An Economic Analysis of Enterprise Adoption of Open Source Software

28 Pages Posted: 4 Dec 2005

See all articles by Mingdi Xin

Mingdi Xin

Merage School of Business, University of California, Irvine

Evangelos Katsamakas

Gabelli School of Business, Fordham University

Date Written: October 2005

Abstract

The emergence of open source and Linux has burdened IT managers with the challenge of whether, when, and in what applications to adopt open source software in their firms. We characterize the conditions under which enterprises adopt open source software. We show that adoption depends crucially on network effects, the fit of software with the range of applications used by each firm, and the IT capabilities of a firm. Our model predicts that most firms will adopt a heterogeneous IT architecture that consists of open source and proprietary software. The equilibrium adoption is often socially inefficient. This is the first paper in the open source literature to model the enterprise adoption of open source.

Keywords: Open source software, Linux, IT management, IT architecture, IT capabilities, technology adoption

Suggested Citation

Xin, Mingdi and Katsamakas, Evangelos, An Economic Analysis of Enterprise Adoption of Open Source Software (October 2005). NET Institute Working Paper No. 05-29, Available at SSRN: https://ssrn.com/abstract=851306 or http://dx.doi.org/10.2139/ssrn.851306

Mingdi Xin (Contact Author)

Merage School of Business, University of California, Irvine ( email )

4293 Pereira Drive
Irvine, CA 92697
United States

Evangelos Katsamakas

Gabelli School of Business, Fordham University ( email )

140 West 62nd Street
New York, NY 10023
United States

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