Open Source or Closed Source? A Competitive Analysis with Software Security

2020 ◽  
Vol 17 (1) ◽  
pp. 56-73
Author(s):  
Xing Gao
Keyword(s):  
Open Source ◽  
Business Model ◽  
Business Models ◽  
Software Security ◽  
The Other ◽  
Theoretic Model ◽  
Software Products ◽  
Game Theoretic ◽  
Security Concerns ◽  
Closed Source

Software security is an increasingly serious concern for users and ultimately impacts software firms’ choice of open source or closed source business models. However, the studies in this area are scarce, if not absent. This paper examines whether a software firm chooses open source or closed source in a competitive market when software security is taken into account. I construct a game-theoretic model in which two competitive firms first formulate their business models and then charge their prices for software products. I find that due to security concerns, two symmetric firms may choose a heterogeneous business model, in which one firm chooses open source and the other chooses closed source when the return of open source remains moderate. The two symmetric firms may be trapped in a prisoner’s dilemma with a moderate-high return of open source in which their equilibrium choices of business model, open source, lead to lower profits than when they switch to closed source. For two asymmetric firms in which only one has security concerns in its software products, I reveal that with a moderate return of open source, this firm follows closed source and the other without security concern employs open source. Interestingly, there never exists the other heterogeneous business model in equilibrium.

scholarly journals THE WORLD DEVELOPMENT OF THE DIGITAL ECONOMY: THE MAIN DEVELOPMENT STRATAGEMS

2021 ◽  
Vol 2 (1) ◽  
pp. 91-96
Author(s):  
Olena Taranukha
Keyword(s):  
Business Model ◽  
Business Models ◽  
New Technologies ◽  
Technology Development ◽  
Well Being ◽  
Digital Economy ◽  
The Other ◽  
Innovative Solutions ◽  
The World ◽  
New Business

The digital economy allows to compose the new business models, digital platforms and services, which create new types of economic activity, as well as the transformation of traditional industries. Due to the industries transformation to the digital economy there is the transformation of the world economy, or rather the economy itself is being digitized The purpose of the paper is to reveal the essence and features of the digital economy formation and to consider what significant transformations will take place in the world by the analysis of major trends in the near future. Accumulating all the concepts, we can say that the digital economy is the rather complex term, but we can assume that its development is based on the key components According to forecast estimates, the most advanced retail companies will begin implementing the service of virtual and voice search of goods by 2022. This will require from the company the better understanding of the consumers wishes, their interests and intentions. Consider the main technological development trends for 2020-2025 based on the data of the major consulting agencies and the consulting company "Cartner" Figure 2 shows the forecast curve of the new technologies development. Innovative development triggers that will actively influence the technology development include the following: the Authenticated Provenance, Low-Cost Single Board Computers at the Edge, Self-Supervised Learning, BMI (Brain Machine Interface), active development of "Packaged Business Capabilities" services, Digital Twin of the Person and Composible Enterprises. The peak of disappointments will be Social Distancing Technologies and Secure Access Service. The source of expectations will be the development of Carbon-Based transistors technology and Human digital Ontologies. The formation of a productivity platform will be based on trends in Self-Development and Self-Education. Digital IT trends grow, evolve and acquire new properties of social technologies that can influence the structure of the community, form dependencies and demand. Therefore, companies, large corporations and government need to move to more flexible composite business architectures. The modular business model is based on four basic principles: modularity, efficiency, continuous improvement and adaptive innovation. This business model allows to move from rigid traditional planning to a flexible response to rapidly changing business needs. In general, it creates opportunities for innovative approaches, reduces costs and improves partnerships. It is important to pay attention to the other technologies in the new business model such as bundled business services, data factories, private 5G networks and embedded artificial intelligence. Thus, as a result of the research it is proved that the digital world is a completely new order of life, which requires to change our thinking. The person should be always focused on the new technologies and methods in order the enterprises remain competitive and constantly developed, it will promote the economy development and the growth of well-being of the society. So, taking into account the global trends in technology development, Ukraine has to adapt to the new standards quickly and implement innovative solutions for the economic development. The digitalization of the economy, on the one hand, is the key to economic success, on the other hand, it is the driving force in the conditions of the conceptual understanding of the digital economy essence. The growth of the quality and innovation level of domestic goods and services should provide not only sustainable economic growth, but also competitive advantages with further integration into the EU. At the same time, there is the relevant need of the scientific and technological research, the formation of a certain business ("digital") culture, the implementation of smart city ideas in Ukraine based on the development of local communities and the emergence of new initiatives and proposals for innovative solutions.

