Sunday, October 5, 2008

Competing with Open Source: Strategies by Harvard and Stanford

You know that open source has arrived as a business strategy when Harvard and Stanford professors write papers about how to compete with the open source model (although the article covers all free goods).

In their words:

It’s not easy, and it’s more than just a theoretical question. U.S. newspapers are finding it difficult to compete with free news and the commentary of bloggers and other internet sources. And in the software world, the rise of open source products, which are available for free on the internet, is reshaping the technology industry.

“Divide and Conquer: Competing with Free Technology Under Network Effects,” Deishin Lee and Haim Mendelson, Production and Operations Management, January-February, 2008

They mention three strategies for commercial companies to compete with "free" products:

1. Timing

2. Product features

3. Network effects across other markets.

Thanks to Matt Asay on finding this article and his insightful commentary.