How Openness of Platform and Complementary Software Shapes Software Upgrade Strategy: Implications for the Competitive Dynamics in the Software Industry Open Access

Wang, Yi (2013)

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This paper examines the determinants of software upgrade pace. First, I examine whether the pace of software upgrade remains the same, increases, or decreases throughout the software life cycle. Second, I explore how the pace of software upgrade changes upon introductions of competing software and complementary platforms. Finally, I investigate how openness at both the software level and platform level moderate these relationships.
Results from a random sample of 300 software products reveal some interesting results. First, software upgrade pace decreases over the life cycle of software. Second, software with a higher level of openness tends to have faster upgrade pace. Third, the results yield an inverted-U-shaped relationship between platform openness and software upgrade pace. Finally, in contrast to the widely adopted concept that OSS developers are non-strategic, they indeed react to the strategic actions of their commercial counterparts and increase their level of investment in OSS developments when facing new releases from their commercial competitors.

Table of Contents

Table of Contents
1. Introduction 1
2. Literature Review 9
3. Theory Development 21
3.1 Concept Definition: Software Upgrade vs. Software Update 21
3.2 Platform Openness: Opening Complementary Software Market 22
3.3 Licenses of Complementary Software 24
3.4 Age 26
4. Data and Sample 27
4.1 The Context of Operating Systems and Complementary Software 27
4.2 Sample 29
4.3 Challenges with the Data 31
4.4 Variable Definition and Operationalization 34
5. Econometric Approach 36
5.1 Model Specification 37
5.2 Results 37
Table 1: Examples of Platform - Software Paradigm 39
Table 2: Heterogeneity in Software Openness 40
Figure 1: Research Model 41
Figure 2: Heterogeneity in Platform Openness (adapted from Boudreau 2010) 42
Figure 3: Data Structure 43
Table 3: Examples of Software Category Matching Scheme 44
Table 4: Descriptive Statistics 45
Table 5: Examples of Software Version Numbering Strategies 47
Table 6: An Example of Software Version Numbering Coding Scheme 47
Table 7: Software Release Cycle 48
Table 8: Examples of Software Version Numbering Coding Guideline 49
Table 9: Examples of OSS Licenses Coding Scheme (Adapted from Lerner and Tirole 2005) 50
Figure 4: Examples of OS Upgrade History 51
Table 10: Results of Conditional Model of Recurrent Events 52
References 53

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