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Abstract:
The paper discusses three key economic problems raised by the emergence and diffusion of Open source software: motivation, coordination, and diffusion under a dominant standard. First, the movement took off through the activity of a software development community that deliberately did not follow profit motivations. Second, a hierarchical coordination emerged without the support of an organization with proprietary rights. Third, Linux and other open source systems diffused in an environment dominated by established proprietary standards, which benefited from significant increasing returns. The paper shows that recent developments in the theory of critical mass in the diffusion of technologies with network externality may help to explain these phenomena.

Open Source, Diffusion, Network Externality

Abstract:
During the '60s and the '70s, basically all software was Open Source and everyone was allowed to copy, modify and redistribute computer programs.

When software ceased to be hardware-specific and the diffusion of computers took off, firms started to produce software independently from hardware and to protect their code through intellectual property rights. At present, a turnaround is taking place: the Open Source production mode is spreading across the software industry and, in some cases, it performs even better than the traditional proprietary one.

Although a growing body of literature is analyzing Open Source software (OSS) issues, there is still lack of empirical data on the phenomenon, and little is known about firms that enter the software industry by producing under the Open Source license scheme (Open Source firms). This paper is a contribution to fill this gap and focuses on the business models of these firms. We find significant heterogeneity among them, in particular many agents supply both proprietary and Open Source software. We present a model of adoption that studies the intra-firm diffusion of the new paradigm. Explanatory hypotheses are discussed analyzing how the characteristics of the Open Source production mode and of network externalities in software demand shape the strategies of firms that entered the OSS field.

Open Source business models, Open Source firms, adaptive strategies, network externalities

Abstract:
Contrary to what most people assume, Open Source doesn't just mean access to the source code. A software is considered Open Source if and only if its distribution terms [i.e. the license] comply with the set of criteria defined by the Open Source Definition (OSD). That is, to say that a code is Open Source is to say that it is subject to a member of a particular category of licenses (McGowan, 2000).

As many others in the Open Source field, the research on Open Source licenses suffers from lack of empirical data. Although in the literature there are empirical studies that explore the relationships between license choice and project characteristics (Lerner and Tirole, 2002a), at present we are not aware of surveys that collect data on licensors, that is on firms producing and distributing software on an Open Source basis. This study addresses his shortcoming. We examine the license choice of the firms that supply Open Source products and services and relate it to their structural characteristics, business models and attitudes towards the movement and its community.

Between September 2002 and March 2003 we conducted a survey on Italian firms that do business with Open Source software. We asked them to indicate the Open Source licenses with which they work, for the distribution of their software as well as the production process. We made reference to the distinction between copyleft and non-copyleft distribution schemes. Using these data, this paper aims at testing several theoretical hypotheses advanced by the literature on Open Source licenses. In order to make the discussion more lively, for each issue we present the hypothesis and our findings in sequence.

Open Source, Licenses, Copyleft, Open Source firms

Abstract:
A growing body of economic literature is addressing the incentives of the individuals that take part to the Open Source movement. However, empirical analyses focus on individual developers and neglect firms that do business with Open Source software (OSS). During 2002, we conducted a large-scale survey on 146 Italian firms supplying Open Source solutions in Italy. In this paper our data on firms' motivations are compared with data collected by the surveys made on individual programmers. We aim at analysing the role played by different classes of motivations (social, economic and technological) in determining the involvement of different groups of agents in Open Source activities.

Abstract:
Several empirical studies highlight severe disparities among geographical areas in the diffusion of ICT that affect not only developed vs. developing countries (Global Digital Divide) but also regions within the same country (Local Digital Divide). Economic scholars have investigated the determinants of these disparities but comprehensive conclusions are far to be reached. This paper contributes to the literature by modelling the level of ICT diffusion at the Italian regional level (NUT3) using spatial econometric techniques. Namely, two main research questions are addressed: (i) do Italian regions exhibit significant differences in their patterns of ICT diffusion? (ii) if so, how local structural specificities interact with spatial effects in explaining these disparities? According to recent approaches in the metrics of ICT, the empirical analysis uses domain name registrations by firms in 2001 as a proxy of ICT diffusion at the local level. The results show that sectoral composition, technological endowment and absorptive capacity at the regional level, as well as firms' characteristics, do play a crucial role. In addition, pure spatial effects contribute to regional disparities.

Digital divide, ICT diffusion, spatial econometrics

Abstract:
Stallman proposed a revolutionary idea in 1984 with the "Free Software Foundation", subsequently confirmed in 1998 in the "Open Source Definition". The key concept is that there should be unrestricted access to computer programming codes: anyone should be able to use and modify them and circulate such modifications without having to pay any licence fee.

