Open Source and Commercial Software Platforms: is Coexistence a temporary or sustainable Outcome?

In this paper, we consider the dynamics and competition between two software platforms. One is Open Source and is produced by an OS community and the other is based on proprietary software produced by a monopoly. Potential users can adopt one of the two platforms in order to fill specific needs (develop and sell new applications based on the platform). For that, they use the services of specialized firms that are in charge of developing the application on one platform. In this context, we first ask whether the coexistence of these two development models can yield to a stable outcome i.e. an outcome in which the market share of the two platform tends to be constant over time. To do so, we consider the static issue first and then use a simple dynamic system. The dynamics comes from the development efforts of the proprietary or of the OS platform that are spillovers and are capitalized in a knowledge base period after period. In most cases, the coexistence is not stable and ends up with an unique platform. From this baseline, we then consider different strategies for the editor. A first strategy is for the editor to "show the code" of its software. Reuse is here forbidden, yet this first degree of "openness" enable developing more compatible products. A second strategy is to allow for change strategically the compatibility degree between the proprietary and OS platform. In both cases, we study consider this issue in a dynamic framework and study whether a mixed industry may be sustainable in the long run.