Diffusion Dynamics of Open-Source Software in the Presence of Upgrades: An Agent-Based Computational Economics (ACE) Approach

Researchers have identified numerous factors that impact the diffusion of open source software (OSS). This paper proposes an integrated model that studies how key factors affect the diffusion dynamics of OSS. Specifically, we investigate the role of software upgrade cycle in the diffusion of OSS. We also incorporate factors such as variability in OSS support costs, interoperability issues and network structure that have not been systematically studied in prior OSS research. Our results demonstrate interesting effects of these factors on diffusion dynamics of OSS. Variability of OSS support costs, length of upgrade cycle and interoperability costs are identified as major determinants of OSS diffusion. The results illustrate that a proprietary software (PS) vendor should consider several other strategic variables besides price such as interoperability costs and upgrade cycle that affect OSS diffusion. The proposed model can be used as a building block to model competitive dynamics in software markets.

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