Luisanna Cocco, Giulio Concas, and Michele Marchesi
Free/libre open source software, software business, software marketsimulation, market strategy
In recent years, the power balance between software firms and enterprise customers has been heavily changing. The contractual power of customers is increasing and the firms must take this fact into account. Stated the common need to save money, the opportunities to adopt new software solutions with tight budgets, or with substantial savings, are limited. The better way to obtain operational savings seems to be shifting to the use of open source software, obtaining in this way all the benefits of this software typology: lower costs, greater adherence to open standards, a broader vendor choice and service suppliers, no vendor lock-in and flexible, incremental architectures. In this work, a business model is proposed to analyse the competition among on-demand customer relationship management (CRM) firms, in particular among firms offering CRM products with or without source code availability. The model can also be customized to study other kinds of markets, and other assumptions can be made for studying their implications to the software business.
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