The first urgent question is therefore the one clearly put by Glass (1999, 104): "I don't know who these crazy people are who want to write, read and even revise all that code without being paid anything for it at all". The issue is undoubtedly challenging and computer scientists, sociologists, psychologists and economists show interest in the motivations that lay at the basis of the participation in the Open Source movement. A growing body of economic literature has been addressing the problem since when the phenomenon went out from universities and research centres and became "tremendously successful" (Lerner e Tirole, 2001, 819) creating new and often lucky business models.

A growing body of economic literature is addressing the incentives of the individuals that take part to the Open Source movement. However, empirical analyses focus on individual developers and neglect firms that do business with Open Source software (OSS). During 2002, we conducted a large-scale survey on 146 Italian firms supplying Open Source solutions in Italy. In this paper our data on firms' motivations are compared with data collected by the surveys made on individual programmers. We aim at analysing the role played by different classes of motivations (social, economic and technological) in determining the involvement of different groups of agents in Open Source activities.

Open Source developers, Open Source firms, incentives

Abstract:
The decision to adopt e-commerce technology depends on a variety of variables. This paper explores the relative importance of structural firm-specific variables, the intrinsic value of the technology, expectations concerning the evolution of the technology, and the adoption behaviour of other agents. Almost all variables pertaining to the conventional structure of firms, including size, and the value of technology, are found to have no importance in the adoption decision, whereas the expected number of other adopters are found to have a positive effect. Moreover, the smaller the percentage of adopters considered to be the threshold beyond which the firm will adopt (critical mass), the higher the probability of adoption.

E-commerce, Adoption of new technology, Network Externality, Internet, Logit Regression Models

Abstract:
A growing body of economic literature is exploring the incentives of the agents involved in the Open Source movement. However, most empirical analyses focus on individual developers and neglect firms that do business with Open Source software (Open Source firms). This paper contributes to the literature by providing empirical evidence on the incentives of firms that engage in Open Source activities. Data on firms' motivations were collected by a large-scale survey conducted on 146 Italian companies supplying Open Source (OS) solutions and show that intrinsic, community-based incentives do play a role. Nevertheless, these positive attitudes towards the values of the OS community, which are quite surprising by profit-oriented firms, are not in general put into practise. Discrepancy between attitudes and behaviours is a widely investigated phenomenon in social psychology literature. We explore its pattern in our sample, find that it does not concern all the respondents, and single out a group of firms adopting a more consistent behaviour. Our results are in line with the literature on individual motivations in organisations and Open Source business models.

Open Source firms, motivations, discrepancy between attitudes and behaviours

Abstract:
This paper studies the contributions to Open Source projects of software firms. Our goal is to analyse whether they follow the same regularities that characterize the behaviour of individual programmers.

An exhaustive empirical analysis is carried out using data on project membership, project coordination and contribution efforts of 146 Italian firms that do business with Open Source software.

We follow a meta-analytic approach comparing our findings with the results of the surveys conducted on Free Software programmers. Moreover, the availability of the data gathered by Hertel et al. (2003) on 141 developers of the Linux kernel will allow direct comparisons between the two sets.

Open Source projects common pool resources

Abstract:
The Open Source (OS) software has progressively gained economic importance in recent years, and more and more commercial firms are getting involved, to various extents, in the OS movement. While a number of studies have investigated motivations and business models of OS-based software companies, very few works have examined whether and how firms actively participate to open projects.

This paper contributes to the literature by providing empirical evidence on the role and the activities of software houses in community developed projects. The research also proposes an original methodology of large-scale primary data collection from OS project repositories and linked Web sites. The findings show how different today's OS movement is from its origins and how important firm involvement has become, not only numerically but also for the deepness of its impact on community projects. Finally, further research developments are suggested.

Open Source projects, collective action, Open Source firms

Abstract:
The issue of innovation processes taking place in the software sector is currently widely debated. Challenging questions arise about what products/services have to be considered innovative, and whether a specific artefact is innovative or not. In this framework, the widespread success of the Free/Open Source Software (FOSS) put forward new research issues, dealing with whether and how programs developed according to the new production paradigm turn out to be more innovative than traditional ones. In this framework, this paper aims at contributing to the literature by addressing three main research questions: (i) are software solutions produced by Small and Medium Enterprises (SMEs) innovative? (ii) What kinds of innovations are implemented? And, finally, (iii) are programs based on FOSS more innovative than proprietary ones?

Basing on a sample of 134 software solutions produced by Italian SMEs and using an original methodology to asses the problem of evaluating innovation in the software field, we provides some first insights of what emerges if we set aside the traditional innovation indicators and endower to build alternative metrics, specifically developed to target the complexity of the innovation processes in the software markets.

Innovation, Free/Open Source software, proprietary software