Business strategies in open source software industry

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For many years, proprietary software has been the dominating business approach used by the commercial software firms. Industry giants like Microsoft proved this strategy to be successful, building their multibillion dollar empires based on the proprietary software platform. Over the past decade, a new business approach called open source model which involves contributors from around the globe to create, share and distribute software code for free had come into practice (Pal, N & Madanmohan, TR., 2002).

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Although the roots to this practice of sharing code evolved since early 60s, the widespread usage of internet and the technology developments in past two decades opened new opportunities for open source projects (CNET news, 1998). A number of Open Source Software (OSS) products such as Apache web server, BIND and SendMail have dominated their product categories ever since then (Pal, N & Madanmohan, TR., 2002).

In the past decade, several researchers (Wheeler, DA., 2007; Mockus, et al., 2000) have taken interest in studying how open source can be applied to modern business strategies. However, a concern exists that in this area of study that there is no substantial evidence that the practices followed are effective in the business environment (Bitzer & Schröder, 2004). For economists like Lerner & Tirole (2000), the altruism shown by commercial companies and programmers involved in an open source software project is surprising. They stated altruism hasn’t played a major role in any other industry than software. Several others like Freeman & Rogers (2008) and Goetz (2003) contradict this statement by illustrating altruism exist in any industry provided there is proper exposure of the problem towards the contributing community. But most of the researches surrounding open source model considered software industry as the base for their studies.


1.1 Objective

This project work focuses on the study of the Open Source ecosystem( Android ) how it differs from Closed source sustems such as those surrounding the iPhone. This project includes the study of the Android Market, (online mobile application store for Android users) application developers, and which factors developers consider for selecting a platform for application development. To understand business strategy development trends across Android and iPhone platforms, we compared the Android market with the iPhone App Store, the leading application store in current mobile market. Apple launched an online application marketplace called the “iPhone App Store” before launching iPhone 3G. Currently, this store has more than 195,000 applications. To match or surpass the success of iPhone App Store, Apple rivals such as Google and Blackberry introduced their own application downloading stores called “Android Market” and “Blackberry App World” respectively. The Android Market is similar to the

iPhone App Store or to any other application store;

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