Your winning business model agenda: four questions to shape growth

2018 ◽  
Vol 46 (4) ◽  
pp. 21-27 ◽  
Author(s):  
Vladyslav Biloshapka ◽  
Oleksiy Osiyevskyy
Keyword(s):  
Business Model ◽  
High Performance ◽  
Design Methodology ◽  
Business Models ◽  
Scale Up ◽  
The Other ◽  
Content Type ◽  
Current State ◽  
Growth Planning ◽  
Practical Implications

Purpose Defines clear steps for growth planning that support answers to the crucial question: How and where are you planning to scale up the business and what talent do you need to implement this? Design/methodology/approach As the “Business model value matrix” shows, having ‘happy customers’ is only one determinant of a business model’s success. The other essential block of diagnostic questions deals with the current state and prospects of the firm’s growth. Findings We found that companies that have found ways to keep their business models in a winner’s state can provide clear, evidence-based answers to questions about growth opportunities and risks, while their less successful peers have difficulty addressing the issues. Continuous collecting and analyzing of this information allows successful companies to embrace the strategy-as-learning model of development, built around active learning and proactive adjustment to evolving environment. Practical implications To develop a strategy for moving to and sustaining the Winner state, managers must clearly articulate and test a set of hypotheses about the mechanisms of their company’s growth. The first step on this path is related to obtaining a clear view on the factors that underpin the current financial performance. Originality/value High-performance cultures make sure that each manager has the clear answers to the questions of value, growth and digitization in order to learn, experiment and implement the company business model agenda. The unproductive cultures, on the other hand, are sustained by managerial teams that usually do not have the answers to these crucial questions, but are very good at political games.

Developing Business Model with Open Source Enterprise Resource Planning

2013 ◽  
pp. 52-63
Author(s):  
Swanand J. Deodhar ◽  
Kulbhushan C. Saxena ◽  
Rajen K. Gupta ◽  
Mikko Ruohonen
Keyword(s):  
Software Development ◽  
Open Source ◽  
Business Model ◽  
Enterprise Resource Planning ◽  
Business Models ◽  
Resource Planning ◽  
Business Applications ◽  
Business Application ◽  
Erp Software ◽  
Software Licensing

Open source approach to software development has been used to develop the so-called ‘horizontal infrastructure’ software such as databases and application servers. However, there is an increasing acceptance of open source approach for developing business applications like enterprise resource planning (ERP) software. Indeed, organizations are building business models around ERP and similar business application developed using open source. In this chapter, the authors analyze the business model of one such open source ERP and explain increasing importance of software licensing and partner networks in FOS-ERP business models.

A University of Greenwich Case Study of Cloud Computing

2015 ◽  
pp. 1140-1161 ◽  
Author(s):  
Victor Chang ◽  
Gary Wills
Keyword(s):  
Cloud Computing ◽  
Supply Chain ◽  
Business Model ◽  
Business Models ◽  
The Other ◽  
Added Value ◽  
It Services ◽  
Success Criteria ◽  
The University

This chapter proposes a new Supply Chain Business Model in the Education domain and demonstrates how Education as a Service (EaaS) can be delivered. The implementation at the University of Greenwich (UoG) is used as a case study. Cloud computing business models are classified into eight Business Models; this classification is essential to the development of EaaS. A pair of the Hexagon Models are used to review Cloud projects against success criteria; one Hexagon Model focuses on Business Model and the other on IT Services. The UoG case study demonstrates the added value offered by Supply Chain software deployed by private Cloud, where an Oracle suite and SAP supply chain can demonstrate supply chain distribution and is useful for teaching. The evaluation shows that students feel more motivated and can understand their coursework better.

Developing Business Model with Open Source Enterprise Resource Planning

2012 ◽  
pp. 72-83
Author(s):  
Swanand J. Deodhar ◽  
Kulbhushan C. Saxena ◽  
Rajen K. Gupta ◽  
Mikko Ruohonen
Keyword(s):  
Software Development ◽  
Open Source ◽  
Business Model ◽  
Enterprise Resource Planning ◽  
Business Models ◽  
Resource Planning ◽  
Business Applications ◽  
Business Application ◽  
Erp Software ◽  
Software Licensing

Open source approach to software development has been used to develop the so-called ‘horizontal infrastructure’ software such as databases and application servers. However, there is an increasing acceptance of open source approach for developing business applications like enterprise resource planning (ERP) software. Indeed, organizations are building business models around ERP and similar business application developed using open source. In this chapter, the authors analyze the business model of one such open source ERP and explain increasing importance of software licensing and partner networks in FOS-ERP business models.

How do Open Source software companies respond to institutional pressures? A business model perspective

2017 ◽  
Vol 30 (4) ◽  
pp. 534-554
Author(s):  
Khaireddine Mouakhar ◽  
Albéric Tellier
Keyword(s):  
Open Source ◽  
Business Model ◽  
Open Source Software ◽  
Business Models ◽  
Institutional Environment ◽  
Institutional Pressures ◽  
Strategic Choices ◽  
Content Type ◽  
Software Companies ◽  
Key Resources

