The Business of
OPEN SOURCE
Tracking the changing competitive conditions of
the software industry.

In his discourse comparing various economic systems, Schumpeter [ 5] declares it is new products, new markets, and new forms of production and distribution that impel the creative destruction engine of free enterprise. Entrepreneurs strategically weave an organizational design of customer value, product offering, and production and distribution technologies that enables them to compete with, and often displace, existing organizations. Customers decide whether to accept the new firm’s offerings based on their perceptions of value.

Open source software (OSS) appears to be creative destruction in action: all three of the components that fuel the destructive fire are evident. There is an abundance of new and innovative products emerging from the OSS community. The zero-cost licensing structure of most open

By Richard T. Watson, Marie-Claude Boudreau,
Paul T. York, Martina E. Greiner, and Donald Wynn, Jr.