Adaptive entry strategies under dominant standards: Hybrid business models in the Open Source software industry

Although a growing body of literature is analysing Open Source software (OSS) issues, there is still lack of empirical data on the phenomenon and little is known about firms that enter the software industry by producing under the Open Source license scheme (Open Source firms). This paper is a contribution to fill this gap and focuses on the business models of these firms. We find significant heterogeneity among them, in particular many agents supply both proprietary and Open Source software. We present a model of adoption that studies the intra-firm diffusion of the new paradigm. Explanatory hypotheses are discussed analysing how the characteristics of the Open Source production mode and of network externalities in software demand shape the strategies of firms that entered the OSS field.