Value Capture in Open Source Projects

Open Source projects are collaborative processes that generate value for users but generally disallow actors to generate revenue directly from the product that is developed. Nonetheless, many companies are involved in Open Source projects. Therefore it is of interest to study what kind of mechanisms are involved in how companies capture value from Open Source project involvement, and also what kind of negative effects are incurred. The purpose of this study is to answer the following research questions: How do companies involved in Open Source projects capture value from their involvement? What kind, and magnitude, of risk does the companies' Open Source involvements entail? Due to the exploratory and explanatory nature of the research questions, a case study approach was chosen. Four case studies were conducted and the studied objects consisted each of one Open Source project and one company that was participating in that same project. Two to three interviews were performed per case study. Questions and subsequent analysis were based on the structure of the Business Model Ontology. The findings of the study were used to construct a proposition in management literature: the Management Open Source Checklist. In the studied cases it was found that the companies involved in Open Source projects captured value from complementary offers. These complementary offers included hardware, software and service offerings. The studied companies also gained other benefits that influence revenue streams and cost structure. The extra benefits found in all cases were viral marketing, closer customer relationship and access to external competence. In two of the cases benefits in forming partnership were also found, and in one case there were benefits in the recruitment processes. In two cases benefits to the company brand were found. In conclusion, the studied companies all capture value primary from complementary offers, but also capture secondary value in form of benefits in other parts of the business model. Risks with Open Source participation were found in all cases but one. These were: risk of exposing security flaws, risk of being copied by competitors, risk that the Open Source project develops in an unfavorable direction. In all cases the risk were found to be of a lesser magnitude. The Management Open Source Checklist proposes to be a tool for managers to evaluate Open Source participation from a business perspective. It is based on the findings of this study as well as previous literature but the tool itself has not been validated