Integrating External Workforce with Business Model Innovation

Abstract:     
Software product industry is evolving in a radical manner where its key resources and key processes are getting obsolete rapidly owing to the fast rate of technological innovations. Therefore, for organizations in software product industry, changing the business model itself provides an avenue to remain competitive as imitating business models in harder for other players. This phenomenon where a firm alters one or more dimensions of its business model to attain certain competitive benefits is termed as business model innovation. With concurrent growth of open source software phenomenon and its apparent benefits for both software development and software dissemination, software product firms are using OSS as a vehicle for business model innovation. However, as current literature on OSS is silent on this issue, there is little understanding on what are the different phases of business model innovation done through OSS. In this study we use empirical findings from three case studies of OSS products and amalgamate these with insights from network effect and transaction cost economics to provide a new theoretical framework for understanding different phases of business model innovation achieved using OSS. The proposed model also outlines possible relationships between these phases.

working papers series