Value Creation and Capture with Open Source Software: A Theoretical Model for Understanding the Role of Value Networks

Open Source Software (OSS) is seen as an excellent exemplar of both peer production and open innovation. Nonetheless, the very concept of OSS represents phenomena that require firms to rethink their strategy as the shift in focus from ownership to one of openness requires a reconsideration of the processes that generate value creation and capture. Existing research suggests that engaging with external parties in networks or ecosystems represent growing sources of value creation and capture. The activities conducted in these networks are usually supported by traditional inter-organisational structures like hierarchies, markets and brokerages. However, the emergence of OSS as a form of peer-produced open innovation poses a puzzle for conceptions of organisational theory due to its non-reliance on markets or traditional managerial hierarchies to organise production. Additionally, the state of existing theory that focuses on the role of networks in facilitating value creation and capture process with OSS is non-existent. In responding to this gap, the paper begins a theory building process by drawing on extant research and a single case study for examining OSS value creation and capture. Based on our analysis, we theorise that an open innovation value network is extremely important for effective value creation and capture with OSS and formulate six propositions for future testing