Purpose Open Source software companies (OSSCs) are confronted with institutional pressures from Open Source software (OSS) communities. They must find an acceptable balance between the expectations of these communities and their own business model. However, there are still few studies that try to analyse the OSSC business models. The purpose of this paper is to highlight OSSC typical business models by using rich empirical data. Design/methodology/approach The methodology is based on a combination of quantitative analysis of a sample of 66 OSSCs and qualitative analysis of three typical situations resulting from that sample. Findings The quantitative study enables the authors to highlight three typical business models. The in-depth study of three typical cases enables the authors to specify these OSSC business models. The authors can distinguish four key dimensions: the relationship developed with the OSS communities, the strategic manoeuvres made, the key resources and competitive positioning. Research limitations/implications The results indicate that it is possible for firms to accommodate both profit and non-profit logics using different strategic manoeuvres to position themselves with regard to the Open Source institutional environment. Such accommodation requires the development of key resources and the adoption of suitable competitive positioning. Practical implications This study allows the authors to highlight two main practical contributions for OSSCs’ directors. First, the different manoeuvres identified may help them to ensure coherence between their strategic choices and the business model chosen. Second, the results can help OSSC founders identify value creation mechanisms more clearly by analysing four key variables. Originality/value This paper provides new insight about OSSCs business models. It aggregates four dimensions that provide a more “fine-grained” analysis of business models, while other studies often emphasise one dimension (usually the regime of appropriability).

scholarly journals The Economics of Open Source Software: A Survey of the Early Literature

2002 ◽  
Vol 1 (1) ◽  
Author(s):  
Aaron Schiff
Keyword(s):  
Open Source ◽  
Open Source Software ◽  
Business Models ◽  
Recent Literature ◽  
Future Research ◽  
Research Directions ◽  
Early Literature ◽  
Future Research Directions ◽  
Closed Source

This paper reviews the recent literature on the economics of open source software. Two different sets of issues are addressed. The first looks at the incentives of programmers to participate in open source projects. The second considers the business models used by profit-making firms in the open source industry, and the effects on existing closed source firms. Some possible future research directions are also given.

Hobbes's State of Nature: A Modern Bayesian Game-Theoretic Analysis

2015 ◽  
Vol 1 (3) ◽  
pp. 485-508 ◽  
Author(s):  
HUN CHUNG
Keyword(s):  
Game Theory ◽  
The State ◽  
The Other ◽  
Theoretic Model ◽  
Theoretic Analysis ◽  
Bayesian Game ◽  
Game Theoretic Analysis ◽  
State Of Nature ◽  
Game Theoretic ◽  
Game Theoretic Model

ABSTRACT:Hobbes's own justification for the existence of governments relies on the assumption that without a government our lives in the state of nature would result in a state of war of every man against every man. Many contemporary scholars have tried to explain why universal war is unavoidable in Hobbes's state of nature by utilizing modern game theory. However, most game-theoretic models that have been presented so far do not accurately capture what Hobbes deems to be the primary cause of conflict in the state of nature—namely, uncertainty, rather than people's egoistic psychology. Therefore, I claim that any game-theoretic model that does not incorporate uncertainty into the picture is the wrong model. In this paper, I use Bayesian game theory to show how universal conflict can break out in the state of nature—even when the majority of the population would strictly prefer to cooperate and seek peace with other people—due to uncertainty about what type of person the other player is. Along the way, I show that the valuation of one's own life is one of the central mechanisms that drives Hobbes's pessimistic conclusion.

Frenemies in Platform Markets: Heterogeneous Profit Foci as Drivers of Compatibility Decisions

2020 ◽  
Vol 66 (6) ◽  
pp. 2432-2451 ◽  
Author(s):  
Ron Adner ◽  
Jianqing Chen ◽  
Feng Zhu
Keyword(s):  
Information Systems ◽  
Social Welfare ◽  
The Other ◽  
Theoretic Model ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Difference

We study compatibility decisions of two competing platform owners that generate profits through both hardware sales and royalties from content sales. We consider a game-theoretic model in which two platforms offer different standalone utilities to users. We find that incentives to establish one-way compatibility—the platform owner with smaller standalone value grants access to its proprietary content application to users of the competing platform—can arise from the difference in their profit foci. As the difference in the standalone utilities increases, royalties from content sales become less important to the platform owner with greater standalone value, but more important to the other platform owner. One-way compatibility can thus increase asymmetry between the platform owners’ profit foci and, given a sufficiently large difference in the standalone utilities, yields greater profits for both platform owners. We further show that social welfare is greater under one-way compatibility than under incompatibility. We also investigate how factors such as exclusive content and hardware-only adopters affect compatibility incentives. This paper was accepted by Chris Forman, information systems.

Optimal Strategies in Best-Choice Game with Incomplete Information — The Voice Show

2016 ◽  
Vol 18 (02) ◽  
pp. 1640001 ◽  
Author(s):  
Vladimir V. Mazalov ◽  
Anna A. Ivashko ◽  
Elena N. Konovalchikova
Keyword(s):  
Incomplete Information ◽  
Optimal Strategies ◽  
The Other ◽  
Theoretic Model ◽  
Object Based ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Voice

This paper studies a game-theoretic model of best choice with incomplete information. In this model, players observe a sequence of incoming objects each described by two random quality components. The first component is announced to players and the other one is hidden. Players choose an object based on known information about it. The winner is the player having a higher sum of the quality components than the opponents do. The optimal strategies of the players and their payoffs in the game are derived.

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