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The Economic Dynamics Of Software: Three Competing Business Models Exemplified Through Microsoft, Netscape And Linux

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  • Maureen Mckelvey

Abstract

This article proposes three ideal business models to analyze innovation in knowledge-intensive goods and services. The three models are 1) Firm-based control. 2) Hybrid, and 3) Network-based. Each is defined in relation to the two sides of innovation, e.g. creation of novelty and of economic value. Defining the models this way leads to a discussion of the advantages and disadvantages of each model for organizing the development of different types of software and for appropriating economic benefits. Each business model is .also exemplified through the economic history of one example. The examples are, respectively. Microsoft, Netscape and Linux. The concluding section relates software development to the broader forms of economic dynamics in knowledge-intensive sectors.

Suggested Citation

  • Maureen Mckelvey, 2001. "The Economic Dynamics Of Software: Three Competing Business Models Exemplified Through Microsoft, Netscape And Linux," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 10(2-3), pages 199-236.
    • Handle: RePEc:taf:ecinnt:v:10:y:2001:i:2-3:p:199-236
    DOI: 10.1080/10438590100000009
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    Citations

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    Cited by:

    1. Elsner, Wolfram & Hocker, Gero & Schwardt, Henning, 2009. "Simplistic vs. Complex Organization: Markets, Hierarchies, and Networks in an 'Organizational Triangle'," MPRA Paper 14315, University Library of Munich, Germany.
    2. Harison, Elad & Koski, Heli, 2010. "Applying open innovation in business strategies: Evidence from Finnish software firms," Research Policy, Elsevier, vol. 39(3), pages 351-359, April.
    3. repec:dau:papers:123456789/12317 is not listed on IDEAS
    4. Harison, Elad & Koski, Heli, 2006. "Innovative Software Business Strategies: Evidence from Finnish Firms," Discussion Papers 1042, The Research Institute of the Finnish Economy.
    5. Dahlander, Linus & Magnusson, Mats G., 2005. "Relationships between open source software companies and communities: Observations from Nordic firms," Research Policy, Elsevier, vol. 34(4), pages 481-493, May.

    More about this item

    Keywords

    Innovation; Evolutionary Economics; Micmsoft; Netscape; Linux; Software; IEL CIassification L86; 031; 032; 033;
    All these keywords.

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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