FLOSS in an industrial economics perspective

The spread of free/libre open source software (FLOSS) represents one of the most important developments in the Information Technology (IT) industry in recent years. Within the context of a knowledge-based economy, this sort of approach appears exemplary for a growing number of industrial activities in which the amount of knowledge that has to be mastered is too large for a single agent, however powerful. Considering knowledge as a mutual resource requires a rethinking of the value chain concept, since cash flow is derived from use of the knowledge base (services, complementary products), not from the knowledge itself. In a classical industrial economics perspective, this reshaping of the value chain must be analyzed not only at the global ecosystem level (who produces what, between firms and universities, users and producers, etc.), but also at the industry level (once the industry’s role has been identified, how does it organize itself?). Various points of view have been proposed, but researchers have generally studied either the involvement of firms in a community or the integration of FLOSS into their market strategy, but not both. In this article, we argue for a more structured and global analysis, based on the tools of industrial economics, and thus starting from the basic conditions of the computer market and of the buyers’ competence in software development (the “dominant user’s skill”). This conceptual framework helps to distinguish the different types of corporate behavior we see in the FLOSS ecosystem and more specifically their varying degrees of involvement. 'Free'/'libre' or 'open source' software, industrial economics, dominant user's skill, specificity of the assets.