesses derive greater value in the implementation of open source–based systems can be a profitable business model. Moreover, society may greatly benefit when software originators choose an open-source development strategy as their products become widely available, readily customizable, and open to community contributions. In this study, we present an economic model to study how software licensing attributes affect a software originator’s decisions, aiming to provide policy makers with insights into how welfare-improving, open-source outcomes can be incentivized. We show that when a competing contributor is apt at reaping the benefits of software development investment, a less restrictive open source license (e.g., Berkeley Software Distribution, or BSD style) can improve welfare. On the other hand, when the originator is better at leveraging investment and service costs are high, a more restrictive license (e.g., General Public License, or GPL style) can be best for social welfare even when a contributor can cost-efficiently develop the software. The online appendix is available at https://doi.org/10.1287/isre.2017.0726 .

Open-source software poses a serious challenge to proprietary software vendors. \"Lock in customers\" seems a tempting strategy for proprietary software vendors, who attempt to lock in customers by creating switching costs. This paper examines whether such a lock-in strategy will indeed benefit proprietary software vendors facing competition from open-source software, who can credibly commit future prices. Developing a two-period duopoly model in which software products are differentiated and customers are heterogeneous, we find that the lock-in strategy is actually counterproductive in competing against open-source software. In fact, giving customers the freedom of choice may end up benefiting the proprietary software vendor. In terms of the broader effect, we find that lock-in reduces overall social welfare, but certain customers may actually be better off with it. Finally, we show that the lock-in strategy works differently for different types of customers in the software market (i.e., foresighted versus myopic customers). This suggests that customer behavior could significantly alter the equilibrium strategy of software vendors. [PUBLICATION ABSTRACT]

Unmanned aerial vehicle (UAV) systems are heavily adopted nowadays to collect high-resolution imagery with the purpose of documenting and mapping environment and cultural heritage. Such data are currently processed by programs based on the Structure from Motion (SfM) concept, coming from the computer vision community, rather than from classical photogrammetry. It is interesting to check whether some widely accepted rules coming from old-fashioned photogrammetry still holds: the relation between accuracy and ground sampling distance (GSD), the ratio between the vertical and horizontal accuracy, accuracy estimated on ground control points (GCPs) vs. that estimated with check points (CPs) also in relation to their ratio and distribution. To face the envisaged aspects, the paper adopts a comparative approach, as several programs are used and numerous configurations considered. The paper illustrates the dataset adopted, the carefully tuned processing strategies and bundle block adjustment (BBA) results in terms of accuracy for both GCPs and CPs. Finally, a leave-one-out (LOO) cross-validation strategy is proposed to assess the accuracy for one of the proposed configurations. Some of the reported results were previously presented in the 5th GISTAM Conference.

Previous literature on open source software (OSS) mostly analyzes organizational issues within communities of developers and users. This paper focuses on for-profit organizations that release software products under OSS licenses, and argues that variations in their endowments of intellectual property rights, namely patents and trademarks, help to determine which firms will tend to incorporate OSS into commercial products. We explain whether and under what conditions preexisting stocks of intellectual property rights can be useful complementary assets that allow firms to benefit directly or indirectly from commercializing OSS products, and test our hypotheses on a novel data set built on firms' announcements of OSS product releases in the specialized press between 1995 and 2003. We find three robust results: (a) firms with large stocks of software patents are more likely to release OSS products; (b) firms with large stocks of software trademarks are less likely to release OSS products; (c) firms with large stocks of hardware trademarks are more likely to release OSS products.

PurposeIn South Africa, public institutions face challenges in transitioning their digital records to trusted digital repositories due to a deficiency in skills, infrastructure and systems. Free and open-source software (FOSS) presents a viable solution for facilitating the transfer of digital archives for permanent preservation. Despite the existence of FOSS policy in South Africa, the public sector has yet to fully use it to engage in the development and implementation of products for records management and archive preservation using open-source software. This study aims to explore the ingestion of digital archives into an approved long-term storage system through FOSS in South Africa with the view of developing a framework.Design/methodology/approachThe study adopted a qualitative research approach to collect data through interviews with purposively selected participants (records managers, archivists and IT officials) from national government departments that have implemented records management systems for digital curation of archives, as well as the National Archives and Records Services of South Africa (NARSSA), which regulates archives and records management, and the State Information Technology Agency, which regulates information technology in government.FindingsThe findings of the study suggest that the systematic transfer of digital materials from public entities to NARSSA, as required by statute, has not taken place.Research limitations/implicationsThe study specifically targeted national government departments that have implemented digital archives and records management systems. Consequently, perspectives from departments that have not implemented these solutions were excluded.Originality/valueA framework is proposed for the transfer of digital archives, using interoperable FOSS, from government agencies responsible for records management to NARSSA for archival preservation. This framework, it is hoped, will facilitate infrastructure and skills development in the management of records and preservation of archives through open platforms.

This paper analyzes a dynamic mixed duopoly in which a profit-maximizing competitor interacts with a competitor that prices at zero (or marginal cost), with the cumulation of output affecting their relative positions over time. The modeling effort is motivated by interactions between Linux, an open source operating system, and Microsoft's Windows and consequently emphasizes demand-side learning effects that generate dynamic scale economies (or network externalities). Analytical characterizations of the equilibrium under such conditions are offered, and some comparative static and welfare effects are examined.

There are two puzzles in the software competition literature: whether both proprietary and open source software will survive and how producers of proprietary software differentiate themselves from open source competition. I address both puzzles by analyzing competition between a firm producing proprietary software and a community producing open source software. If the firm faces no competition, then the software caters to less technologically savvy individuals. When facing competition, the open source software caters to the most technologically savvy individuals, leading the firm to target even less savvy individuals than it would when acting as a monopolist in order to differentiate its software from the open source option. The open source movement, then, may not be an unalloyed success as the growth in open source can be tied to deterioration in the proprietary software. Given that both types of software survive by catering to different segments of the market, an important avenue for research will be to analyze the stability of the underlying segments and the corresponding welfare implications.

This paper analyzes the strategic incentives of a proprietary software (PS) firm to manipulate software copy protection in response to the diffusion of pirate proprietary software (PPS) copies, as well as software compatibility/incompatibility with an alternative open source software (OSS) solution. We show that the existence of software piracy enables the PS firm to achieve higher profits than when piracy is prevented. A key mechanism at work is that investing in software copy protection allows the PS firm to increase the price of its PS product. From a regulatory point of view, we find that software compatibility with the OSS solution is a necessary condition to achieve a welfare-improving equilibrium, whereas the welfare-enhancing feature of piracy is not always proved.