Entry Strategies Under Competing Standards: Hybrid Business Models in the Open Source Software Industry

The paper analyzes the strategies of software firms that have entered the open source (OS) field. The notion of the OS business model is discussed in the light of a substantial body of theoretical literature concerning strategic management and the economics of innovation, as well as specialized literature on OS. Empirical evidence based on a survey of 146 Italian software firms shows that firms have adapted to an environment dominated by incumbent standards by combining the offering of proprietary and OS software under different licensing schemes, thus choosing a hybrid business model. The paper examines the determinants of the degree of openness toward OS and discusses the stability of hybrid models in the evolution of the industry.