A TAXONOMY OF CLOSED AND OPEN SOURCE SOFTWARE INDUSTRY BUSINESS MODELS

This paper explores the closed source/open source software model dialectic and presents a conceptual framework of an emerging "both source" software business model useful for formulating firm technology strategy. The author reviews the academic literature and popular business press, extracting definitions and concepts underlying these software models; explains the concept of a business model and makes the case for the knowledge-based view of the firm as the approach to software industry business model development; describes, in detail, the proprietary, open source and "both source" software models; identifies the primary motivations behind the managerial development and adoption of the "both source" business software model (cost containment) and the implementation challenges firm's face (an upsurge in copyright and patent infringement suits concerning adoption of open source code); and concludes with a series of research questions pertaining to the economic viability of open source license business models, the effectiveness of indemnification strategies against copyright and patent infringement, and the managerial motivations behind choosing patent over copyright protection of software inventions.