Firms' contribution to open source software and the dominant skilled user

Free/libre or open-source software (FLOSS) is nowadays produced not only by individual benevolent developers but, in a growing proportion, by firms that hire programmers for their own objectives of development in open source or for contributing to open-source projects in the context of dedicated communities. A recent literature has focused on the question of the business models explaining how and why firms may draw benefits from such involvement and their connected activities. They can be considered as the building blocks of a new modus operandi of an industry, built on an alternative approach to intellectual property management. Its prospects will depend on both the firms' willingness to rally and its ability to compete with the traditional “proprietary” approach. As a matter of fact, firms' involvement in FLOSS, while growing, remains very contrasting, depending on the nature of the products and the characteristics of the markets. The aim of this paper is to emphasize that, beside factors like the importance of software as a core competence of the firm, the role of users on the related markets - and more precisely their level of skills - may provide a major explanation of such diversity. We introduce the concept of the dominant skilled user and we set up a theoretical model to better understand how it may condition the nature and outcome of the competition between a FLOSS firm and a proprietary firm. We discuss these results in the light of empirical stylized facts drawn from the recent trends in the software industry