Open Source Licensing in Mixed Markets, or Why Open Source Software Does Not Succeed

Alexia Gaudeul, School of Economics and ESRC Centre for Competition Policy, University of East Anglia, Norwich.

2/20/2008
(Original Publish Date: 2/8/2008)

The rivalry between developers of open source and proprietary software encourages open source developers to court users and respond to their needs. The open source developer who wants to promote her code (intrinsic motivations) may choose liberal license terms such as those of the Berkeley Software Distribution as they allow the proprietary developer to use her code in his product and thus broaden its appeal. If she wants to promote her own implementation of her software (extrinsic motivations), she may use more restrictive license terms such as the General Public License to discourage proprietary exploitation of her code. An open source developer who is a latecomer to the market will be less likely than an early entrant to make her product compatible with that of the proprietary developer, but she is also more likely to orient her software towards the end user.