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PhD thesis by Thomas Rosenfall Linköping Studies in Science and Technology Dissertations, No. 1438

Open Source Vendors’ Business Models,

It may seem controversial that open-source software (OSS), i.e. software created by voluntary contributions that is available to use, change, and distribute for free, can be utilized for business purposes. Yet, for some firms, commercial OSS software products are the primary source of revenue. In this thesis, these companies are referred to as OSS vendors.

Although some OSS vendors have existed for more than thirty years, how they conduct their business has not been extensively studied. Business models as a concept has been widely used in the information and communications technology (ICT) industry, often when describing firms working with OSS. In that context business models often refer to the offering, i.e. the products the firm offers to its customers and how revenues are collected. However, in academia the business model concept has evolved in a broader sense encompassing several fields and into a rich theoretical field itself.

This thesis aims to further the understanding on how OSS vendors conduct their business, by using a business model framework, which has been constructed from business model and management theories. This framework was used to study OSS vendors to investigate the configurations of their business models. A cross-case analysis of four carefully selected OSS vendors searched for generic patterns in these configurations. Furthermore, the cases were also studied regarding sustainability and profitability. Two generic business model configurations were found, community immersion and community utilization.

OSS vendors found configured according to the community immersion business model are deeply involved with, but also dependent on, the main community project that provides the software for the offering. OSS vendors found configured according to the community utilization business model are not dependent on the OSS project to provide their commercial offerings. Rather, the communities are used in marketing providing brand benefits, a base for recruitment, and in lesser degree functioned as quality assurance.

Two of the four studied companies were found to be profitable and sustainable; one operating according to the community immersion business model and the other according to the community utilization business model. The other two companies studied, observed to operate according to the community utilization business model, and did not achieve profitability during the time of the study. The findings should further the understanding of how profitable OSS vendors’ business models could be configured, and thus provide practitioners with an understanding on how different business model configurations can affect their strategies and overall business.

Read the whole thesis here: http://www.avhandlingar.se/avhandling/472c5f6b9c/