An Economic Model of Open Source Software Adoption

This paper examines the competitive strengths of open source versus commercial software from an economic perspective. It uses a simple model of rational software selection to derive the competitive strengths of open source and commercial software models, how they can balance each other, and what the threshold or tipping point for mass adoption of open source software would be. It shows that open source software has the advantage when their commercial competitors have excessively high profit margins or when the software product???s features are not scalable due to heterogeneous user requirements.