The document discusses open source business models from an industry perspective. It outlines the evolution of business models and the common economic motivations for using open source software, which include cost savings, increased revenue streams, and market growth. The document also examines how open source can extend the lifecycle of information systems by allowing for code adaptation and integration of new modules over time. Both microeconomic and macroeconomic reasons for using open source are provided, such as cost savings, competitive advantages, improved trade balances, and increased economic growth and employment.

1. Open Source Business
Models Industry
Perspective
Manuela Aparicio, ISCTE-IUL
&
Carlos J. Costa, ISCTE-IUL

2. Index
1. BM- Evolution
2. BM- Motivations
3. Information Systems Lifecycle
4. Economic Reasons to Use FOSS
Manuela Aparicio & Carlos Costa 2

3. Business Models Evolution
“By establishing a successful open source
platform, software firms can compete more
effectively across technology stacks and
thereby increase their addressable
market.”
(Riehle, 2010)
Manuela Aparicio & Carlos Costa 3

4. Motivations of FOSS
The most common economic motivation is to
●
save costs in the software development
●
sharing costs
●
Increased revenue through the provision
●
Increased sale of complementary products
●
Increase market
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5. OS Foudations Purposes
●
Ensure FOSS long-term survival
●
Increasing the Systems Lifecycle
(Alter, 2001)
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6. Extending Information Systems
Lifecycle (1/3) (Costa & Aparicio, 2005)
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7. Extending Information Systems
Lifecycle (2/3)
Four strategies:
●
●
- Perpetuate system;
●
- Manage transition
●
- Prepare heir
●
- Manage strategically
(Costa & Aparicio, 2005)
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8. Extending Information Systems
Lifecycle (3/3) (Costa & Aparicio, 2005)
●The transition process may consist in a
parallel process.
●This process allows the old system
usage simultaneously, while a new
system is launched.
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9. Extending Information Systems
Lifecycle (3/3) (Costa & Aparicio, 2005)
This perspective is different from managing
a portfolio of applications, it consists on
prevalence of families (or “dynasties”) of
information systems
A firm may implement one of several of
those strategies.
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10. Lifecycle Extended by FOSS
●
Open code allows code adaptations
●
Open code allows to integrate new SW
modules
(Kavanagh, 2004)
FOSS endures the maintenance phase of the
●
system lifecycle
(Costa, 2009)
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11. MicroEconomic Reasons to Use FOSS
●
Cost Savings
●
Sharing development expenses
●
No licenses to pay
●
Profits per sale in the market
●
Competitive economic advantage
●
Pricing flexibility for vendors
●
Increase sales (price-sensitive customers)
Increase of total market size
●
●
Vendors can also benefit from the customers
non-expense in closed source, because their
budget increase (Riechle, 2010)
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12. Price-Sensitive Customers Effects
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13. Increases Total Market
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14. MacroEconomic Reasons to Use FOSS
●
Improve the External Payments Balance
●
Decreases software imports
●
Might increase exported services
●
Decreases Royalties and import licensing
●
Improve the economical growth
●
Increases internal production
●
Increases employment in services
●
Increases the taxes revenues
●
Motivates Development
●
Competitiveness (SW) (Costa, 2009) &
(Aparicio & Costa, 2012)
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15. Ref. Bibliograficas
Costa, C. & Aparicio, M. (2005) “Managing the Information System
Life Cycle in Construction and Manufacturing”, in World Academy
of Science Engineering and Technology Journal 2005
Costa, C. (2009) [Open Source e Modelos de Negócio],
presentation on Business Technology World, 2009,
http://www.slideshare.net/carlosjcosta/open-source-e-modelos-de-
Carlos Costa, Professor and Reseacher at Iscte - Iul | SlideShare
N.d. http://www.slideshare.net/carlosjcosta, accessed November
29, 2012.
Aparicio, Manuela, and Carlos J. Costa (2012) Macroeconomics
Leverage Trough Open Source. In Proceedings of the Workshop
on Open Source and Design of Communication Pp. 19–24.
OSDOC ’12. New York, NY, USA: ACM.
http://doi.acm.org/10.1145/2316936.2316941
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